Deliveroo has launched a new advertising platform, called Deliveroo Media and Ecommerce, providing new marketing opportunities for a wider range of brands.
Brands will be able to advertise to Deliveroo’s eight million monthly users with relevant offers across its app, on the website and as part of social media, email and push notification campaigns.
Reaching customers as they wait for food deliveries
For the first time, advertising is planned for Deliveroo's order tracker page, with new formats to launch over the coming months, alongside sponsored search listings.
Eric French, Chief Operating Officer at Deliveroo, said: “Deliveroo has over eight million monthly active consumers, many of whom are ordering with us on a weekly basis, so we have an engaged and valuable audience for brands to connect with. Our new advertising platform will enable restaurant and grocery partners to tell their story emotionally and effectively whilst ensuring Deliveroo customers continue to receive a food-first experience."
The platform will include restaurant partners as well as FMCG companies, primarily on the grocery side. This will be done in a way that is mindful of the consumer experience, which Deliveroo said was a priority for the new ad slots.
“Overlaying ad inventory with Deliveroo purchase and audience data could create a compelling media proposition”
Gavin Stirrat, CEO, Adimo, said the move provides a significant new opportunity for both the media and advertising industry and for FMCG brands.
“Adopting a similar approach to Boots Media Group, Tesco Media & Insights and Carrefour Links in France, the initial proposal is on-deck, in-app advertising that creates a perfect closed loop for advertising targeting and attribution. With the ongoing death of cookie tracking, this is going to be appealing to brands and agencies alike.
“I suspect the product roadmap already includes plans to extend their inventory off deck, to third party publishers and apps developers. Overlaying this inventory with Deliveroo purchase and audience data – in a similar manner to the hugely successful Amazon DSP and Facebook Audience Network – could create a compelling, scaled, brand suitable media proposition.
Leveraging new ad platform to boost revenue
Advertising revenue is an important lever to drive Deliveroo's path to profitability and free cash flow generation.
French added: "Advertising revenue is a small part of Deliveroo's current model but a big opportunity and a lever the company can pull to increase net revenue.
Deliveroo aims to reach an adjusted EBITDA margin (as % of GTV) of 4%+ by 2026, with further upside potential beyond 2026.
With a food delivery marketplace in 11 markets, and with over 170,000 restaurants and close to 13,000 grocers on the platform, Deliveroo Media and Ecommerce is well positioned to connect brands to millions of engaged users.
Deliveroo is working with Criteo, the Commerce Media company, who will supply the advertising technology and media sales services. Deliveroo Media and Ecommerce will launch in the UK before rolling out to other markets globally.
“Brands will be attracted to Deliveroo’s masses of deterministic first-party data and its youthful, urban audience”
Alex Brownsell, Head of Content, WARC Media, said: "It's no surprise that Deliveroo has turned to retail media as a means of driving greater profitability. US-based retailers like Amazon, Walmart and Kroger have seen rapid growth in this space - a trend WARC is following closely with our new Digital Commerce product - while other app-based businesses like Uber have followed suit.
“With audience targeting on the open web becoming more challenging as a result of third-party cookie deprecation and restrictions around mobile device ID usage, brands will be attracted to Deliveroo’s masses of deterministic first-party data and its youthful, urban audience. However, advertising must be integrated in such a way as not to compromise user experience. For brands, the challenge will be how to stitch together activity across disparate walled-garden platforms to create a holistic measurement of advertising effectiveness."
“Attention is everything for ads today; users waiting for food might not be the most susceptible”
Paul Coggins, CEO, Adludio said: “In this post-privacy world, you could argue that advertisers are looking for three key things: first-party data, ads with formats that garner attention, and ads which are placed in the right contextual environments. The big benefit to advertisers of Deliveroo becoming an ad platform is the first-party data that they will now be able to glean from the food delivery site.
“However, is the context within which these ads appear on Deliveroo going to be of sufficient value to drive long term revenue? The ad space available comes after the point of purchase on the order tracker page. There may be restrictions on the ad formats possible here, providing limited appeal to advertisers as a result. Attention is everything for ads today; users waiting for food might not be the most susceptible, as their focus is already elsewhere.”
“A potential express delivery partner for D2C brands with low value goods”
Stirrat continued: “Where FMCG brands will be particularly interested is the ability for an express delivery partner to solve the last mile logistics of a D2C style service for low value goods. This has previously proved problematic for impulse purchase brands, such as chocolate, or low intent brands, such as dishwasher tablets, where the economics of delivering a single product in a timely manner did not add up. Including an express delivery partner like Deliveroo into their retailer mix will help solve this challenge.
