Deliveroo is launching a new advertising platform that will offer FMCG brands the chance to promote their products across its app, website, social media, email and push notifications campaigns.
Deliveroo Media and Ecommerce will launch in the UK next month, giving brands access to the delivery firm’s millions of active customers.
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.
Currently, firms are able to make use of Deliveroo’s advertising services, with sponsored positioning for restaurant or grocery partners, for example. However, the new ad platform means FMCG brands will be able to advertise to Deliveroo customers.
Deliveroo’s network of delivery-only ‘Editions’ kitchens and rapid grocery delivery ‘’HOP’ stores are also part of the company’s new advertising proposition. This will enable brands to get content or samples into consumers’ hands as meals and groceries are delivered to their door.
“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,” said Eric French, Chief Operating Officer at Deliveroo.
“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 company noted that advertising revenue is an important part of its drive towards profitability and free cash flow generation. Deliveroo aims to reach an adjusted EBITDA margin (as % of GTV) of 4%+ by 2026, with further upside potential beyond 2026.
Deliveroo Media and Ecommerce will launch in the UK before rolling out to other markets globally. The company is working with Criteo, the Commerce Media company, who will supply the advertising technology and media sales services.
Commenting on the move, Gavin Stirrat, CEO of shopping technology platform Adimo, said: “The news this week that Deliveroo is the latest retailer to add advertising solutions to its offering is an exciting move 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.
“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 e-commerce, 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.”
NAM Implications:
- Interesting when accumulated customer insight can transition to a (lucrative) alternative revenue stream.
- Think of Amazon’s growth in Retail Media.
- i.e. the advantage of being able to reach consumers-in-the aisle…
- …with tailored messages at point-of-purchase.
- Think also how ‘blunt’ traditional media appears by comparison.
- Watch for consolidation…
- Single media buying point
- Consumers wanting to include new types of retailer in their offering, rather than traditional retail
