Grubhub's Latest Ad Play: A Band-Aid for Deeper Strategic Failures?

Grubhub’s recent announcement that it will open up its checkout pages to targeted advertising through a partnership with Rokt is a telling sign of the times. Faced with an increasingly competitive landscape, the food delivery platform is trying to leverage its vast user base to generate new revenue streams. However, while this retail media network (RMN) strategy might sound promising on paper, it may be more of a desperate attempt to patch deeper problems rather than a comprehensive solution for long-term survival.

The RMN Play: Desperation or Innovation?

Let’s be clear: Retail media networks have become the hot trend for digital platforms looking to monetize their traffic, and for good reason. By leveraging highly trafficked digital real estate, companies can offer valuable ad space to brands, especially those eager to reach consumers at the peak of their shopping journey. Grubhub’s decision to introduce ads on its order confirmation and tracking pages taps into this potential.

But for Grubhub, this feels like a reactive move—a scramble to drive incremental revenue in the face of broader strategic missteps. The decision to allow non-endemic advertisers (those not connected to the core food delivery business) suggests that the company is grasping for any revenue opportunity, regardless of whether it aligns with its core mission of food delivery and convenience. Will this flood of external advertising dilute Grubhub’s brand identity and consumer trust? Quite possibly.

There’s also the question of whether Grubhub customers even want this. Consumers turn to food delivery apps for speed and convenience, not to be bombarded with irrelevant promotions after placing an order. A poorly executed ad experience risks alienating an already fragile customer base.

A Troubling Context: Laying Off Staff, Losing Market Share

Let’s not forget the broader context in which this move comes. Grubhub and its Canadian subsidiary, SkipTheDishes, have been struggling. SkipTheDishes recently laid off 100 Canadian employees, a clear signal that the business is under significant financial pressure. The food delivery giant, once a leader in the U.S. market, has been rapidly losing ground to competitors like DoorDash and Uber Eats, both of which have been far more aggressive in expanding their offerings and services.

Unlike Grubhub, these competitors have successfully branched out beyond food delivery, entering markets like grocery, convenience, and even alcohol delivery. DoorDash, in particular, has shown an uncanny ability to create new revenue streams that align directly with their core logistics business. In contrast, Grubhub has largely stayed within the confines of traditional restaurant delivery, a vertical that is increasingly saturated and highly competitive.

Introducing ads at checkout won’t change the fact that Grubhub has been late to adapt to changing market dynamics. While DoorDash and Uber Eats have aggressively pursued new service verticals, Grubhub has failed to innovate in ways that meaningfully expand its market share. The RMN strategy might generate some incremental revenue, but it’s far from a game-changer.

The Risk of Alienating Customers

The introduction of endemic and non-endemic ads on Grubhub’s platform could also backfire if not handled carefully. The order confirmation and tracking pages are critical moments in the customer journey—moments where consumers expect a smooth, frictionless experience. Ads, especially those unrelated to the food they’ve just ordered, could come across as intrusive and disruptive.

More concerning, this ad-driven approach could undermine Grubhub's brand value. As Grubhub increasingly turns to advertising as a lifeline, the platform risks transforming from a trusted food delivery service into a cluttered marketing channel. At a time when consumers are becoming more selective about the apps they use and the experiences they engage with, Grubhub can’t afford to risk customer trust.

A Short-Term Fix for Long-Term Problems

Grubhub’s RMN strategy, while potentially lucrative in the short term, does little to address the fundamental problems the company faces. With its competitors aggressively innovating and expanding their service offerings, Grubhub is left playing catch-up—and this ad initiative feels like an attempt to compensate for years of missed opportunities.

The bottom line is that Grubhub needs more than just an RMN strategy to regain its footing. It needs a holistic transformation that involves not just monetizing existing users, but also expanding into new verticals and improving the core customer experience. The company’s recent product updates—such as cross-sell recommendations, priority delivery, and homepage personalization—are steps in the right direction, but they are incremental improvements, not the bold innovations needed to reclaim its market share.

Conclusion: Grubhub Needs More Than Ads

In the end, Grubhub’s latest push into retail media advertising through its partnership with Rokt feels more like a short-term revenue band-aid than a genuine strategic pivot. Yes, it may generate some additional income, but it won’t solve the bigger issue: Grubhub is falling behind in a rapidly evolving market. To truly compete with the likes of DoorDash and Uber Eats, Grubhub needs to think beyond advertising and invest in innovation that aligns with its core strengths in food delivery and customer convenience.

Retail media networks can only go so far. What Grubhub truly needs is a comprehensive rethinking of its business model if it hopes to thrive in the long term. Otherwise, this ad play will merely serve as a temporary fix for much larger problems.