Lyft Creates Media Division to Expand Advertising Services
formed Lyft Media, a new business unit consolidating and expanding the ridesharing company’s advertising offerings.
The news comes more than two years after Lyft acquired Halo Cars Inc., which makes monitors to show digital ads on cars, and as Lyft faces an increasingly crowded market for advertising in and around automotive services.
Lyft hopes new ad products can generate revenue and help it compete with rivals like Uber Technologies Inc.,
who entered the media business in 2019, when he started selling ads through his Uber Eats app. Uber then started running ads on its cars and in its main ride-sharing app.
Beyond rooftop ads, Lyft will now allow brands to deliver content to in-vehicle tablets that passengers can use to track their routes, tip and rate drivers, and control music in each car. Lyft has been piloting the service in Los Angeles for the past few months and plans to offer it on 25% of all rides by the end of the year in Los Angeles and three other cities, according to a spokeswoman.
The company also sells ads on digital billboards at docking stations for bike-sharing services it owns, including Citi Bike in New York and Bay Wheels in San Francisco, a spokeswoman said. .
Lyft also offers in-app sponsorships that include banner ads and brand icons. In an early example, Vita Coco Co.
launched a campaign called “The Hangover Shop” the day after Super Bowl LVI, replacing all images of cars in the Lyft app with coconuts, said Jane Prior, chief marketing officer of Vita Coco.
Lyft will work with third-party companies to help advertisers measure campaign performance using aggregated data, but will not collect personal data from riders, said Kenan Saleh, chief executive of Lyft Media and former chief executive of Halo. . Targeting of ads on apps, tablets and rooftops will be based on time and location of journeys, and passengers can turn off tablets at any time, although less than 1% have done so in studies of test, Mr. Saleh said.
A portion of revenue from screen and tablet ads will go to Lyft drivers, though the company declined to say how much.
“We hope to provide advertisers and drivers with a place to interact with our network, while providing independent opportunities for drivers to earn money,” said Saleh.
Lyft’s main rival has ambitious plans for its own advertising business. Mark Grether, Uber’s chief advertising officer, told attendees at the company’s final Investor Day in February that it could hit $1 billion in ad revenue by 2024, and chief executive Dara Khosrowshahi said. said in Uber’s latest earnings call that the company would continue to grow. its ad sales team.
Lyft declined to comment on expected ad revenue.
Other companies have also entered the ride-sharing advertising business in recent years. Last year, outdoor advertising company Firefly Systems Inc. acquired Curb Mobility LLC, a New York-based company whose app helps riders hail yellow cabs and Uber drivers; it also sells advertisements atop taxis and through the Taxi TV in-vehicle video service. The network includes more than 25,000 screens generating 174 million monthly ad impressions in the United States, said Jason Gross, vice president of mobile at Curb.
The telecommunications giant T-Mobile US Inc.
in January acquired Octopus Interactive Inc., which runs interactive video screens in Uber and Lyft vehicles to grow its advertising technology business. A T-Mobile spokeswoman said the service currently reaches 10 million passengers each month, though she declined to provide total advertising revenue. Lyft said this company is not related to Lyft Media.
Lyft recently tried to cut costs by laying off 2% of its staff and folding the part of its business that allowed users to rent cars on the app. Last week, the company reported higher-than-expected second-quarter revenue, which chairman John Zimmer attributed in part to cost-cutting measures.
Demand for ride-sharing services has remained strong despite the economic downturn, with inflation prompting more people to supplement their incomes by becoming drivers, Khosrowshahi said on Uber’s earnings call.
Write to Patrick Coffee at [email protected]
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