Uber Eats launched a new paid advertising platform today that claims to be “helping restaurants reach more customers,” according to a company blog post. Thing is, it doesn’t seem like it will be all that helpful for the bulk of independent restaurants. And it may in fact be the opposite, at least for the ones who do delivery with Uber Eats.
Here are the basics: Through the new service, simply dubbed Sponsored Listings, Uber Eats restaurant clients can pay to have their business name appear at the top of the app in relevant user searches. Restaurants can set up a Sponsored campaign through their Uber Eats dashboard, designating the intended audience (e.g., “new customers”) and a weekly budget spend. Restaurants pay an amount each time a customer clicks on their ad. (It varies from one restaurant to the next.) They can also start and stop their campaigns any time.
Uber Eats says that the program is available to both chain restaurants and independents. Which leads us back to the debate around whether or not this new service will be of any actual value to most restaurants.
We’re at a time in the history of the restaurant biz when paying for advertising is not top priority for the majority of businesses — many of whom are struggling to even keep the lights on. With paper-thin margins made even thinner by the shutdowns and reduced capacity mandates, pay-per-click advertising, even if it’s just $50 per week, is not always possible. Independent restaurants already typically pay more than chains in commission fees on Uber Eats.
At the same time, many chain restaurants, especially major QSRs, have managed to weather the pandemic (and even thrive during it), thanks largely to their built-in to-go formats. It’s safe to argue these restaurants could swing that $50 per week for paid advertising.
Looking at those two scenarios together, it seems like Uber Eats has created a situation in which smaller, independent restaurants will get pushed further and further down in listings because they can’t pay, making it difficult for customers to discover them and translating into lower sales overall for the business. It adds color to the nightmare I frequently have of living in a world where my only restaurant options are Panda Express and Chipotle.
Uber is at least acting cognizant of this. Along with today’s announcement about the Sponsored Listings launch, the company also said it will put $25 million towards “marketing credits” to “qualified US restaurants.” It made no mention of what qualifies a restaurant for the credits or now much credit a business can reasonably expect to get.
Of course, paying for better visibility is a basic business practice, and Uber Eats is hardly the first online service to run sponsored listings. (Been to Amazon lately?) This morning’s news just might have been a little more digestible if Eats had stuck to the basic facts. Instead, it’s positioned Sponsored Listings as a way of being helpful to businesses when the service will in all likelihood further drive a wedge between the haves and have nots of the restaurant biz.