SEOUL, Aug. 21 (Korea Bizwire) – The market leader of the food delivery service industry, Baedal Minjok, released a report citing operations data in an attempt to shutdown allegations that it was overcharging restaurants for advertising on its app.
A spokesperson said the reason for doing so was because “there are recurring complaints about our advertising fees being excessive from a select few customers. [The company] decided to tackle these mistaken allegations head-on by making public current information about advertisers and advertising fees that are industry secrets.”
The app announced that as of July, there were 180,000 restaurants registered, with 48,710 using a form of paid advertising.
Between the two type of advertising services offered to restaurants, the monthly service plan and the auction/bidding plan, 90 percent were monthly service plan users (43,000 users).
Each user paid a monthly average of 130,000 won and brought in a minimum of 4 million won in revenue. The calculated return on ad spend (ROAS) was 30.7 according to Baedal Minjok’s data.
Average monthly revenues were derived by dividing the total sum of all revenues of monthly service plan users by the number of users.
The remaining 10 percent of paying users were shown to be spending 750,000 won per month and bringing in 13,300,000 won (per month).
The auction/bidding plan entails restaurants bidding for the right to be ranked at the top of the list when customers log searches on the Baedal Minjok app.
To prevent a bidding war and the resulting prices from getting out of control, the food delivery company revealed that it allows bidders to anonymously submit “ideal winning bids”. Furthermore, the second highest bid is selected as the appropriate payment price.
Pointing out the success users were having, the spokesperson emphasized that “Baedal Minjok does the most with less, especially when considering the fact that advertising through flyers costs at least 700,000 won per month”.
Kevin Lee (firstname.lastname@example.org)