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Grubhub unlocks new growth for merchants with enhanced ads platform

Grubhub opportunity

Since 2004, Grubhub’s mission has been to help connect consumers to nearby merchants, while giving these merchants a platform to grow their businesses. Grubhub has done this through its Marketplace, a marketing platform that gives its 375,000+ merchant partners access to tens of millions of consumers across the country looking for takeout. Grubhub offers its merchant partners a range of marketing tools and services to help them reach their goals, and as merchants’ needs have evolved, so too have the tools and services it provides—most recently with the addition of Grubhub Ads, a new channel to help merchants drive sales.

Wanting to grow the services it offers to its merchant partners, Grubhub came to Koddi to launch a tool specifically designed to give merchants control over the frequency, location, and targeting of their ads. This allows merchants to reach more people at the earliest point in the decision-making process and add incremental value throughout the customer experience, leading to more sales.

“As we build out this ads program, the number one thing we’ve been focused on is adding value for our merchant partners, restaurants, and building it the right way to support them.”

Kyle Emmett, Senior Director of Advertising and Merchant Solutions

Challenge

Grubhub’s main goal was to enable merchants to increase their visibility on Grubhub through targeted, relevant advertising campaigns, helping them drive overall awareness and order volume. Their challenge was that they were limited in their ability to experiment and scale new placements and ad formats since Grubhub previously only offered per-order, commission-based marketing packages. While they didn’t want to build entirely from scratch, they still wanted full ownership of their offering. 

Grubhub needed a partner capable of adapting to their specific goals and requirements. With two different advertiser personas (large enterprises and small restaurants), they needed the ability to create custom workflows that met each advertiser’s need. 

Before partnering with Koddi, Grubhub struggled with merchant requests such as:

  • Increased organic reach: Merchants desired new and measurable ways to increase their visibility to potential customers. They wanted the capability to promote themselves during specific mealtimes and increase overall order volume.
  • Advertising tools: While merchants had access to various marketing tools offered by Grubhub, advertising tools — beyond those included in a merchant’s marketing package — were previously not available. This meant merchants were missing out on additional strategic levers they could pull to help them grow their sales.

Approach

Merchants can now increase their visibility while customers are at the search stage by setting up tailored campaigns on the Grubhub Ads platform. This means that if a customer is searching for a certain type of cuisine, an ad from that merchant running the campaign will show prominently in the search results. This self-service portal, powered by Koddi, allows merchants to:

  1. Launch tailored campaigns: Merchants can create customized or quick-start campaigns that align with their specific marketing goals. They can launch different ad experiences, such as sponsored ads, on different pages. Sponsored ads enable restaurants to boost the visibility of their organic listings on relevant homepage topics and search results pages. This provides the capability for merchants to reach customers as they browse, as well as high-intent customers who are searching based on cuisine or popular featured topics. 
  2. Analyze real-time analytics: The platform provides access to performance reports, enabling merchants to track and analyze campaign success. Merchants can view performance by time of day, day of week, and customer (Grubhub+ or non Grubhub+).
  3. Leverage automated optimization: Automated tools optimize campaigns for better performance, reducing the need for manual adjustments. 
  4. Measure incrementality: Through Koddi’s incrementality feature, Grubhub can continuously run tests to prove ROI to its merchant partners who are advertising. 
  5. Boost relevancy: Through Quality Scoring, an algorithm generated by both Koddi and Grubhub machine learning based on first-party data, advertisers can boost the relevancy of their ads, leading to higher click-through-rates. 

All of this can be done whether the advertiser is a merchant with no marketing experience, or a large enterprise brand desiring sophisticated targeting and automation.

Internally, Grubhub can launch and test new ad placements and formats dynamically, allowing them to iterate on and grow their ads program in a data-driven way. They have access to innovative targeting as well, from parameters like day parting, device type, order type, location, intent, cuisine, diner brand history, and custom audiences. And, they can see in real-time the performance of each targeting dimension, including custom targeting segments.

“We can [now] go back to merchants and restaurants and tell them, maybe you should invest more using multipliers during lunch. Or maybe, if it’s a coffee shop, you want to advertise late at night to get people pre-ordering coffee for the morning, because we’re seeing that those orders are converting better. That’s the type of insights we’re able to give to restaurants so that we’re adding value, not just driving revenue.”

Kyle Emmett, Senior Director of Advertising and Merchant Solutions

Implementation

Because Grubhub has both SMB and enterprise merchant partners, they needed a flexible setup that worked for both groups. With Koddi, Grubhub was able to launch a fully branded self-serve platform with granular campaign creation, targeting, and reporting features for enterprise-level advertisers. 

At the same time, Grubhub leveraged Koddi’s campaign APIs to integrate simple campaign creation within their merchant portal. Merchants can easily log into their existing platform and create sponsored listings in just a few clicks. As an added benefit, Koddi’s team was able to help Grubhub manage any supply and demand problems that arose, including quickly allowing advertisers to experiment running ads on different topic sections across Grubhub pages. 

“Now we have capabilities that [work] for both large enterprise brands running through media agencies and the mom-and-pop restaurant down the street. The Quality Scores are allowing them to get more clicks, and not just more clicks, but more revenue as well, which is why we’re seeing such healthy ROAS returns."

Kyle Emmett, Senior Director of Advertising and Merchant Solutions

Results

Tens of thousands of merchants have launched campaigns with Grubhub and boasted positive results. Through Grubhub, some enterprise brand merchants have seen, on average*:

  • 6x incremental ROAS
  • 13% incremental sales

By working with Koddi and leveraging their relevancy machine learning algorithms, Grubhub saw:

  • +20% CTR 
  • +6% revenue 

Next steps

The launch of the Grubhub Ads platform has allowed Grubhub to expand the marketing services and tools it offers its merchant partners. In the future, Grubhub hopes to launch expanded relevancy, new ad formats and targeting options for its merchants.

*Data compares average incremental sales and ROAS for nine large national brands during dates between September 2024 and January 2025. The foregoing statements are intended to serve as illustrative examples and are not guarantees of performance. Results may vary based on numerous factors. No representations or guarantees of performance are made herein.

“Grubhub Ads is just a year old, so we’re just getting started. Think more automation, more insights, smarter optimizations so we can incorporate real-time ordering behaviors and real-time merchant feedback. The goal here is to make Grubhub the key growth channel for every restaurant.”

Kyle Emmett, Senior Director of Advertising and Merchant Solutions

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