First of all I think it's a net negative value for society; the world is already drowning in advertising and we don't need more of it. If I'm paying for something the last thing I want is for part of that money to go towards annoying other people that haven't asked for anything with ads for a service that might not be relevant to them (plus in the case of Uber their brand is pretty much a household name at this point).
I also think it's an unsustainable business model; even if you do all things perfectly, there are people out there that might be aware of Uber but will still not be using it for various reasons, so over time the payoff from marketing will still be decreasing. If your business is only sustainable because of marketing then over time, all other factors remaining equal, your profitability will still be declining.
> If companies could just not then you need to explain why apparently everyone is putting their money into something obviously unprofitable.
If every company chose not to do it then we'd all be better off. But since one company does it, the others have to follow otherwise they'd be left behind.
There's also the issue of attributing the profitability of ad spending; a lot of companies spend ad dollars without exactly knowing whether it's actually bringing in revenue (if I search for brand X on Google, they'd be the first hit, but then they also put ads up there, if a person clicks the ad it counts as a conversion and Google gets paid, but was that a true conversion or would the user have clicked on the non-sponsored link had the ad not been there?).
When a company allocates budget for marketing the marketing team will usually spend it all and produce results to justify their own paychecks/pay rises/bonuses and yet those results might not be "true" due to the aforementioned issue for example.
I also think it's an unsustainable business model; even if you do all things perfectly, there are people out there that might be aware of Uber but will still not be using it for various reasons, so over time the payoff from marketing will still be decreasing. If your business is only sustainable because of marketing then over time, all other factors remaining equal, your profitability will still be declining.
> If companies could just not then you need to explain why apparently everyone is putting their money into something obviously unprofitable.
If every company chose not to do it then we'd all be better off. But since one company does it, the others have to follow otherwise they'd be left behind.
There's also the issue of attributing the profitability of ad spending; a lot of companies spend ad dollars without exactly knowing whether it's actually bringing in revenue (if I search for brand X on Google, they'd be the first hit, but then they also put ads up there, if a person clicks the ad it counts as a conversion and Google gets paid, but was that a true conversion or would the user have clicked on the non-sponsored link had the ad not been there?).
When a company allocates budget for marketing the marketing team will usually spend it all and produce results to justify their own paychecks/pay rises/bonuses and yet those results might not be "true" due to the aforementioned issue for example.