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Last year, meal delivery platform Grubhub<\/strong> entered the increasingly crowded commerce media arena with the debut of Grubhub Ads, developed in partnership with Koddi. Grubhub was inspired by the meteoric\u00a0rise of retail media, which also has propelled the debut of media networks from other delivery and transportation services such as Uber<\/strong>\u00a0and\u00a0Lyft<\/strong> as well as companies more ancillary to the retail landscape, such as BNPL solution\u00a0Klarna<\/strong>, payments provider\u00a0PayPal<\/strong> and\u00a0United Airlines<\/strong>.<\/p>\n Each new media network comes to the table with a ready-made slate of advertising customers in the form of the companies they already serve through their core business, but each is also challenged to make the case for what differentiates <\/em>them from the growing commerce media crowd \u2014 brands only have so many ad dollars to go around, after all. The Grubhub and Koddi teams took Retail TouchPoints<\/em> behind the scenes to explore their unique media proposition and share their plans for the future.<\/p>\n The Grubhub Marketplace currently boasts more than 375,000<\/strong> merchant partners, and while it has expanded beyond its roots in food takeout, restaurants remain the bulk of the companies it serves. That gives Grubhub Ads a distinct focus both on the advertiser and customer sides of the equation.<\/p>\n In fact, the man in charge of the company\u2019s new media network doesn\u2019t have the traditional advertising background one might expect: \u201cI lead our Merchant Solutions team, which is focused on supporting restaurants and merchants beyond the core delivery [offering], so giving them smarter ways to grow and to reach new diners; Grubhub Ads is the latest evolution there,\u201d said Kyle Emmett, Senior Director of Advertising and Merchant Solutions at Grubhub in an interview with Retail TouchPoints<\/em>. \u201cBut I don\u2019t come from a heavy advertising background; my background is in restaurants and hospitality. And [that is reflected in the fact that] as we build out this ads program, the number one thing we\u2019ve been focused on is adding value for our merchant partners, restaurants,<\/strong> and building it the right way to support them.\u201d<\/p>\n The potential value of that ad offering increased exponentially late last year when the company was acquired by \u201cfast fine dining\u201d retailer Wonder Group<\/strong>, which was founded by serial entrepreneur Marc Lore and also owns the meal kit brand Blue Apron<\/strong>. \u201cBringing Wonder and Grubhub together is the next step in our vision to create the super app for meal time<\/strong>, re-envisioning the future of food delivery,\u201d said Lore at the time of the acquisition.<\/p>\n That ambition also appears to extend to being an advertising partner for food brands of all flavors, as evidenced by Wonder\u2019s subsequent acquisition of the food-centered media company Tastemade<\/strong> <\/strong>earlier this year. The deal provides Wonder with a content studio that has been producing food and cooking content since 2012, and the eventual goal is to allow viewers watching a chef make a signature dish to then easily order it for delivery through Wonder, Grubhub or Blue Apron, Tastemade CEO and Co-founder Larry Fitzgibbon told the\u00a0Wall Street Journal<\/em>.<\/p>\n \u201cContent in this space is becoming more and more important, and we have a real opportunity to enrich the content experiences that folks have with Grubhub<\/strong> and monetize it at the same time,\u201d said Eric Brackmann, VP of Commerce Media at Koddi in an interview with Retail TouchPoints<\/em>. \u201cThere is so much that the Wonder [acquisition] unlocks for Grubhub as a brand and the way it engages with diners.\u201d<\/p>\n \u201cWe\u2019re really excited about looking at building out a media network that combines Tastemade\u2019s content production and advertising business with Grubhub\u2019s restaurant brands and Koddi\u2019s capabilities, to bring all these things together and provide multiple new ways to reach consumers through a full-funnel approach<\/strong>,\u201d Emmett added.<\/p>\n Even before all that comes to fruition, the Grubhub Ads platform is delivering pretty impressive results for its advertisers, which now number in the tens of thousands<\/strong>. In its first year, Grubhub delivered a 6X<\/strong> increase in incremental ROAS (return on ad spend) for some of its largest enterprise merchants, as well as a 13%<\/strong> increase in incremental sales. Additionally, Grubhub itself has seen a 20%<\/strong> increase in ad click-through rates and a 6%<\/strong> increase in revenue.<\/p>\n As those numbers indicate, Grubhub did have an ad offering before it launched its full-fledged media network, which primarily encompassed sponsored listings. But that legacy offering wasn\u2019t built to deliver the kinds of variability, targeting and measurement<\/strong> that Grubhub\u2019s merchants are increasingly demanding, which prompted the partnership with Koddi.<\/p>\n The other challenge for Grubhub is that its merchants include the full spectrum of restaurant ownership,<\/strong> from large national chains to local mom-and-pops, each of which comes to the platform with varying degrees of expertise and resources with regard to marketing and advertising.