The following was previously published in an earlier edition of D2C Insider.
Rising grocery prices have given Ibotta, the decade-old savings platform, a new way to look at marketing. The Denver-based company has been rebalancing its brand-versus-demand budgets, hoping to build more awareness of how it can save consumers money. (It put $207.2 million back into people's pockets last year.) Rich Donahue, chief marketing officer, tells D2C Insider what's changing.
D2C Insider: First, give us a brief description of Ibotta.
Rich Donahue: We're a cashback app, website and browser extension with the mission to make every purchase rewarding. We're focused on cutting the consumer in on the deal and getting people cash back when they shop -- for groceries, household goods, clothing or travel. It's pretty timely, given the macro environment, with grocery costs skyrocketing.
D2C Insider: Can you explain the business model?
Donahue: We partner with brands and retailers. Whenever a saver, which is what we call our customers, walks into a store and picks up that bottle of soda or package of cheese, the brand we're working with will pay us a fee to facilitate that purchase. They get charged a fee-per-unit, or a percentage of basket. They pay for the user reward as they would with any other incentive. And we cut the consumer in on the deal. Everybody wins: Ibotta gets great inventory for our savers, the savers get cash back, and brands get introduced to new shoppers.
D2C Insider: You've got new ads, with money flying out of peoples' freezers and whatnot. What's the goal?
Donahue: It's an extension of a campaign we started last year, working with Callen, out of Austin.
We have long had a performance marketing focus with digital -- we wanted to know the return on every dollar. But as the landscape shifted after COVID, people started looking for opportunities to save. We wanted to make sure we were explaining to people that there is something that will allow you to beat inflation.
We understand the challenges people are up against. People are trading out of categories entirely. They're switching stores. The whole shopping landscape is challenging. Ibotta helps lower bills and moderate their spending, so they don't have to skip out on buying breakfast.
D2C Insider: How has your marketing budget changed?
Donahue: We've shifted from 90% of the budget for performance to probably closer to a little over half these days. We are getting more focused on traditional brand channels, just trying to get our message out and grow the top of the funnel. We're trying to tell a holistic story and hopefully make those performance dollars work harder.
D2C Insider: Who is your core demographic?
Donahue: The core is a millennial mom with a couple of kids in the house and a primary shopper. They're figuring out exactly what they're going to put on the table. They're not wealthy, in that $50,000 to $60,000 range. It goes up to those over $100,000, too, and extends down to people who need to squeeze every penny of their budget. Our users are 70% women.
D2C Insider: It's startling how many people say they've cut back on meals and food spending.
Donahue: Yes. On the first Thanksgiving of the pandemic, we launched our "Here to Help" campaign, partnering with brands like Butterball and Coke. We offered a free Thanksgiving meal through the app, taking the lion's share of our ad budget and turning it into free Thanksgiving meals. The goodwill and the positive sentiment that we got were amazing. And we converted people who had never heard about us into Ibotta users. It's a way we can do well by doing good.
D2C Insider: So, despite the new brand campaign, you're steering away from big brand ad buys?
Donahue: Yes. We'd rather put tens of millions of dollars back in people's pockets than invest it in a 30-second spot on the Super Bowl. We think our creative's great, but it's not about any of that. It's just about our priorities.
D2C Insider: How do you describe the brand's personality?
Donahue: We want to be playful, but we don't go too far. We're trusted advisors. While we're not a bank, we're talking to people about their money, so you have to be somewhat serious. We want them to know we're in their corner.
D2C Insider: How many monthly active users do you have now?
Donahue: It depends on the month. If it's Thanksgiving and people want free birds, it rises to 10 million. In the slower months, it's closer to six or seven million.The following was previously published in an earlier edition of D2C Insider.