📮 Uber’s ad-venture

Budweiser ad en route to the bar… Your next Uber ride might be #sponsored. Last week the ride-hailer announced plans to let marketers target riders based on their destination with “journey ads.” It’s showing ads in the app as part of its new media division, and is also piloting in-car tablets (think: Expedia commercial on the way to JFK). It’s been doing ads for years, though most have been sponsored listings on Uber Eats.

• 5-star potential: Uber said its expanded ad biz could hit $1B in revenue by 2024, since ride-hail could pull in way more ad $$ than food delivery. Uber says riders will be able to click to buy a product without leaving the app.
• “Cars will become our next living rooms” — Uber’s GM of advertising might’ve missed the WFH memo, but he could be right about growth potential. He said Uber’s ad revenue jumped to $141M last year from $11M in 2020.
• Faster ETA: In August Lyft launched its advertising unit, Lyft Media, adding tablets that riders can interact with to some cars.

If there’s an eye, there’s an ad… the capitalist take on “if there’s a will, there’s a way.” When it comes to digital marketing dollars, the focus has always been on ad-reliant tech titans like Meta, Google, Twitter, and Snap. Now we’re seeing retailers building major ad businesses:

• All in the grocery cart: Kroger was one of the first retailers to expand its ad biz beyond its own properties, letting brands use its shoppers’ data to target them on third-party sites.
• Data in the digital cart: Amazon raked in $31B in ad revenue last year, giving it a bigger ad biz than Snap and Microsoft. It controls 78% of US retail media ad spend.
• US ad revenue is expected to surpass a record $300B this year, partly thanks to unexpected players jumping in, from Dollar General and Dick's to Petco and Ulta Beauty.

Try putting it in rice… Shares of Google, Amazon, Microsoft, and Meta have plunged this year (even more than the broader market) as advertisers cut spending and high interest rates depress valuations. Last week, Microsoft cut 1K employees, adding to the 44K+ tech workers laid off in the US this year. Apple reportedly halted some iPhone 14 Plus production in China as demand cools, while Google’s forecast to have its slowest revenue growth in years. With rates on the rise, analysts aren’t expecting stellar results when techies report this week.

Still fizzy… Some snacks never seem to go out of style: grocery staples like Coca-Cola, Kraft Heinz, and Campbell Soup have outperformed the market this year as shoppers keep stocking faves like Kraft mac, eating the price hikes. This month snack giant Pepsi raised its annual forecast, betting on continued Cheetos demand through an economic downturn (consumer goods have historically been resilient during recessions). Still, shoppers are starting to swap name brands for cheaper store brands. We’ll see whether that shows when Coke and Kraft report.

The downturn’s in the details… At first things looked OK when big banks reported last week: revenue rose at JPM Chase, Wells Fargo, and Citi thanks to inflated credit-card spending, beating forecasts. But the fine print was ugly: bank profits plunged as trading and deal-making activity slowed (think: fewer IPOs), while high interest rates plunged loan demand (think: mortgages). Banks expect it to get worse, so they’ve set aside billions to cover potential losses from loan defaults. Chase CEO Jamie Dimon expects an economic “hurricane.”

The clock’s ticking… Millions of Americans will likely lose their health insurance when President Biden rolls back Covid aid policies (current expiration date: January 11). When corona was declared a public-health emergency, the government injected billions into resources like free testing and hiring more hospital workers. But with the emergency status set to end early next year, nearly 15M Americans could lose subsidized programs like Medicaid, which hit record enrollment during the pandemic. With hospitals already facing staff shortages, treatment could be even harder to get.

• CryptMo: Over half of active exchange-traded products that track crypto launched after the bear market set in. In other words, institutional investors and tech juggernauts (think: big $$) largely haven't bailed on crypto.
• Flex: Netflix shares popped after it said it added 2.4M subs last quarter, its first gain of the year. Now it’ll stop sharing subscriber forecasts and crack down on password moochers as it laser-focuses on revenue.
• Krogertsons: Grocery powerhouse Kroger said it'll buy rival Albertsons for $25B. The super-merger is about more than just eggs and bread; it’s also about becoming a retail ad giant.

• Metaworse: After spending billions on the metaverse, Meta is struggling to attract users (and its own employees) to its VR-based Horizon Worlds (users have been declining since spring). This year the stock’s down more than 60%.
• Out: British PM Liz Truss announced her resignation Thursday after just 44 days in office. Her tax-cutting plan upset the financial markets, and sent the pound plummeting. A new PM could be chosen as soon as today.
• Whynance: Binance is the world's largest crypto exchange. It's also a web of 73+ legal entities — said to be in a bid to distract regulators — and it won't say which one oversees the main exchange.

• Monday: Diwali
• Tuesday: Earnings expected from Microsoft, Google, Visa, Coca-Cola, Novartis, UPS, Spotify, HSBC, GE, 3M, UBS, Sherwin-Williams, GM, Valero, Chipotle, and Biogen
• Wednesday: Earnings expected from Meta, Bristol-Myers Squibb, Boeing, Ford, Kraft Heinz Co.
• Thursday: Jobless claims. Earnings expected from Apple, Amazon, Mastercard, Merck, Shell, McDonald’s, T-Mobile, Comcast, Intel, Caterpillar, AB Inbev, Altria, Keurig Dr Pepper, and Shopify
• Friday: Earnings expected from Exxon, Chevron, AbbVie, NextEra Energy, and Colgate

Authors of this Snacks own: shares of AB InBev, Netflix, Twitter, Apple, GM, Ford, Google, Shopify, Spotify, Amazon, Microsoft, Uber, Exxon, and Snap

ID: 2529304