28th February 2020

POV: Uber and Lyft OOH Advertising

Background:

Uber has announced a partnership with Adomni, a programmatic out-of-home advertising platform to trial top of car ads on Uber driver’s vehicles. A few days before this announcement, Lyft announced that it had bought Halo Cars, a start-up that allows drivers to generate money through digital advertising on top of their cars.

Details and Implications:

In the US, this form of OOH advertising is a space occupied by a few start-ups, the largest of which is Firefly. Using Firefly, Uber drivers can currently earn up to $300 a month but only if they drive more than 40 hours a week.

The ‘Uber OOH’ ad platform will offer drivers $300 to install the vehicle-topper and an additional $100 each week that they drive more than 20 hours during the trial. After the trial, if it is successful, drivers will be paid on an hourly basis for the advertising. The program will start in a selection of US cities, including Atlanta, Dallas and Phoenix with the view to expand globally. The idea is to provide advertisers with self-service programmatic media-buying options through Adomni’s demand-side platform (DSP). During the trial, ad inventory will be available for purchase on Uber and Admoni’s websites.

A few days before Uber’s announcement, Lyft acquired the start-up Halo Cars for an undisclosed amount. Halo Cars was founded in 2018 and operates in New York and Chicago. It installs LED screens on the top of taxis to serve geo-targeted full-motion video ads. Lyft drivers who install the screens can earn an extra $400 a month. Halo Cars claim to have blanket ad coverage of New York and can emulate the same thing in any city. Its website also states that its targeting algorithm: ‘takes into account the vehicle’s exact location, time of day/week, weather and consumer data from the world's top data providers to ensure that your ads are only shown in areas and during times that make sense for your business’.

This advertising format is not new but there are a combined 4.4m Lyft (1.4m) and Uber (3m) drivers in the US with cars that have space for this advertising and the opportunities for targeting and personalisation could be very effective for advertisers. The digital and video elements of these screens provide ample opportunity for creativity and the use of Adomni technology by Uber could also see these car ads synced with billboards.

Whilst spend on OOH advertising is only around a tenth of online spend, outdoor advertising is growing faster than the rest of the industry aside from pure play digital media. The outdoor sector generated $39 billion in global ad revenue in 2019 and GroupM estimates this to increase 2.5% in 2020 and 3-4% growth rates in subsequent years. This is largely due to the increasing digital capacities of OOH spaces and the technology available for personalisation and targeting. Additionally, the cost of the technology has reduced significantly over the last few years.

Summary:

These two announcements from Lyft and Uber in the US demonstrate both the growing diversity of OOH advertising space and also the areas in which these transport companies are diversifying their revenues. With both companies needing to increase revenue over the coming year due to big losses in 2019 Q4 there may be some big opportunities for advertisers everywhere to get creative in this new space.

Further Reading:

Adweek | CNBC | Wired | MediaPost | The Drum | GroupM TYNY

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