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Is there anywhere you won’t soon be assaulted by digital advertising?
Uber this week revealed that it is about to serve up “journey ads” when you hail a ride — commercial messages linked to your destination that appear on your phone, and maybe in future on a screen in the back of the car. About to take an international flight? A duty-free store can sponsor your entire trip to the airport.
Meanwhile, Netflix has just set early November for the launch of its new advertising tier, a reduced-price streaming service in 12 countries for people willing to sit through an average of five adverts an hour. True, this is an optional new service, so no one will be forced to watch advertising — but as the economic downturn bites, it might be the only realistic way for many people to keep streaming.
Uber and Netflix are far from the only ones to latch on to advertising as a new source of revenue. Delivery apps, ecommerce marketplaces, mass market retailers, gaming services: it seems nowhere these days is commercial-free.
There are obvious reasons for this stampede into the digital ads business. When audience attention shifts wholesale to new services and channels, advertising dollars inevitably follow. The rise of streaming represents a serious threat to the linear TV model that still accounts for almost all of the $170bn in global TV advertising each year.
High-margin advertising dollars, euros and pounds are also gravy for companies in industries where profit margins are thin or non-existent. For a lossmaking delivery app like DoorDash, which handled $13bn worth of orders in the latest quarter, channelling so much buying power creates an obvious opportunity. Apps like this are in a perfect position to step in front of retailers and restaurants to suggest things their users might want to buy.
Retail media networks are also starting to take off, as merchants like Walmart and Target collect valuable data about shoppers’ habits that advertisers can use to hone their…
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