Opinion: Just Eat thinks long-term and doubles its marketing spend
By James Delves, CIM's Head of PR and Engagement
In the latest issue of our member magazine Catalyst, we debated the need for brands to build for the long-term during the current pandemic. We examined the views of senior figures from across the marketing sector including Raja Rajamannar, CMO of Mastercard, who warned against short-termism saying, “if your reaction to an emergency or crisis is knee-jerk, and is not consistent with your principles, values and long-term strategic direction – you will have a lot of damage to be undone later.”
Put simply, any short-term action should be part of a long-term plan. Your short-term tactics might change to meet a particular demand, but your marketing strategy must remain the same or you risk alienating the employees and customers who bought into your ethos in the first place.
A survey into CIM’s membership found that, despite all the commercial challenges, 60% of our members understood the danger of short termism.
Last week, Just Eat announced its latest financial results – one thing that stood out was the commitment to marketing and the brands long term plan. The brand increased its marketing investment by 158% to £316m, to drive market share and boost long-term profits.
Yes, the company did reduce its marketing spend during the peak of the current pandemic (reducing outdoor advertising) but during the second half of 2020, the company increased spend across both brand and performance marketing.
The results of this flexible long-term plan and a product that supported consumers during the multiple lockdowns was 179 million orders across the UK (up 35% of the previous year) and revenues rising by 44% to £621m.
Commenting on the results and strategy, Chartered Institute of Marketing chief executive, Chris Daly, said: “Just Eat has been one of few brands able to capitalise on a year of on and off coronavirus restrictions, as many people, unable to go restaurants or the local pub, turned to takeaways. Fast growing revenues have allowed the market leading takeaway delivery firm to invest heavily in logistics and marketing which have, in turn, enabled it to reach more customers in their homes than ever before.
"This year it updated its catchy jingle with a new advertising campaign, partnering with rapper Snoop Dogg in a way that captured the mood of the nation perfectly. Just Eat provided some much-needed fun during a time of crisis as well as delivering on the brand’s message that it isn’t just a convenient weekend treat, instead it provides food for every occasion through its huge variety of restaurant partners.
"Although today Just Eat is making a loss, the growth in orders that have resulted from its bold marketing approach suggest it’s set for long term success that will only be helped by its new partnerships with major brands such as McDonalds, KFC and Greggs.”
Since this article went live, Confused.com and Nationwide have also announced positive results based on long-term marketing planning.
To read more about Just Eat’s marketing activities and CIM’s opinions on long vs. short term marketing planning, please feel free to read the following articles:
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