How Much Should You Really Be Spending on Food Delivery App Marketing?

If you're in the food delivery business, figuring out the right marketing budget can feel like trying to hit a moving target. You have goals, you have a budget, and you want to make every dollar count.

But the truth is, there’s no one-size-fits-all answer to how much you should spend. It all depends on where your brand is in its lifecycle and how much brand equity you’ve built up.

Experts suggests setting budgets as a percentage of total revenue based on brand equity and position in the market.

Pierre Mobarak, Head of Growth at Revly says,

“With so much competition in the market, if you are launching a new brand, then you have to invest significantly in marketing up front and be prepared for longer payback periods. Often new brands won’t become profitable for 6+ months, at which point you can reassess spending levels.”

There is no rule book for setting delivery app marketing spend, however by following the process below you can easily build a framework for setting budgets on delivery apps, and use it is as the basis for solid decision making.

Using brand lifecycle as a framework to set budgets

Setting budgets appropriately requires an honest assessment of where a particular brand is in it's lifecycle.

Consumers have a different impression of delivery brands in the market. For people ordering, delivery brands that discount heavily become associated with offers and often require continuous offers in order to keep revenue up.

Ahmed Fadly, Growth Manager at Epik Foods has direct experience of this situation and recently pointed out at the FCC conference:

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A common pitfall that many brands face: the overuse of steep discounts, particularly the notorious 50% off. He pointed out that transitioning a brand from being associated with such deep discounts to a more standard discount model (around 15-25%) can severely impact revenue and order volume. This transition, he noted, is not immediate and can take between six to eight months to stabilize.

(from Linkedin)

On the other hand, brands that are new to the market have less brand equity and need to build awareness overtime if they want to start building a customer base and predictable revenue.

Being honest about your brand's position in the market is key.

With that in mind, use the below framework as a way to start thinking about setting budgets.

Established brands: spend smart and maintain your edge

If you're working with a brand that already has strong equity, you're in a good position. These are the brands that customers already know and trust.

Think of that well-loved local pizza place that people order from every weekend or the go-to lunch place for businesses needing to feed 20+ people every Friday.

For these brands, the marketing focus isn’t about heavy discounts or flashy promotions but about maintaining a consistent presence and optimising towards as much profit as possible.

Here brands don’t want to overspend on marketing and start cannibalising their free users with ads.

Discounts: 0-3%
These brands don’t rely heavily on discounts because they don’t need to. Their customers are loyal, and they understand the value they’re getting. So, discounts are minimal, used sparingly to keep things interesting, but not as a primary strategy.

Visibility (Ads): 3-8%
In terms of visibility, these brands focus on steady, consistent advertising. They’re not pushing aggressive campaigns; instead, they’re ensuring that their brand stays top-of-mind with regular, well-placed ads. It’s about being present in a way that feels natural and reinforces the brand’s established reputation.

Optimization: Regular, Focused Adjustments.

For these brands, optimization isn’t about constant testing; it’s about refining what’s already working. They keep an eye on the data, make necessary adjustments, and focus on efficiency. It’s a strategy of fine-tuning rather than overhauling.

New and emerging brands: invest to build your presence

If you’re with a brand that’s new to the market or still building its reputation, your approach needs to be different. You don’t have the luxury of relying on brand equity; you need to create it.

Discounts: 10-15%
At this stage, discounts play a crucial role in attracting new customers. Offering 10-15% off can be an effective way to bring people in and start building that customer base. It’s about creating an initial buzz and getting your name out there.

Visibility (Ads): 5-10%
Your ad spend will be similar to established brands, but your approach will be more dynamic. This is where A/B testing comes into play. You should be testing different ad creatives, messages, and platforms to see what resonates best with your audience. The goal is to find out what works and then scale up those efforts.

Optimization: Aggressive A/B Testing

Optimization at this stage means being willing to test and adapt quickly. You need to run multiple campaigns, analyze the results, and refine your approach constantly. It’s about finding that sweet spot where your marketing efforts start to gain traction.

3. Struggling brands: it’s time to go big

If your brand has little to no equity and is relatively unknown, you’re facing a tougher challenge. However, with a strategic approach, you can still carve out a place in the market.

Discounts: 10-20%
In this scenario, you’ll need to be more aggressive with your discounts. Offering 15-30% off might be necessary to entice customers to give your brand a try. It’s about breaking through the noise and giving people a reason to choose you over more established competitors.

Visibility (Ads): 5-15% Your ad spend will need to be higher as well, focusing on making your brand visible in as many places as possible. You need to create awareness and get on people’s radars, which means more ads across more platforms.

Optimization: Holistic and Intensive

For struggling brands, optimization needs to be comprehensive. It’s not just about tweaking ads; it’s about revisiting everything from your offers and pricing, to your menu and overall branding. Every aspect of your marketing strategy needs to be dialed in to maximize your chances of success.

Key take-a-way: set budgets based on your brand's lifecycle

So, what’s the big takeaway? Your marketing spend should be closely aligned with your brand’s current position in the market.

• For established brands: Focus on maintaining your presence and optimizing what’s already working.
• For new or emerging brands: Be prepared to invest more in discounts and testing to build your brand identity.
• For struggling brands: You’ll need to spend aggressively and optimize across the board to gain a foothold.

Marketing isn’t just about spending money—it’s about making smart investments that will drive growth. By understanding where your brand is and tailoring your approach accordingly, you can make your marketing dollars work harder for you.

The key is to spend with purpose, track your results, and adjust your strategy as you go.

In the fast-paced world of food delivery, speed and adaptability are crucial. Start testing, spending, and optimizing today to ensure your brand not only survives but thrives in this competitive market.