"With so many retailers globally now offering media propositions, the next evolution brands will be seeking is consolidation. This will come in two forms. Firstly, from a media buying perspective they are going to want the ability to execute their campaigns across all retail media channels from a single buying point. And secondly, from a consumer perspective, brands are going to want to include Deliveroo and other new entrants into their mix of retailer offerings, rather than individually siloed. Insight from our Adimo eCommerce analytics platform reveals that offering consumers a wider range of retailer options at the point of purchase increases engagement with online point of sales by 134%.
“Announcements like Deliveroo’s demonstrate that eCommerce, shoppable marketing and retail media continue to converge. This is creating huge new opportunities for FMCG brands to connect with their audiences at scale, optimise campaigns across all marketing touchpoints, and drive attributable sales. The omnichannel Holy Grail is getting closer every day.”
“Interesting to see if or how their retention rates are impacted”
Sue Azari, eCommerce lead, EMEA & LATAM, AppsFlyer: ‘’This is a smart move from Deliveroo, and signifies a departure from a strategy focused on consumer acquisition and retention through vouchers and promotions - an approach notoriously reliant on outside investment – towards a tactic that capitalises on existing app users. In this economic climate, it’s never been more important to diversify channels and revenue streams, and we can probably expect to see other FCMG businesses follow suit.
‘’The main challenge will be ensuring that the user journey or path to conversion isn’t obstructed in the process, and it will be interesting to see if or how their retention rates are impacted. Looking ahead, it would make sense for Deliveroo to also roll out an ad-free option for their Premium members, a technique that’s being implemented across all industries, most recently by Snapchat with the launch of Snapchat+.’’
“What could be better than knowing what people want, exactly when they want it?”
Tony Ayaz, CEO, Scuba Analytics: "Deliveroo launching its new ad platform is a great example of how being able to leverage first-party data with real-time insights will generate a really valuable proposition for advertisers. What could be better than knowing what people want, exactly when they want it? Especially for a company like Deliveroo which caters to a customers’ most immediate needs and cravings, a detailed understanding of the audience – new and existing – will be key for brands. To realise this huge opportunity Deliveroo needs to be able to blend historical data and behavioural patterns with real-time user insight to maximise the opportunities for brands to reach their audiences with relevant, targeted campaigns."
“Deliveroo will need to examine how they grab the attention of audiences in real-time”
John Tigg, GM, International, Yieldmo: “With record-high inflation, supply chain constraints and a looming recession, we are already seeing consumer shopping habits changing by cutting back on groceries. Advertising budgets are being adjusted to take advantage of these trends. Deliveroo will need to examine how they grab the attention of audiences in real-time and what true engagement really looks like. In today’s media world, attention is one of the most valuable and scarce resources we have. The truth about customers’ interactions with ads not only provides interesting insight for the brand, but improves the overall ad experience for their users”.
"Revenue stream diversification has never been more important"
Sarah Rew, Senior Director, Global Marketing, LoopMe: “Deliveroo’s new venture emphasises the value of maximising on a highly engaged, existing user base via in-app advertising. Revenue stream diversification has never been more important, and by broadening their advertising capabilities to a wider range of FMCG brands, Deliveroo will be better equipped to stay self-sufficient in the current financial crisis.
“As technology and the physical world become increasingly intertwined, it’s an exciting time for in-app advertising. Deliveroo will allow brands to add samples to users’ deliveries, but there is potential for greater in-app interactivity in the future, through the gamification of ads, for example, or the use of AR-enabled “try me” functions. Our own research has shown users are more likely to pay attention to interactive ads, so brands should be capitalising on the huge potential in-app has to offer.”
“A convergence of Retail Media Networks in the future”
Graham Tricker, Commercial Director UK, LiveRamp commented: “This move from Deliveroo is a clear sign that brands can utilise delivery networks to build high-margin incremental revenue streams for their business. Crucially, this move will allow Consumer Packaged Goods (CPG) companies to access an emerging, highly attentive demographic, who purchase their groceries or weekly takeaway via a service like Deliveroo.
“I expect we’ll see a convergence of Retail Media Networks in the future with these delivery services allowing brands and retailers to work more closely. As brands and retailers move towards data collaboration to optimise marketing investments and grow market share, these networks will offer them data-rich, privacy-first insights, allowing brands to communicate more effectively with their consumers.”
“The audience will skew towards larger cities, which will likely limit regional campaigns”
Rohan Naismith, Programmatic Account Manager, Incubeta, said: “Deliveroo launching its ad network will bring significant opportunities for advertisers to reach highly engaged users using signals that were previously inaccessible. If provided Deliveroo’s data and insights on user habits will allow brands to tailor their message to be highly relevant and engaging. In addition, with ads placed on the page that enables users to track their order, marketers are likely to achieve increased attention, and therefore ad effectiveness.
“However, it’s worth noting that the audience will skew towards larger cities, which will likely limit regional campaigns. At this stage, Deliveroo will also be missing out on connections between brands with high overlap, like entertainment. So it will be interesting to see if the platform opens up to non-FMCG brands as it develops.”