How Your Business Can Benefit from Uber’s $100 Million Marketing Mistake

How Your Business Can Benefit from Uber’s $100 Million Marketing Mistake

Uber found that $100,000,000 (one-hundred million dollars) of their $150 million ad budget was being fraudulently billed. And after drilling down, cutting spending, and figuring out where the money was going, they got the same result with 13.33% of their original spend.

Nandini Jammi wrote a great thread about this on Twitter. Sleeping Giants kept hounding Uber about where their ads were appearing prompting them to dig into it and figure out why, even after they had turned off those ads. This led to Uber figuring out they were being defrauded. But further than that it caused them to look more deeply at their spending and the results that really mattered to them.

Ultimately, Uber got the same results spending $20 million as they had by spending $150 million. Similarly, Headphones[.]com investigated their spending to get the results they wanted and were able to cut their spend from $1200 per day to $40 with no change in performance! This is an annual reduction from $432,000 per year to $14,400 for the same result!

What are you spending on marketing? What results do you expect from your marketing efforts and activities?

Do not let a marketing company or agency tell you that they will get you “reach”, “branding”, likes, and clicks. Those are not enough. They are not your ultimate desired result.

Marketing has one goal! Lead generation! Marketing’s role and function is to generate leads. Anything else is a distraction.

If Uber had tracked the metrics that mattered to them and paid for marketing based on that, they would not have lost $100 million per year on fraudulent ad spending. And they would have saved another $30 million on inefficiencies. “Reach”, “branding”, likes, and clicks do not matter if they do not turn into genuine leads.

Again, that’s the function of marketing. Lead Generation!

This is the same for your business, no matter the size. Whether you have annual revenue of $100k, $1M, $10M, or $1B, the function of your marketing efforts, activities, and spend is to generate leads who have the potential to turn into paying customers. It is literally that simple. The hard part is maintaining the focus on lead generation in a world that keeps marketing their marketing.

I had a new client whose ad spend over the previous twelve months was over $76,000. This for a business whose revenue over the same time period was just over one million dollars. This seemed high for their industry, so I asked them to figure out how many leads were being generated from this spend. To their credit they gathered enough information to be able to look back and calculate this. Over the same time period this ad spend had generated 162 leads. 97 of those leads converted to paying customers. So, each lead cost them about $471, and their customer acquisition cost was ultimately $787 from their spending on ads. The problem was that their profit per customer averaged $170. They were spending more than four times what they were getting back for each new customer acquired this way. We reduced their spend by over $70,000 and they redirected some of their marketing efforts. They were able to maintain their lead generation with more than a ninety percent reduction in their ad spend.

Think of it this way. If a marketing company sells you on a plan where you pay them $3,000 per month to manage your social media ad spend and they promise to deliver reach, visits, likes, and clicks, what are you getting from it? Do those results turn into revenue? Don’t be tempted to explain and justify these results as valid. The marketing company may be trying to sell you on “results” that are easy to track but don’t really matter, just like Uber.

If you are spending on marketing and advertising, you owe it to yourself and your business to focus on your desired result and figure out the most efficient ways to get there. Remember, there are no expenses in business, only investments. So, what is your marketing investment giving you in return?


When you are ready to take your business to the next level and get started on making it truly process dependent, check out the Focus Forward Business Programs. There’s a fit for any size business from just getting started to established, multi-million dollar businesses.


Read Nandini Jammi’s full thread and follow @nandoodles on Twitter. https://threadreaderapp.com/thread/1345774768746852353.html

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