Case Study: Measuring DoorDash’s Instagram Ad Effectiveness in a Post-Cookiepocolypse World

The coming “cookiepocolypse” will seriously jeopardize advertising effectiveness measurement because unique identification of individuals will be thwarted by privacy controls that are already, or will be, built into most browsers and operating systems. Even Facebook is sunsetting its A/B testing solutions in response to iOS 14’s restrictions!
No-one will be able to share identity between third parties; and if they try, concerted efforts by Google, Apple, and Mozilla (to name just the key actors) will close it down.

What are advertisers to do? One solution is to test on first-party groups where measurement is possible at scale. Most notable are panels: where GDPA/CCPA compliance is built-in, and inter-domain and inter-app unique individual identification is both possible and ethically okay.

Embee has such a panel, one that is fully opted-in and GDPR/CCPA compliant, and that allows the current and retrospective tracking of customer journeys, and is the largest mobile panel in the US. Advertisers can match by advertising ID to assign panelists into A/B groups, create holdouts, and the desired outcome can be measured in many ways, including presence at a point of interest, checkout in the Amazon app, or on a web page.

How Embee Measured Instagram Ad Effectiveness

Behavioral measurement on devices includes many touchpoints, including ads on Instagram and other ad platforms and publishers, app usage, domains, and locations.

To measure the effectiveness of DoorDash’s advertising on the Instagram advertising network, Embee utilized its data about Feed Ads and Story Ads by DoorDash from the over 38K US panelists who used Instagram in the first quarter of 2021.

While advertising is designed to acquire new users, it is more often designed to encourage existing customers to use the app. This is especially true in the case of ‘pay-per-use’ apps (such as DoorDash) where the act of installing an app is useful, but actual revenue is earned when the app is used.

To this end, Embee considered the effectiveness of DoorDash’s advertising on the Instagram network by assessing whether the user used DoorDash within 600 seconds (10 minutes) of seeing a DoorDash ad in their feed or storyline.

DoorDash’s Instagram Ad Effectiveness: By the Numbers

Overall, Embee’s panel includes more than 100,000 US adults. For this study, we examined Instagram and DoorDash app usage ranging from January through March 2021. Here is the specific breakdown of Instagram users who saw DoorDash’s ads while using the social media platform, drilling down into the effectiveness of DoorDash’s advertising efforts on the platform.

  • 38,307 of the panelists used Instagram
  • 14,381 of the panelists used DoorDash
  • 4,835 panelists saw a DoorDash ad on Instagram. That’s 12.6% of all Instagram users in the panel. A total of 26,288 DoorDash impressions were logged, meaning the average Instagram user who saw DoorDash ads was exposed 5.4 times during this time.
  • Of the 4,835 panelists who saw a DoorDash ad, 1,466 used DoorDash. That means 30.3% of DoorDash’s inventory was served to customers who use DoorDash, and 69.7% was directed at non-users.
  • Of the 1,466 panelists who both use DoorDash, and saw a DoorDash ad, 59 used DoorDash within 10 minutes of seeing the ad. This means that just over 4.0% of DoorDash users who saw the feed or story ad, reacted to the ad within 10 minutes at least once in the quarter.
  • With an average order size of $37.28, and an assumed 10% revenue cut ($3.72), these 59 incremental orders are worth $219.48 to DoorDash. DoorDash breaks even if they pay less than $8.34 CPM to Instagram.
  • Since Instagram Ad CPMs typically cost between $2.50 and $3.50, DoorDash is likely seeing a 2-4x ROI from its Instagram advertising efforts.

Where are DoorDash’s Ads Landing?

Based on Embee’s study, it looks as though DoorDash’s Instagram ads are preferentially targeting young males, with a less pronounced skew to Black and student populations. There is a slight skew away from the Western census region, and practically no skew by income.

Age and Gender: Males are more likely to see DoorDash ads, despite the fact that DoorDash users strongly skew female. 64% (unweighted) of DoorDash users in Embee’s panel are female, and 57% (unweighted) of Instagram users in our panel are female. However, 54% (unweighted) of panelists who saw DoorDash ads were male.

It’s not surprising that younger people are more likely to be targeted by DoorDash. Just 5% of Instagram users over the age of 55 received DoorDash ads, compared to 22% of 18-24-year-old users.

exposure rates by age and gender

Race and Ethnicity: There is some slight racial targeting of DoorDash ads. 17% of Black Instagram users were exposed to an ad, compared to only 11% of white Instagram users. However, this may reflect the urban target market for having take-out delivered.

exposure by race and ethnicity

Household Income: there was almost no distinction between the targeting of DoorDash ads to Instagram users by household income.

exposure by household income

Census Region: despite there being no regional variation in DoorDash users by census region, 1Q21 appeared to be a time when DoorDash was focusing attention on the Northeastern and Midwestern regions.

exposure by census region

Who Reacted to DoorDash’s Ads?

While the objective of ads in feeds can range from installing an app, to encouraging usage through to raising brand awareness, this analysis is focused on encouraging usage. We make the assumption that if someone has used DoorDash within 600 seconds (10 minutes) immediately following seeing an ad, we are considering that the user was encouraged to make a purchase.

This assumption may under-record encouragement if a user instructs someone else to order from DoorDash, or if they use a device other than their mobile phone to order. Over-recording may factor in if someone uses DoorDash for an unrelated reason or if the user was going to use DoorDash anyway, and the Instagram ad was a pure coincidence of timing. We suggest that these two factors are likely balanced and that the actual number of uses within 10 minutes is a fair reflection of users nudged to make an incremental DoorDash order.

Age and Gender: 4.0% of both males and females reacted to the ad by starting an order, but there was a clear difference between the reactions of the younger panelists who were exposed. 5.8% of younger, exposed panelists responded to the Instagram ad. In fact, more than half of all people who responded to the ad were aged 18-24. No-one over 55 was recorded reacting to the ad (but this was only a group of 35 people exposed who also had used DoorDash).

reaction rates by age and gender

Race and Ethnicity: Black Instagram users, Instagram users of mixed origin, and Instagram users of native heritage were more likely to react to the ad than others, though there was no discernible difference between the reactions of Hispanics to non-Hispanics users.

reaction rates by ethnicity and race

Household Income: wealthier households were more considerably more likely to react to the feed ad: 7.3% of DoorDash users who’d seen an ad with household income between $100k and $150k reacted and started an order.

reaction rates by household income

Census Region: despite the high amount of exposures in the Northeast region, the reaction rate to the ad in the Northeast was very low. Of 292 Northeasterners recorded as being DoorDash users and exposed to the Instagram ad, only 5 reacted to the ad by starting an order. Meanwhile, the Southern region was the most likely to react by making an order, being 60% more likely to react to the ad than the US as a whole.

reaction rates by census region

In closing, the coming “cookiepocolypse” may initially throw advertisers for a loop, but this study, using Embee’s fully opted-in and GDPR/CCPA compliant panel, demonstrates that there’s a working solution.