The Gluten-Free, Keto-Friendly, Cutthroat World Of Meal Delivery Advertising

Direct to consumer ecommerce is big money these days. We all know this.

What some of you may not know is, DTC with a recurring revenue component is even bigger money.

As tulip-mania for early and mid-stage software startups among PE & VC firms wanes, investors are looking to put their money into ecommerce.

See – the billion dollar acquisition of harry’s razors.

See – dollar shave club’s 1 BN acquisition. Or the tuft and needle merger

See: https://techcrunch.com/2019/01/09/the-state-of-seed/

See: https://bothsidesofthetable.com/why-has-seed-investing-declined-and-what-does-this-mean-for-the-future-6a9572357130

And for PE/VC firms that are looking to turn a huge profit on their acquisition of a DTC brand, recurring revenue is king.

As in business with recurring revenue get valued at 2-10x higher than those without.

Enter – meal delivery services

A LOVE LETTER TO HELLOFRESH, BLUE APRON AND SNAPKITCHEN

One faithful day a year and a half ago I decided I was going to clean up my act. That’s right – I was going to eat clean.

But like a true American , I’d be lazy about it.

And shortly after I posted asking for recommendations on meal delivery, BOOM, my feed was finally-free of the get-rich-quick-guru-info-spam-courses that had flooded it for the past year. (thank fucking god)

Over the next 3 months I became intimately familiar with the 4 heavyweight players in the space.

THE CONTENDERS

Hellofresh – publicly traded with a billion dollar market cap.

Plated – acquired by for 200M by Albertsons after 56.4M in Funding.

Snap Kitchen – 154.2M in funding from 4 rounds.

Blue apron – publicly traded with an 87.92M market cap

4 YEARS LATER – ECOMM & RETAIL STILL HASN’T CAUGHT UP TO MOBILE GAMING

Four years ago I had my first introduction to mobile gaming advertising, and it was a bit of a revelation.

The budgets ranged from 10k/day to 100k/day. And more shocking than that was:

None of these advertisers looked at CPI or day 0 roas as their KPIs.

No, they looked at day 3, day 7, day 30, day 60 and day 90 roas, and realistically knew the return of a single install in a single market from a single ad all the way out to 180 days post acquisition.

And didn’t realistically expect to break even on new installs until 60 days later.

Because they understood one simple truth that the retail industry has still failed to grasp – he who can acquire the most customers – wins

And he who can acquire the most customers and project our yield months later accurately, makes the most profit.

Venture investors realized this early on, pouring money into mobile gaming advertising, because who could beat the 200% or 300% or 1000% yield some advertisers were seeing over a year or two years with mobile games?

Highly evolved industries produce highly evolved ads and funnels and we could all learn a thing or two from mobile games,

And from MEAL DELIVERY

WHY YOU SHOULD TREAT YOUR ECOMM BUSINESS LIKE A SOFTWARE BUSINESS

Let’s take at the 2 ton gorilla in the space – Hellofresh.

Truth 1: It’s often easier to scale your acquisition by adding geos & countries than adding audiences

If we take a peep at their ads library we notice the first similar to MAI advertisers:

Theyre truly global

https://www.facebook.com/ads/library/?active_status=active&ad_type=all&country=US&q=Hellofresh&view_all_page_id=320774061283785

Ads active in the UK, Netherlands, Germany Austria, Romania, Finland, Germany, as well as the US

Truth 2: Each geo converts differently, has a different culture and responds to different ad creative, all creatives need to be personalized to the specific geo

As you can see in the creatives below,

US ads:

https://media-exp1.licdn.com/dms/image/C4E12AQEWficiV1YCpg/article-inline_image-shrink_1000_1488/0?e=1600300800&v=beta&t=eMksb18Gcl-uFi1tvfQTrFkmfhm91w5TPED-imz3Fig

UK Ads

https://media-exp1.licdn.com/dms/image/C4E12AQF5UWfmEA6LPQ/article-inline_image-shrink_1000_1488/0?e=1600300800&v=beta&t=UQKe5EcIIOcMhloZYwGQEkQzLdTGaBbbopgBc18ydX8

Germany Ads

No alt text provided for this image

Not only are they running in language copy to native speakers, theyre running different ad images and videos in each geo, and they’re also running different deals in each geo as well.

