Uber's big moves; Are marketers missing a trick with brand-to-brand partnerships?; and James Warburton exits Seven
Welcome to the latest edition of the REmade newsletter, sister publication to our REmade conference, where the retail media community comes together.
Today, fresh from a New York research trip, our columnist Colin Lewis offers a deep dive into the Uber Advertising business model, and Booktopia’s Adam Freedman talks about the philosophy of brand-to-brand collaboration driving his retail media strategy.
And further down in our daily Unmade Index update, Seven West Media shares jump on news of James Warburton’s immediate departure.
It’s never to early to hold the date, so please save Tuesday October 1 in your calendar now for the third edition of REmade - Retail Media Unmade.
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Member-only pricing for our HumAIn (May 28) and REmade (October 1) conferences;
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Your own copy of Media Unmade
Q&A: ‘The beauty of brand-to-brand partnerships’ with Booktopia’s Adam Freedman
In each REmade newsletter, we feature a Q&A with a members of the retail media community. Our guest today is Adam Freedman, head of brand and communication for Booktopia.
Q: What has changed for you in retail media over the past year or so?
At Booktopia, we're in a novel position where we look at first party data, and it is so, so powerful, but when it comes to books, there are books about everything.
So if you're going to have a baby, we're probably the one of the first people that will know that you're having a child, because you would have likely bought a book on what to expect.
That’s a compelling opportunity to unlock relevant opportunities with customers and brands alike.
Very few brands have seen the beauty of doing brand-to-brand partnerships; retail media is an evolution of that.
Really leveraging your real estate for more commercial opportunities beyond the top of funnel becomes essentially a through-the-line opportunity. That's something that I discovered gathering insights from more and more partners
Where does the opportunity exist for marrying up marketing opportunities with more commercial opportunities so that you find more wins for multiple parties, with the customer at the center of that?
Q: What's the next focus for you?
Our wonderful merchandise team have been doing endemic media, working with our publisher partners to offer placements across some of our channels including website, e-mail and catalogue for a while now, enabling them to promote key titles to our audience.
From this foundation, we recognised the opportunity to build and formalise a retail media network where brand-to-brand partnerships (non-endemic) would also evolve, providing a platform to enable partners to harness the dynamism of the books category and first-party data with a through-the-funnel solution.
The endemic and non-endemic activity now work side by side and is all centred around the philosophy of ensuring we add value to our customers.
How are you thinking about data?
I think our customer data is is pretty strong. Buying behaviour is such a compelling piece of data.
Now, it's about building that retail media network to look at the inventory that we have.
It's interesting as a pure play. People ask whether we can do that, can you do retail media as a pure play? That's a question that often comes up. And the answer is, yes, you absolutely can.
And it's not just about the website, either. What we don't want to be doing is plastering your site. The whole focus for us is around what is our customer value exchange? How do we make sure that we are very much focused on the customer so it's not about blanket advertising.
It's about making sure that we are aligning to relevant touch points that you know, anywhere in the customer journey that we are there.
Naturally the brand-to-brand partnerships unlock some great marketing opportunities for us, particularly in terms of top of funnel.
The opportunity for us now is building that retail media network and looking at all those pieces of inventory to add up. That's looking at on site, off site and offline as the three pillars.
That’s anything from looking at how we do email segmentation, to post purchase areas of the site, to inserts in our customer packages. There's lots of different opportunities as well as retargeting and other off site elements.
Q: Are you using a data cleanroom solution and how are you handling those kind of third party relationships?
A: We have a media agency in Hatched that support us. It's a bit of a manual affair right now, but that's not a bad thing because we're then super close to the detail in terms of everything that's going on and knowing who's who we're talking to.
What we don't want to do is to become really transactional as we then just lose sight of what is important so there's no automated solution just yet.
Ultimately, how do we make sure that we can turn around a solution that is a win for the customer, aligns to our overarching marketing plan and expands beyond that?
Q: Do you have a framework of brands you want to work with - who's going to be suitable? How do you make those moves?
A: It's assessing as a team, first of all, kind of a category. So a great example: travel and books make sense, wine and books make sense.
Travel is an area that we want to do more in. We've done some work so far. And we want to expand that. If you're traveling you're likely reading, you're likely packing a book or multiple during a holiday or whether it's even a business trip as well.
We are Australia's largest supplier of textbooks at every level of learning from early education through to tertiary. So there's lots of opportunities within education organisations, as well.
Q How is the economic situation affecting customer behavior?