<\/p>\n With Koddi, Grubhub was able to launch a fully branded self-serve platform<\/strong> offering granular campaign creation, targeting and reporting features that can serve both merchants with no marketing experience and enterprises with more sophisticated teams and demands. Through the portal, merchants can create customized or quick-start campaigns<\/strong> across a range of formats and placements. The platform also includes a range of performance reports<\/strong>; automated tools<\/strong> to optimize campaigns for better performance; the ability to run tests to measure incrementality;<\/strong> and a Quality Scoring algorithm that helps advertisers boost the relevancy of their ads<\/strong>. <\/p>\n \u201cNow we have capabilities that [work] for both large enterprise brands running through media agencies and the mom-and-pop restaurant down the street that has never advertised before in their life,\u201d said Emmett. \u201cThey can do things like target individual geographies at the same time. [Things like] automated bidding and automated campaign improvements are driving additional relevancy. The Quality Scores are allowing them to get more clicks, and not just more clicks, but more revenue as well, which is why we\u2019re seeing such healthy ROAS returns.<\/strong><\/p>\n \u201cBecause we are very targeted [from a category perspective] and we\u2019re building our product focused on a very niche area, in a lot of cases we go deeper rather than wider to really show that value<\/strong>,\u201d Emmett added. \u201cWe know [customers] are on Grubhub for a reason \u2014 they\u2019re hungry, they want to order, they want to know what\u2019s in their area \u2014 so by having these new targeting solutions, we\u2019re able to help them discover restaurants<\/strong> that may not have the same level of awareness as the national brands or discover new items that they didn\u2019t know restaurants carried.\u201d<\/p>\n These new targeting capabilities have led to interesting new insights for advertisers. \u201cWe\u2019re able to target based on device type, order type, location, intent, cuisine and their dining history,\u201d said Koddi\u2019s Brackmann. \u201cSome of those aren\u2019t necessarily viable targets in broader programmatic ecosystems, but because of that direct relationship Grubhub has with its consumers, they can take that [intel] and let their merchant partners take advantage of it to improve their business.<\/p>\n \u201cDayparting is a really good example of that,\u201d<\/strong> Brackmann added. \u201cUntil I got into this space, I wouldn\u2019t have even thought of this, but restaurants don\u2019t necessarily need to do a lot of advertising during <\/em>mealtimes. What\u2019s actually way more accretive for them is to daypart and target the in-between times, when there\u2019s still staff in the restaurant, there\u2019s still food in the refrigerator, the building is still there [but business is slower]. Those are the places where we can drive immense amounts of incremental revenue for the partners on the Grubhub platform and makes Grubhub unique in the space.\u201d<\/p>\n \u201cWe can [now] go back to merchants and restaurants and tell them, maybe you should invest more using multipliers during lunch,\u201d added Emmett. \u00a0\u201cOr maybe, if it\u2019s a coffee shop, you want to advertise late at night to get people pre-ordering coffee for the morning, because we\u2019re seeing that those orders are converting better. That\u2019s the type of insights we\u2019re able to give to restaurants so that we\u2019re adding value, not just driving revenue.<\/strong>\u201d<\/p>\n And there are still many more capabilities that Grubhub hopes to add, including expanded relevancy, new ad formats and advanced targeting options. \u201cGrubhub Ads is just a year old, so we\u2019re just getting started,\u201d said Emmett. \u201cThere are a lot of things in the works. Think more automation, more insights, smarter optimizations so we can incorporate real-time ordering behaviors and real-time merchant feedback<\/strong>. The goal here is to make Grubhub the key growth channel for every restaurant.\u201d<\/p>\n Brackmann also mentioned off-site advertising as an area of future opportunity, and of course there are the various integrations that could come into play with the expanding Wonder portfolio.<\/p>\n \u201cGrubhub has a very large roadmap where we\u2019re dedicating resources, and advertising falls within that,\u201d said Emmett. \u201cWe\u2019re working closely with the Koddi team to share where we\u2019re investing and to understand where Koddi is investing as well, and a lot of times we\u2019re working together to make sure that what we\u2019re working on can deliver the best results for everyone evolved.<\/strong> As much as the tech matters, we\u2019re still in hospitality, it\u2019s a people business, and that\u2019s why [Koddi\u2019s willingness] to build with us and grow with us has been so important.\u201d<\/p>\n \u201cThis is a crowded space, there are a lot of folks entering [commerce media],\u201d added Brackmann. \u201cWhen you look at the broad spectrum of options out there, what I value is the experience \u2014 the experience that diners have, the experience that restaurants have, the experience that media buyers have \u2014 having that focus is the thing that is most important to me in terms of getting it right for everyone. We want to partner with brands like Grubhub that are doing it right and are really adding value to the ecosystem, not just looking to put ads everywhere<\/strong>.\u201d<\/p>\nNew Ad Capabilities + Wonder and Tastemade = An Interesting Media Recipe<\/strong><\/h2>\n
Building a Media Network that Delivers (Results, That is)<\/strong><\/h2>\n
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Zeroing in on the Nuances of Restaurant Commerce<\/strong><\/h2>\n
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Making Grubhub a \u2018Growth Channel for Every Restaurant\u2019<\/strong><\/h2>\n