People in different countries have different amounts of money – so they should get different discounts… this is a truth too.

OK fine – they get the personalization piece. They understand fb traffic in non-NA countries is much cheaper and most people are too lazy to run in language copy. They get promo pricing should be region specific too… what else?

Let’s take a look at one of their ad links

https://www.hellofresh.co.uk/pages/resolution?hf&utm_medium=cpc&utm_source=facebook&utm_campaign=UK_0_PC_PRO_BRO_WCV_DIS-PCT-50-2_CreativeTest-BoxDelivery_25062019&utm_term=BROAD_0_0_0_0_0_0_0_0_5Mio&utm_content=0_0_Image_LinkAd_4-5_Product_BoxDelivery_0_0_0_250619.jpg&utm_id=5d1230ac72be551c322279f9&c=FBBRO2X50

Just from this link – we know they have their tracking on point.

Not only are they passing back parameters for their creative, they’re passing back parameters for the ad type of the creative.

A little-known piece to creative testing on facebook is this – you don’t know what ad type is going to perform the best for an account! So you start there, narrowing in on the best ad type and then the best variations of that ad type.

And we also know from their term parameter that they’re targeting BROAD

As in, literally everyone in the united kingdom. Also known as run-of-network targeting, this is when you just upload an adset with no targeting set, 18+ MF, and let it rip.

Sorry US congress – microtargeting is about 3 years out of date. FB these days, you track enough conversions with the pixel, and they’ll just automatically find you new prospects. No. Targeting. Needed.

Ok Fine – so they have great tracking setup and great targeting (or lackthereof) , what else?

THEIR LANDER FREAKING ROCKS

Offer: 50% off your first two boxes.

Similar to b2b saas, give a bit away for free and get someone hooked. Know your CHURN numbers and have a solid ONBOARDING SEQUENCE (more on this later) and not only can you acquire more customers at a small loss to start, your returns +6 months out are that much higher because you can afford to acquire that many more customers to begin with…

Ok fine – so they understand that Day 0 ROAS is a bad metric, what else?

THEY UNDERSTAND THEIR VALUE PROP

No – the usp is not ‘get meals delivered to your door” it’s “making it easy to cook healthy dinners from scratch, and still get the enjoyment out of the cooking part’

And it’s also “avoid planning, and shopping”

Ok so the page headline is “Making is easy to cook great dinners from scratch”… what they also understand about copywriting and LPs is that:

The USP should be about your prospect, and all subsequent copy should be CLAIMS that promise A SUPPORTING BENEFIT OF THE USP which are then GUARANTEED BY A FEATURE

What makes a dinner great you may ask?

Well they’ll tell you:

·        Benefit 1 = Recipe boxes to suit your lifestyle. Guaranteed by feature 1: multiple box options for quick cooking, family meals or “classic

·        Benefit 2 = Great quality fresh ingredients Guaranteed by feature 2: perishables packed in special bag that keeps them chilled

Ok fine, they can’t do everything right can they?

WRONG

The page has a 1 to 1 attention ratio as well, which is low hanging fruit but you’d be surprised how few people pay attention (pun intended) to it.

Also known as the “buy or die” strategy, this is when a user either has to bounce from your page or go to the next stop in the funnel. Either click one of the many CTA buttons or leave. No footer links, no unnecessary header links or bullshit about us pages or FAQS, no. Just pure, juicy, sweet conversion.

What else do they understand then?

HOW TO WRITE A GREAT CALL TO ACTION

Scroll down on the page and read the copy under “No commitments”

It’s a masterwork of handling objections, assuaging fears and telling people what to expect.

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Direct Marketers have literally been doing this since the 1800s. If you read “The Robert Collier Letters” by Robert Collier (the marketing genius behind the original secret book)-

He has a chapter on how to write a proper call to action and says in as many words:

If you need your prospect to wipe their ass – tell them to open up their hand, insert toilet paper, tear off a square, reach around…

You get the picture. Not leaving anything to chance, assuming your prospect is always confused about how to convert and telling them exactly how to do it is a best practice.

OK – phew. This post is already long AF. I’ll be back with a part 2 on plated, snapkitchen and blue apron and

WHY TREATING YOUR ECOMM BUSINESS LIKE A SOFTWARE IS A GOOD FUCKING IDEA

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