How Deliveroo plans to expand its ad platform

It would play a significant part in Deliveroo’s diversification strategy, with bosses promising investors the strategy would help the company reach an adjusted EBITDA (earnings before tax) of 4%+ by 2026.

After initially launching for restaurants in 2021, it quickly expanded the offering to FMCG, CPG and entertainment brands last year.

Deliveroo’s vice-president of advertising, Adam Bishop tells The Drum that "it’s working very well.”

“It’s in line with our expectations if not slightly ahead,” he claims. “In terms of advertiser return, month after month, that’s actually moving ahead of where we expected it to be.” Of the 50,000 restaurants using the ad platform on a regular basis, return rates are over 90%, Bishop adds.

Advertisers can buy ad space both on and off platform. Off-platform, for example, there are opportunities on social, CRM, push notifications, product sampling and flyers. "When you think about rapid delivery and quick-commerce as a whole, whilst it's a digital and data-led business, we have multiple physical interactions with our consumers on a minute-by-minute basis and is incredibly localized," Bishop says.

The central tenet of Deliveroo’s product, Bishop says, “is that we aim to enhance the consumer experience or, at the very least, make sure it’s a neutral consumer experience by introducing ads into the overall experience.” This has informed his strategy to be more “thoughtful” when adding new advertisers and ad units.

“It’s a very iterative cycle where, if we see any risk that we’re doing something that might degrade consumer experience, we immediately row back and start again,” he explains. “I’m way more comfortable working with that choice than rushing on decisions that might have long-term consequences that we can’t see that really degrade consumer experience.”

Although primarily working with restaurants, FMCG and entertainment brands, Deliveroo is not restrictive on which advertisers it lets on the platform, but it will be restrictive on where certain brands will appear. “We have to think about a higher degree of relevance through our platform than maybe you do if you’re a publisher,” Bishop says. “We hold a pretty high bar in the order flow in how we think about relevancy.”

Coke & ITVX campaigns

One brand to tap into the potential of the platform early on was Coca-Cola. In a recent campaign, it harnessed the dinner-time ordering rush to push ads that suggested pairing the meal with Coke, appealing to restaurant customers but also tapping into grocery shoppers. The ads had an add-to-basket function to simplify the journey.

Deliveroo Advertising’s global director of commercial operations, Alex Prouhet, says the “campaign acted as an awareness driver, and then throughout the user journey into consideration and ultimately, conversion.” He revealed it achieved a 6x return on spend for the drinks giant.

Away from FMCG, Deliveroo also ran a partnership with ITVX that took out spots on the app’s order tracker. “Order trackers have five times the number of attention and views as any other page on the app,” Prouhet explains.

This was then coupled with off-platform activations through flyers and CRM. Deliveroo shoppers would see an ad for a show on ITVX that was targeted to them based on shopper behavior. “It was a full-funnel activation that was relevant to Deliveroo customers as well,” he says. The order tracker was seen after nine million orders and had a click-through rate of 1.34% - a “huge attention grabber, and a food moment created by ITVX,” Prouhet says.

Adding brand marketing & shopfronts

So, what’s next for Deliveroo’s advertising platform? Bishop says it wants to focus on giving advertising the ability to do more brand-building work.

"We [Deliveroo] do have some brand-building ad units today but our ambition is to go further," he explains. Currently in the planning stage, Bishop has ideas for brand marketing formats that can be used throughout the food ordering journey. “Traditionally, some people conflate a marketing funnel with an order journey, but we don’t like to think about it like that."

Elsewhere, Deliveroo's ad team has experimented with what they are referring to as Amazon-style “storefronts” where brands can customize their presence. "This is how an individual brand or restaurant talks to its customers in a look and feel that works for them," he explains, instead of adopting Deliveroo’s pre-set ad formats.

Finally, the year ahead will be about optimizing the “architecture” of the platform, along with giving advertisers more measurement and performance metrics. “Whilst that might not be quite as shiny and glamorous as certain new formats, it’s a big part of how we think about how we build this platform out and do it in a way that makes it sustainable for us and highly useful in an advertisers media mix,” he says.

Deliveroo will also roll out its FMCG ad platform in another three markets in the coming year. “We feel very comfortable that we’ve built an ad platform that enables us to really understand, across a long-term view, the impact of our ad units on a consumer experience,” Bishop concludes.