Local’s Next Battleground: In-Car Media

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I’ve always considered Uber to be a wild card in local advertising. It knows where you’re going and where you’ve been, which has bred speculation about delivering local ads. And your buying intent is arguably heightened when Ubering about town.

But I’ve been skeptical about Uber actually delivering ads. Just like Apple, the company is careful not to jeopardize a large primary revenue stream with a marginal one. Ads could diminish the rider experience at a time Uber is blitzing user growth.

But for a company with such hyper revenue growth — though still unprofitable — it will need to eventually build auxiliary revenue channels to maintain growth when its core business matures (again, like Apple). And it’s planting those seeds already.

A few recent moves have begun to triangulate how Uber could do this. It will be all about enhancing your ride, then down the road (excuse the pun), an ad model. And it won’t involve in-car signage or digital displays as some have speculated.

Instead it will be where our attention is already fixed during most Uber rides: down at the warm glow of our phones. And my prediction is that Uber will monopolize that time through premium content served through the app during rides.

The beginnings of this strategy can already be seen in its recent UI update. The under-recognized feature of that update is what I’m calling “ride mode.” It takes over the app while a trip is underway, including maps, ETA and other useful info.

Some of that already existed, but the new UI creates a more tangible portal that contains more options and in-ride utilities. The next step will be content deals that give riders free access to otherwise paid content for the duration of their ride.

Like it did with in-ride Snapchat custom filters, this will involve deals with Netflix and Spotify, highlighting content that fits your trip duration. Think: Southwest’s “bring your own device,” as opposed to NYC Taxi’s slimy and outdated touch screens.

And once this content-rich trojan horse is wheeled into our hearts, then Uber will bring in the ads. That could involve a combination of behaviorally and demographically-targeted branding, as well as ads that steer you towards nearby businesses.

In fact, it’s already shown signs of this: its new restaurant guide spotlights top destinations in Uber’s most active cities. This was not only an experimental move but a PR one: to get the world ready for data-fueled local suggestions.

As this gets more personalized, Uber’s targeting will be rather precise, given its capacity for behavioral profiles based on all the places you’ve gone. This will be enhanced by Uber’s recent move to track location more pervasively via forced opt-in.

In addition to that ballsy but ultimately smart move, Uber will get more data from a new feature that lets riders navigate to a person rather than place. That requires the second person to be tracked, enabling new dimensions of social-local data.

But people will still opt in because there’s a value exchange in the feature itself. This is what I call the “Pokemon Go effect“: If you want hordes of users to turn on location sharing, provide something organic and functional (or addictive) in return.

The same goes for the in-ride content offerings mentioned above. That concept will follow the evolutionary path of another key trend: the autonomous vehicle movement. And Uber is explicitly positioning itself for a driverless future.

A key part of that movement is innovating the in-car experience for when you’re no longer driving. The time this unlocks will grow the media consumption pie for the first time since the iPhone. That will mean a media and monetization land grab.

And that’s the evolutionary end-point for Uber’s in-ride app mode. Today the touch point for that content is a smartphone; tomorrow it will be a combination of projected media, virtual reality and augmented reality. Bring your own device indeed.

Michael BolandMichael Boland is chief analyst and VP of content at BIA/Kelsey. Previously, he was a tech journalist for Forbes, Red Herring, Business 2.0, and other outlets.

Mike Boland has been a tech & media analyst for the past two decades, specifically covering mobile, local, and emerging technologies. He has written for Street Fight since 2011. More can be seen at Localogy.com