Oct 19, 2022 - Economy

Everyone wants to sell your attention

Illustration of the eyes emoji with pennies instead of pupils.

Illustration: Brendan Lynch/Axios

Any moment a consumer looks at a screen is now a moment that can be filled with advertising.

Why it matters: Smartphones, e-commerce platforms and connected devices, including smart TVs in hotel rooms and tablets in cars and at airports, have all made it possible for any business — from networking apps to grocers and ride-hailing companies — to target customers with digital ad messages.

  • U.S. ad revenues this year are expected to surpass $300 billion, a record, thanks in part to a slew of new companies jumping into the ad business.

Driving the news: Uber on Wednesday said it plans to start putting ads in its ride-hailing app — a huge step for the company that to date has been largely limited to serving ads to its Uber Eats delivery app.

  • The average Uber ride lasts around 20 minutes, and executives told Axios that they see ample opportunities to sell ads that users will see as they consult the Uber app on their rides.
  • Uber Eats ads are already a massive business, bringing in $350 million in annualized  revenue from 170,000 advertisers in 30 countries globally, executives said.
  • The move will help expand Uber's ad business beyond sponsored listings on Uber Eats to serving ads for a much wider range of companies, across a broader range of channels — including email and on car top screens.

The big picture: Uber's expansion comes on the heels of the recently-announced merger between Kroger and Albertsons, which could create one of the biggest digital marketing businesses.

  • Dollar General, Ulta Beauty, Petco and Dick's this past year have joined Walmart, Target, Macy's, Home Depot, CVS, Michael's, Nordstrom, Wayfair and Amazon in launching ad-sales businesses to diversify their revenue streams, taking advantage of foot traffic in stores and visits to their e-commerce sites.

Be smart: In-store advertising has long been a part of the experience at grocery stores and big box retailers, but significant investments in digital transactions and customer support during the pandemic have better positioned these companies to create their own ad networks.

  • Those networks are becoming a competitive advantage at a time when Amazon is said to control 78% of retail media ad spend, eMarketer estimates.

Between the lines: Getting good at remembering what people like (via data tracking) and selling them things more precisely helps not only the purchaser of the ad but also the company serving the ads.

  • This precision leads to more effective use of marketing dollars, though it can also raise privacy concerns.
  • By building their own networks, companies can rely less on third party data — and that's become more of a necessity in the wake of privacy measures implemented most prominently by Apple.

What to watch: Following the footsteps of Google and Facebook, most of these companies are beginning to build self-serve ad platforms that make it easy for ad buyers to purchase ads directly.

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