Everything is an Ad Business

Apple, Uber, and Amazon, what do they have in common?

It's not the taxis, or the iPhones or a cloud infrastructure business, but an ad business!

Apple, the anti-ads guys (Apple can be attributed for some of the troubles FB has had recently) selling ads, yes you heard me right. More precisely, 4 billion worth of ads in 2021.

Amazon Ads Business is a?$40bn?business, Apple is steadily growing, and UBER had more than 315,000 businesses running ads with Uber in theQ4, nearly double the company’s 170,000-plus advertisers a year earlier. It's targeting 1 billion in annual ad revenue by 2024.?

Just like retailers have found opening marketplaces as an opportunity to expand their inventory offers, and make incremental revenues on the side by taking commissions, offering shipment and store service and more, by launching their own ads businesses, companies like Apple and Uber are able to tap into the existing user base and generate additional revenue.

This is particularly important for companies like Uber, which have faced significant losses in recent years.

Secondly, launching an ads business allows companies to leverage and offer the 1st party data, build data-rich walled gardens and help brands engage with consumers with high purchase intent.

With the ongoing issues we are facing with Google's eventual cookie kill and tracking policies and bigger challenges and laws governing consumer privacy, brands are looking for platforms for measured and targeted push. In times like these, services and platforms like these are seeing benefits.

For example, Uber has access to data on millions of users and their travel patterns. By leveraging this data, Uber can provide advertisers with targeted ads based on a user's location and travel history. Similarly, Apple has access to data on millions of iPhone users, which it can use to provide advertisers with targeted ads based on a user's interests and preferences.

Whereas, Uber Eats recently announced its ads offering for CPG products after initially inviting Pepsico to run a pilot on the platform. According to Uber, the new offering is aimed at "increasing discoverability of relevant products and brands, while driving value for both Uber Eats and its brand partners.”

Finally, launching an ads business allows companies to create a new revenue stream without directly competing with their existing products and services. Ads businesses are complementary to "primary services" and provide incremental revenue and in difficult times, lessen the pressure on "primary services" if sales goals are not being hit.

Walmart is a great example where now, ads business and 3P marketplaces are going to provide incremental revenue to primary business over the next few years.

Also, existing technology and infrastructure help. Companies like trade desk, Sizmek, Criteo and more are making it possible for companies to offer their platform and their technologies at scale before they decide to build one in-house.

To Sum it up, digital ads are about the eyeball, digital foot traffic and real estate, which these companies have all 3 in abundance. Over the next few years, we are definitely going to see steady growth of businesses implementing retail media networks, marketplace and ad offerings as a suitable incremental revenue exercise.