A penny saved is a penny earned. Uber learned this the hard way and with much more than a penny - a whopping $100 million to be precise. Giving in to the ad-spending temptation, looks like Uber left no stone unturned. Just when the ride-hailing company was made to realise it had gone too far when its ads started running on far-right website Breitbart, it decided to block the site and uncovered a multi-million-dollar fraud.
Social media activism organisation Sleeping Giants had pointed out Uber's ads on Breitbart, which is when the ride-hailing platform blocked the site. But the ads didn't stop, so Uber straight up paused 10 percent of its ad spend. It was fearful of the fact that such a dent in the ad-spending budget would be reflected in user acquisitions. What happened was far worse.
Even after pausing 10 percent of its ad spend, it realised Uber's ads weren't converting. A cause for concern when the company was funnelling hundreds of millions of dollars.
How NOT to spend $100 million?
After the initial realisation, Uber experimented further and realised two-thirds of its ad budget wasn't needed. To put this into perspective, Uber basically was spending $100 million on ads that yielded no results out of its total $150 million ad spend.
"We turned off 2/3 of our spend, we turned off 100 million of annual spend out of 150, and basically saw no change..." Kevin Frisch, the former head of performance marketing and CRM at Uber, said on the Marketing Today podcast last week.
"What we saw is a lot of installs we thought had come through paid channels suddenly came through organic," he added.
All those funds could have easily been redirected towards other, more meaningful expenditures such as sick leave, overtime, health insurance and other minimum workforce benefits otherwise denied to its employees.
In a strong-worded year-end wrap, Ad Contrarian noted: "Perhaps the most deeply disturbing aspect of his story was his description of how nobody gave 1/10 of a flying s**t how much money was being p***ed away.
