How Uber avoids the ads

How Uber avoids the ads

Online taxi business Uber has avoided all the usual methods of marketing and instead relies on recommendations.

The chances are that you’ve heard of Uber, an ad hoc service where people hook up with freelance drivers via an app – often getting them to their destination more cheaply than a traditional firm taxi.

But when was the last time you saw an Uber advert – online or in print? Well, you won’t have, because Uber has put aside the usual strategies. Quite simply, Uber’s growth is driven by word of mouth. In an online interview, Max Crowley of Uber’s Chicago branch said: “When someone sees the ease of use, the fact that they press a button on their phone and in under five minutes a car appears, they inevitably become a brand advocate.”

Even in the early days the company avoided conventional advertising, preferring instead to sponsor tech events frequented by in-the-know audiences, and to rely on the social prestige that comes with calling up a ride through some simple touches on your phone – not only impressing your friends but exposing them to the company and creating potential new customers.

Is it possible for a company that delivers a satisfying experience to grow its customer base substantially without traditional ads? There is, naturally, an element of risk in putting so much emphasis on word of mouth – largely face-to-face peer group interaction – to grow the brand in a positive way: if someone has a poor experience it is likely to appear on social media, and the whole concept will work in reverse.

However, even negative press has worked well for the firm. Uber has been able to generate significant publicity as more traditional competitors publicly object to its methods. Cabbies from Delhi to New York have put Uber on the front page by protesting against the way unregulated drivers using the app are undercutting their prices – but this negative publicity has boosted brand recognition, and many consumers only hear “Uber is cheaper”.

The company also offers a referral scheme, to further encourage people to share with their friends.

Looking at Uber’s marketing strategy in terms of the bottom line, it’s hard not to be swayed by the fact that it’s spending little on advertising (though a lot on lobbying). When you compare this with companies whose banner ads have a habit of appearing with monotonous frequency, you can’t help but wonder how much has been spent both in terms of both development and placing – and who got the better deal.

Many consumers have conditioned themselves to ignore online ads, steering their cursors towards the little x in the corner as soon as one appears, or shouting at the screen when their mobile game is interrupted by an unwanted placing. By contrast, a recommendation from a friend – or the personal experience of getting the benefit of the service when somebody in-the-know has booked – is a powerful persuader.

One thing that cannot be denied is the success of Uber’s system. Yes, it might seem archaic in comparison to some programmatic strategies or SEO, but the popularity of Uber’s service has made it effective. Founded only six years ago, Uber is now present in more than 300 cities – and has overtaken Facebook as the fastest-ever rise to a value of more than US$50 billion. The growth of this disruptive online service has been entirely driven by the power of words.

Chris Gilson is a journalist and writer for CPL. He is currently the editor of several industry-leading titles, and has over a decade of experience in the media industry. Among his interests are poetry, literature and Cornwall.

Chris Gilson Journalist CPL
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