A: I was at an event last week with other retailers and everyone was saying, ‘we're down, we're down, we're down. A lot."‘
It's a challenging environment unless you're in travel and grocery. Everyone is facing challenges across the board. And I think everyone is waiting with bated breath for the projected declines in inflationary rates that will be favourable for everyone in terms of, unlocking greater spends in the lead up to Black Friday and Christmas.
Make no mistake, it is a challenging environment out there. All of us right now in the retail sphere are trying to weather that storm.
Q: What are you seeing of the impact of AI?
It still has its limits. It's still very much a functional piece of technology that can deliver more optimal performance.
The missing piece is around emotion. In terms of having intelligent retail media networks, it's not artificial. There's still the authenticity piece that I don't think AI can account for with relevance.
If AI takes the focus, retail media will not realise its potential as much as it could.
Q: What book, TV show or film has changed how you see the world recently?
A: The one I keep coming back to is Barbie. It was phenomenal. In many, many ways: the execution of it from the marketing team behind it, how it struggled its way through multiple businesses, and then how it's then permeated popular culture to this day.
That is a model now, that can be looked at, not just from a film perspective, but for all brands. How do we actually evoke the emotion of a customer, how do we really think about that cultural community. How do we make sure that we are storytellers when it comes to our marketing machine as well?
First party data in action - Uber Advertising is on the march
In his regular column for REmade, global retail media consultant Colin Lewis has been spending time in New York, where he was briefed on the rapid progress Uber Advertising has been making on expanding its retail media platform
Last year Uber celebrated its first profitable quarter, a significant achievement considering its previous profitability challenges.
One number stood out in their earnings: the Uber ads’ annual revenue run rate of more than $900 million.
Even though the advertising business has only been around since 2022, given advertising margins, it is a significant driver of Uber profitability.
Uber CEO Dara Khosrowshahi told analysts in February that “Uber’s large premium and global user base is an important audience for advertisers. The power of our advertising platform stems from what Uber users tell us every time they use our apps, where they want to go and what they want to get.
“As a result, we’ve got the unique ability to bring together both location-based and shopping data with closed loop attribution across our Mobility and Delivery channels for both performance and brand campaigns.
Uber has the scale with its 137m monthly users. But what does Uber really have? Data.
Uber’s capability to monetise its data is the key to its future as it has robust data to target users based on a variety of factors - like loyalty to a restaurant, cuisine interest, past items purchased, locations visited, location trends, and more.
In their analysis briefings, Dr Mark Grether, global GM of Uber Advertising explained: “The consumer has the app open initially. So, it’s 100% share of voice in those two minutes, which is so much more than an advertiser sees on a social platform. Therefore, the engagement rates are super high, north of 3%. It’s powerful – especially based on the data that we have about the consumers and how we can combine Rider and Eats data to really make ads relevant.”
Then when a user is taking a cab, the opportunity increases. Grether explains: “An average ride is about 20 minutes, which means 20 minutes where a person is leaned back and really receptive to advertising. And that’s where a lot of clients, such as those in entertainment, fashion, travel and financial, are using the opportunity to engage our consumers”.
Let’s look at the level of Uber consumer data:
True identity: Consumer Identity verified from the unified login and authorisation,
Location: maps with routing/navigation, pickup/ dropoff points, ETA, trip lifecycle
Payments: Unified wallet, payment methods, risk analysis
Preferences and cross references: Uber Eats purchases and preferences, cross-referenced with other Uber products such as taxi usage.
As Khosrowshahi says: “Uber users tell us every time they use our apps, where they want to go and what they want to get. As a result, w’ve bring together location-based and shopping data with closed loop attribution.”
The advertising business fuels the core business of mobility and delivery business as it is a data-generating engine that does not undermine the core businesses.
Uber has a few different product offerings for all of the screen’s real estate. On the Uber Eats app:
Sponsored Listings for restaurants appear in front of users when they’re deciding what to order, directly tying the ad to the successful outcome of Uber Eats transactions.
Storefront Ads and In-Menu Ads to promote specific items within a restaurant/business’ list of items, for FMCG advertisers, for example to promote Doritos on a Friday, or on the app for a potential Netflix Friday night binge!
Post-Checkout Ads have brand awareness ads, including video.
In the Uber taxi app, there are Journey Ads (video or image ads that appear when the consumer is waiting or during the trip). Again, these formats are primarily for brand awareness strategies.
