T-Mobile Enters Rideshare Advertising with Acquisition of Octopus Interactive

T-Mobile USA's advertising unit announced today that it is buying Octopus Interactive, a network of interactive video screens inside Uber and Lyft, marking the telecoms company's entry into interactive out-of-home advertising. Octopus is the largest national network of its kind, according to a press release. The terms of the deal were not disclosed. “The beauty of Octopus is it allows us to create more distribution,” vp and gm of T-Mobile’s ad-tech division, Marketing Solutions, Mike Peralta told Adweek. “Everybody has a handset and everybody is taking Ubers, so that provides a lot of connectivity.” Octopus partners with drivers to offer back-seat tablets with live games, including some that give away cash prizes, ride information and weather, through which ads are interspersed. Through the deal, T-Mobile not only gets access to more screens, but to Octopus’s existing clients, including Audible, Fox Entertainment and Philo. Octopus’s devices will be powered through T-Mobile’s network. The acquisition comes at a time when OOH advertising is seeing a resurgence after the pandemic depressed the market. OOH revenue was up 38% year-over-year in the third quarter of 2021—the latest period for which data is available—and digital OOH revenue increased 56% in the third quarter from the year prior, according to the Out of Home Advertising Association of America. Also reflecting the increased attention to the space, TikTok is entering the out-of-home space for the first time via a partnership announced last week with Atmosphere, a streaming TV platform for businesses. Octopus has been growing too—its network of drivers grew 35% in the last quarter, allowing its content to reach over 5 million unique riders per month, according to a press release. The next media revolution is definitely motorized.Octopus CEO Cherian Thomas Terms of the transaction were not disclosed, but in November 2019, Octopus raised $10.3 million from the digital venture arm of Sinclair Broadcast Group and MathCapital, an investment firm tied to ad vendor MediaMath, following a $3 million seed round. Funds were earmarked to help Octopus break into programmatic advertising. When it was founded in 2018, Octopus first focused on direct sales to score blue-chip deals and establish its reputation as a premium supplier, Octopus CEO Cherian Thomas told Adweek in 2019. This past summer, Octopus announced partnerships with two digital out-of-home exchanges, Vistar Media and Place Exchange. Of note, Uber OOH, which offers ads on top of vehicles, announced a deal with Place Exchange in November 2021. Thomas told Adweek that Octopus offers advertisers a captive, interactive audience, where riders are “leaning in” to play games and win money, versus the “lean out” experiences of taxi TVs. Octopus says 80% of its riders are between the ages of 18 and 49, 72% are cord cutters and their average household income is over $130,000. T-Mobile's push into the ad space The deal also comes at a time when T-Mobile has been growing its advertising business. The firm acquired mobile app data company PushSpring in 2019. In April 2021, the company updated its privacy policy to automatically share subscribers' web and device usage data with advertisers, though users can opt out. In June 2021, T-Mobile Marketing Solutions hired Peralta, who has previously served in senior roles at Future, AOL, Criteo and MediaMath, to lead the division. The division is focused on leveraging data from T-Mobile’s cellular network to help brands perfect their targeting. T-Mobile’s push into the ad space comes as rivals AT&T and Verizon have been pulling back. AT&T announced a sale of its ad-tech business Xandr to Microsoft at the end of 2021 and Verizon completed the sale of its media division to private equity firm Apollo in September. What distinguishes T-Mobile’s Marketing Solutions from those efforts is that they’re not in the business of making content, said Peralta. “We’re not going to be a publisher,” Peralta said. “We think our core competence is first-party data.” T-Mobile Is Quietly Paving the Way for its Ad-Tech Unit Thomas said that not only does the acquisition bring T-Mobile into the out-of-home advertising space, but it also gives the telecom an advantage in a future where people ride in autonomous vehicles and are looking for distractions. “Just as we went from TV to desktop to mobile, the next media revolution is definitely motorized,” Thomas said. “There is dwell time in the back seat of the vehicle.”