- Food delivery service Uber Eats is looking to sell advertising to restaurants and boost orders. Uber posted a job listing for a group product manager for ad sales and confirmed that it is "exploring relevant ads in Eats," TechCrunch reported.
- A job description posted on the Uber website says the product manager "will lead the team and efforts responsible for creating a new ads business that enables eaters to discover new foods and restaurants to grow their customer base." The company is seeking someone with at least seven years of experience in delivering innovative products, preferably in advertising or ad-tech. The job is based in Toronto.
- Uber Eats has experimented with native advertising, starting last year with a test in India that gave higher prominence to restaurants that bundled food and sold it at a discount for delivery. Uber Eats placed those listings in an app section called "Specials," TechCrunch reported last year.
By selling ad space in its app, Uber Eats would give restaurants a way to reach potential customers when they're most ready to order food for delivery. These high-intent audiences are particularly valuable to restaurants seeking to stand out as consumers demonstrate a growing preference for food delivery over dining out. The percentage of U.S. consumers who have ordered from a food delivery app grew to 25% this year from 19% in 2018, per researcher Second Measure.
It's critical for restaurants to reach these high-value mobile consumers as soon as they open a food-delivery app. About half (54%) of people who use delivery services start with a specific restaurant in mind when they open an app, leaving 46% who are looking for ideas, per a study by restaurant supplier US Foods. That means a significant number of consumers could be swayed and converted into paying customers with targeted advertising. The average person who orders food through an app has two food delivery apps on their phone and uses them about three times a month, per US Foods.
For Uber, ad sales could become a significant source of revenue as it faces competitive pressures and pushback from restaurants over delivery fees. The company is estimated to have 20% of the U.S. meal delivery market, per Second Measure, putting it behind DoorDash at 34% and Grubhub at 30%, while Postmates' share stands at 10%. It's imperative for food-delivery companies to establish early loyalty with consumers, as 80% of them never or rarely leave for another platform, per a study by McKinsey.
Uber Eats revenue surged 68% to $394 million in Q3 from a year earlier, outpacing the 21% growth for ride-hailing services. Uber Eats makes up 13% of the company's total revenue, and has plenty of room for growth. Parent company Uber reported a loss of $1.16 billion during the quarter, underscoring the need to generate additional revenue from ad sales.
"There is a $150 billion local advertising market for local restaurants and eateries to benefit from by reaching consumers within their neighborhoods to discover new cuisines and grow their customer base," Aman Sareen, CEO of ZypMedia, said in a statement to Mobile Marketer. "We see 'food and drink' as the fourth-largest advertising category." He said ad spending in that category has more than doubled since last year and now makes up 10% of total media spending among local advertisers.
"Uber's challenge will be building a local advertising sales team to call on those local restaurants — this is the advantage that existing local media companies such as Sinclair and Nexstar have," Sareen said, referring to two of the biggest owners of local TV stations in the U.S.