You can argue that UberEats is a more straightforward pitch for FMCG advertisers: it’s a performance marketing channel - spend ad budget with Uber and measure the value of UberEats revenue generated.
Hence the attractiveness of Uber Advertising for certain FMCG advertisers – particularly for brands who are looking for new ‘category entry points’ – triggers or occasions when a shopper considers buying a product in your category.
You can immediately see how advertising Doritos, salsa and cheese would appeal to the couch-potato opening the Uber app at 7pm on a Friday night. They might not have got off the couch to buy these products, but now they can be put into a virtual basket with a few frictionless clicks on an Uber Ad.
Uber Advertising’s First Party Data in Action
In the previous edition of the UnMade Retail Media column, I talked about how Omnicom had stolen a march on the rest of the holding companies by buying Flywheel Digital from Ascential for north of $800m.
Omnicom again showed their smart by inking a deal with Uber Advertising in the US: Uber is giving Omnicom to agencies access to insights from its first-party data for planning and executing campaigns for clients.
Grether explained: “We have very strong first-party data that we can make available and that Omnicom can use for campaign planning purposes. Its audience segments will then be pushed back into Uber and we can activate the campaign across both the Eats and Rider apps.”
When you think about the power of Uber’s first party data and how it is reflective of an individual’s lifestyle, patterns of purchase for food and travel, you can see how this is different to the sort of first party data that a typical Australian grocery retailer might have.
Uber’s Khosrowshahi has been very specific to the market about this: “We’re just scratching the surface of what we believe will be a multi-billion-dollar opportunity.”
Uber Advertising is going to be a serious player looking for a slice of Australian advertiser budgets.
Grether is planning an international rollout of all of Uber’s advertising products. They are creating a global salesforce to “inject the demand and operationalise it” in key markets including Canada, Brazil, Mexico, the US, the UK, France, Taiwan, Japan – and, of course, Australia.
What is the potential? Back to Khosrowshahi: “We have historically talked about ad penetration as percentage of Delivery getting to about 2% as a target for us. We’re a little bit above 1% now. To increase that percentage, there are a couple of factors. One is to increase the number of monetizable impressions per user session.
“While we have to be careful about the ad load, there are lots of new ad formats, new placements, increased monetization of search. Second for us is increasing the adoption and budget of advertisers. The average return on ad sales on advertising is about eight times. So it makes a lot of sense for more restaurants or more grocers to use our ads product.”
Interestingly, Uber is specific in saying that – just like Amazon Advertising and many grocers retail media business, sponsored listings (also called sponsored search on other platforms) is the majority of the ads business.
What’s Next? Non-Endemic Advertising
Uber Advertising is quite specific in saying that “almost every major advertising category is interested in spending on its platform, from CPG and fashion to entertainment, travel and even auto brands”.
For example, film entertainment companies such as Paramount, Disney or Netflix are being pitched to watch longer trailers in cabs.
The challenge with the promise of the non-endemic opportunity for retail media networks is that th potential mismatch in association between the brand and the network. Will the RMN of the retailer and non-endemic advertiser match from a brand perception perspective?
Non-Endemic advertising is where Uber Advertising could really take on the Aussie RMNs. Their data and their closed loop measure mean that they can serve top-of-funnel branding goals and bottom-of-unnel performance metrics at the same time.
There is one more reason why this could be where Uber Advertising can steal a march: the exchange of value is a lot clearer between the consumer and the advertiser: “in exchange for your time in a certain context, we will show you relevant, interesting content that is targeted to your tastes and demographics” is what Uber can claim.
Uber is coming.
Unmade Index falls for eighth day
Tim Burrowes writes:
The Unmade Index almost broke its dismal run of daily declines yesterday, finishing nearly flat, but still recording another minor drop of 0.11%.
It means our index of listed media and marketing stocks has now fallen for eight straight days
Most Unmade Index stocks didn’t move at all yesterday, although the larger stocks of Domain (down 0.33%) and Ooh Media (down 0.3%) nudged down the board.
Meanwhile, the troubled Seven West Media saw the biggest jump, up by 5%, taking the company’s market capitalisation back above $300m. It came on the same day the the SWM board confirmed CEO James Warburton should leave immediately. As of this morning, former chief financial officer Jeff Howard is in charge.
Did we call it? What Unmade wrote about the timing of Warburton’s exit a fortnight ago:
Time to leave you to your Friday. I’ll be back tomorrow with Best of the Week.
Have a great day.
Toodlepip…
Tim Burrowes
Publisher - Unmade
tim@unmade.media