T-Mobile buys ad network for ride sharingT-Mobile buys ad network for ride sharing

T-Mobile said it acquired Octopus Interactive for an undisclosed amount. The company described Octopus as the nation's largest network of interactive video screens inside Uber and Lyft vehicles, reaching over 5 million unique riders per month.

T-Mobile said it will put the operation into the Marketing Solutions division it stood up last year. The division is headed by Mike Peralta, a longtime advertising technology executive.

"We have an ambition to be a multibillion-dollar player in the ad tech business," Peralta told AdExchanger.

T-Mobile's journey into advertising technology began in 2019 when the company quietly acquired mobile marketing startup PushSpring. And it crystallized last year, shortly after the operator said it would begin automatically enrolling its customers into a program that will allow T-Mobile to sell the details of its customers' web and app activities to advertisers.

But Peralta told AdExchanger that T-Mobile hasn't been aggressively pushing its new advertising business.

Now, though, the operator's acquisition of Octopus opens up a new avenue for growth: video and digital out-of-home (DOOH) advertisements. "This adds new arrows to our quiver," Peralta told AdExchanger, because Octopus' ads are essentially located in "a living room in the backseat of a rideshare."

According to T-Mobile, the market for DOOH grew 80% over the past year.

Figure 1: Octopus displays advertisements in inside Uber and Lyft vehicles.
(Source: Octopus)

Another element in T-Mobile's Octopus acquisition: The phones used by drivers in the Octopus ad system will be connected on T-Mobile's network.

Broadly, T-Mobile's new advertising business is mainly focused on helping advertisers sell messages targeted to mobile customers based on their activities and the apps on their phones. For example, one unnamed grocery brand used T-Mobile's Marketing Solutions data to identify people who visit stores like Whole Foods and Costco, and then matched that data to people with the Pinterest app who also fit T-Mobile's demographic profile for "millennial moms." The brand then created an ad campaign to specifically target those users.

T-Mobile's marketing service only supports ads in apps on Android phones. It doesn't work on phones' web browsers or on Apple phones. That's partly due to an industry-wide shift from browser tracking cookies as well as Apple's decision to prevent app-tracking in its latest iOS release.

T-Mobile's further investment into the ad-tech space is noteworthy considering both AT&T and Verizon have been backing away from the sector. AT&T announced just last month it would sell its Xandr programmatic advertising business to Microsoft for an undisclosed amount. And, as noted by AdExchanger, the trend is global: Singtel in Singapore is reportedly looking to divest Amobee while Norway's Telenor recently sold Tapad.