Restaurant ads that appear above the app’s search results have started selling. That’s because companies in the food delivery industry, who are losing most of the money, are digging deeper into advertising to increase revenue.
The company already paid marketers to deliver ads and banner ads that offered free distribution and discounts, but didn’t serve ads at the top of search results until testing the tool earlier this year. did not start. ..
DoorDash has also built an advertising platform that allows restaurants to purchase placements through a bidding system without the help of an advertising vendor. The restaurant pays for the sponsored listing only when the user clicks on the ad to place the order. DoorDash said the self-service system is designed to help promote the brand to local restaurants.
Toby Espinosa, vice president of DoorDash Ads, said: Buyers can choose to direct their sponsored list to new, existing, or all customers, but DoorDash has targeted categories to include other user groups, such as frequent hamburger buyers. I want to expand.
In addition to new services for restaurants, DoorDash has launched “Attention Lists” for consumer packaged product brands to strengthen their position within the convenience and grocery categories.
The move coincides with growth in consumer businesses, including Wal-Mart. Ltd.
and CVS Health Ltd.
Provides advertisers with more ways to reach consumers using retailer data.
Founded eight years ago, DoorDash posted a profit in the second quarter of 2020 as demand for home delivery surged early in the Covid-19 pandemic, according to documents filed for an initial public offering last year. However, it did not make annual profits. It reported a net loss of $102 million in the three months to June 30. The company says it has over 450,000 merchants selling through the platform.
However, DoorDash is wary of turning consumers off in the highly competitive food delivery business by removing too many ads in the app. For restaurants, you’ll only see a sponsored listing above the search results or in the food-specific section of the app. Two ads are allowed in other areas, namely the Grocery, Convenience, Pets, and Alcohol categories.
“We cannot ruin the consumer experience. You will never see us outside the ship,” Espinosa said. “We’ve built an advertising platform that seeks to coordinate incentives between advertisers, consumers, and DoorDash.”
DoorDash declined to say how much of its revenue came from ad sales or how much revenue it intends to generate from new advertising products. The company said the advertising services aim to boost not only its profitability, but also the success of its merchants. “We believe this connects us with our merchant partners and delivers the best long-term results for everyone,” a DoorDash spokesperson said.
DoorDash is Grubhub Inc. It has more than half of the US market share of delivery apps, ahead of competitors such as Uber Technologies and Uber Technologies. of a corporation
Uber Eats and Postmates, according to consumer data analytics firm Bloomberg Second Major.
But companies are increasingly competing for advertisers as well as consumers.
Uber, which has been expanding its advertising business, introduced sponsored lists to its Uber Eats app in the United States last year. This model uses the pay-per-click model whenever a consumer clicks on an ad, even if it is not creating the ad. Negotiate. Grubhub operates a marketplace that helps restaurants ensure better placement in search results and provides other marketing support along with a fee-based system. Earlier this year, the company’s CEO said that advertising is the key to the company’s future profitability.
Nicole Milnathorpe, chief financial officer of Florida-based casual dining chain Smokey Bones, said her company works with several outstation shipping companies, but its main partners are Uber Eats and Door Dash. She said she has 60 full-service Smokey Bones restaurants in the United States, two ghost kitchens, two dedicated delivery chains and a variety of advertising equipment giving the chain flexibility.
“Different markets react differently to different types of marketing,” Milthorpe said.
Milnathorpe and DoorDash.
“What we see from other partners and other advertising metrics is based on impressions, and it is very difficult to equate impressions with actual orders,” she said. “Payment for the acquisition is a very clear indicator.”
write to Megan Graham at [email protected]
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