How does advertising on food delivery platforms work?

It was just another day, when I was casually going through Swiggy, searching for my favorite snack. While on it, I came across a restaurant collection, and Swiggy showed that it was a restaurant ad, by putting up ‘AD’ on top of it. The image is attached below. Check the first & the last restaurant.

This led me to wonder all about advertising on food delivery apps like Swiggy, Zomato and more. An ad on Zomato is also shown below.

We all are aware of the different advertising opportunities businesses use, be it search ads on Google/Bing, or social media ads on Zuckerberg’s numerous platforms. But are we aware of the fact, that companies like Zomato & Swiggy – whose business model is based on the sole fact to cater to the cravings of their audiences – also provide advertising opportunities for their customers – the restaurants on their platforms?

Restaurants & kitchens don’t just have options to list their places & their menu, they can also put in paid advertisements for better clicks, visibility & revenue. Here, I will list out the various details about how they advertise on these platforms. Since Zomato & Swiggy are two of the biggest, I’ll be taking these two to give an idea about how this works.

Now imagine Zomato & Swiggy to be search engines. But the data they have is for the restaurants & dining places, & the customer here only searches for them. So, consider them as a very focused Google, but of dine-in places, bars & delivery outlets.

For restaurants who list themselves on these platforms, they have two options:

  • Go for advertisements – which would help in demographic targeting, and an increased & a refined visibility, thus leading to more clicks, visits, buy ins & sales.
  • Go for organic searches on the platforms – This is the normal search which a customer does on the platform, and the results which they receive organically.

As a restaurant, you would obviously want to be listed first before others, as happens in the case of search engines. So, if you do put up your ad on Zomato/Swiggy, your place is surely going to be listed first.

And what do you have to do? Just pay for every customer who visits your menu, surfs your place, or buys from you (conversions).

Zomato

Ads on Zomato roughly bring in 8x returns, for every amount spent on their platform. Zomato has 12000 restaurants advertising on its platform, having 1.4 million restaurant listings & spreading out to 3200+ cities across the globe. Ads bring in more than 90 billion of monthly visits, as per Zomato.

The Benefits?

  • Increased page visits through clicks – driving in more customers & in turn, more revenue.
  • Relevant audience targeting, with the relevancy added due to the time & location factor, & targeted hyperlocal advertising.
  • Zomato also provides analytics platforms to restaurants to track their ad campaigns, & their performances.
  • Call Tracking & Recording options for restaurants – to get to know the voice of customers.

The Ad Options?

  • Dynamic Search Ads
  • Video Ads
  • Category & Zomato Collections Ads: Placing an ad on Collections means that your restaurant is already under that particular collection, & when you put an ad over there, your restaurant would be brought in the beginning for customers to have a look.
  • Banner Ads: Personalized banners on their web & mobile discovery platform. Types include Banner Website, Banner Collections etc.

Zomato also gives options of where to place the ad, be it on the homepage or somewhere else.

Zomato goes by a Pay-per-Click (CPC) model, where restaurants pay them for every click made on their ad. But it also takes ads for a fixed price, or based on the number of impressions (CPM).

Generally, Zomato charges somewhere in the range of INR 40-50 per click.

Swiggy

Swiggy Advertisements go by the name of Swiggy Spotlight – a good way to make brands on their platform feel that the ad spotlights their restaurant on Swiggy. They have been designed to bring in returns of upto 2.5x on the investments – though much less than what Zomato promises, still a nice way to increase your channel revenues.

The Benefits?

  • Swiggy also gives relevant audience targeting by providing advertising options at the time, position & duration of your choice, based on your budget.
  • With the Pay-per-Click model, Swiggy gives you a better budgeting control & lets you draw a price based on your own budget.
  • They offer the industry best pricing options. This is in stark contrast to Zomato which has pricing higher than Google & other search engine options.
  • Your Swiggy ad won’t clash with your brand’s organic visibility on Swiggy. Means, Swiggy will only show your ad when your organic rank is lower than the high priority slot.

The Ad Options?

  • Banner Ads: Can also be placed in the order tracking section, which comes when a user places an order & wants to track it. These ads support third-party tracking, & are in a carousel format.
  • Carousel Ads: Can be put up in Swiggy homepage. By clicking on the banner present in the carousel, the users will be directed to a list of curated restaurants, based on the theme.
  • Video Ads: Ads on all the pages, played when the user loads the page.

Swiggy exclusively has a Pay-per-click model, where the brand pays only when a customer clicks on the ad to visit their menu, giving better budget control, & easier measurement of campaign efficiency.

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