Just Eat: marketing is number one cost
Chief marketing officer at Just Eat, Barnaby Dawe, has said that the number one cost at the innovative food delivery company is marketing. And he thinks that’s the way it has to be for all growth-centric businesses. Speaking at the Advertising Week Europe, Dawe said the brand spends more on marketing than technology, and that this is key to its continual growth.
Over the last 12 months, Just Eat’s share price is up 53%
SOURCE: Yahoo Finance
Dawe said that, while the overall spending on marketing could rise, if it’s being used effectively, it should not rise as much as the company’s revenues: he is “trying to drive efficiencies” so that the “ratio of marketing spend to revenue gets lower as we get older – our marketing budgets might increase but they shouldn’t increase at the same rate as revenue.”
Of all the types of marketing spend that Dawe believes are hardest to track, TV comes out tops. Although he added that – when TV spots were used nationally – the company still sees growth from that spend.
The effectiveness of digital marketing spend, he believes, is far easier to measure. This is one of the reasons he is planning to double the company’s spending on Facebook this year. The social aspect of the platform lets Just Eat discuss its brand, and also “go right down to transaction” and shift people to conversion. It’s a powerful way for the business to engage directly with customers outside of the actual purchase and delivery points.
Other areas the company is planning to increase focus are virtual reality, artificial intelligence, and robotics. Just Eat believes that, in an already competitive landscape that is never short of new players, this will help it stay ahead of the curve. It also invests in “small startups in the food tech space” to help it “disrupt itself”. All of this, according to Dawe, plays into the way the brand has to evolve over time. He told listeners:
“A lot of digital-only businesses make the mistake of investing for the short-term and not building a brand story.” That is not a trap he plans to fall into.
Dominion holds Just Eat in its Global Trends Managed Fund.
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