Deliveroo is launching an advertising platform which will give brands the chance to promote products across its app, website, social media, and push notifications.
Deliveroo’s network of delivery-only ‘Editions’ kitchens and rapid grocery delivery Hop dark stores are also part of the proposition, “enabling brands to get relevant content or samples into consumers’ hands as their meals and groceries are delivered to their door” the company said.
Advertising space will also be available on Deliveroo’s order tracking page, as well as sponsored search listings with “new formats to launch over the coming months”.
The advertising platform – Deliveroo Media and Ecommerce – will launch next month, and give brands access to Deliveroo’s more than eight million monthly active consumers. Deliveroo is working with commerce media company Criteo to realise the offering, with Criteo supplying the advertising technology and media sales services. Criteo is involved with Carrefour’s media platform Carrefour Links, and works with FreshDirect, Diageo and Warburtons.
After launching in the UK, Deliveroo Media and Ecommerce will be rolled out to other markets globally.
“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,” French added.
Deliveroo partners are currently able to make use of limited advertising services, with sponsored positioning for restaurant and grocery partners. The new advertising platform is more focused towards “consumer fmcg brands” Deliveroo said.
Deliveroo aims to reach an adjusted EBITDA margin (as a percentage of gross transactional volume) of more than 4% by 2026, with further upside potential beyond 2026. The company said advertising revenue is “an important lever to drive Deliveroo’s path to profitability and free cashflow generation”.
Several supermarkets have made major moves into advertising, launching their own media platform in recent years to tap a rich new revenue stream.
While typical retailer margin on food and drink products averages at less than 5%, margins can be as high as 80% on media advertising, according to Boston Consulting Group. Goldman Sachs forecasts the UK grocery retail media market value to reach £2bn by 2024.
In April rapid grocer Zapp joined the trend with the launch of Zapp Media Services, offering a “full-service advertising platform” that includes campaign planning, creative development and execution.
Deliveroo said all advertising would be “done in a way that is mindful of the consumer experience, which is Deliveroo’s priority”.
“Consumers will continue to receive a food-first experience in-app and Deliveroo intends to provide more space to enable restaurant and grocery partners to tell their story emotionally and effectively to Deliveroo consumers via the platform. The advertising solutions will sit within this context,” the company said.