GrubHub is craving more customers—and has a TV strategy to get them

Not as seen on TV
Not as seen on TV
Image: Reuters/Lucas Jackson
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Quarterly profits have quintupled, shares are up, the number of active customers has increased 50% since September 2013—all is well in the land of GrubHub, the online food-ordering company adored by young investment bankers and art students alike.

But GrubHub is hungry for more. During a conference call with investors this morning, after announcing quite tasty financial results for the third quarter of 2014, CEO Matt Maloney and CFO Adam DeWitt said they will ramp up spending on marketing efforts this winter to convert a larger share of “the 95%” of people who order take-out food by calling restaurants directly.

Most of that spending will be on television commercials. “TV is a critical component of the strategy to address the 95% of the orders that aren’t online or mobile yet,” said Maloney, and national TV ads will be scripted “to emphasize the pain points” of traditional food delivery orders that rely on paper menus and phone calls.

Although Seamless, which merged with GrubHub in 2013, has been in New York City for 10 years, Maloney said that GrubHub has only 10% of the restaurant delivery market there—greater than the market share it’s captured in other major US cities, where “single digits” represent the fraction of delivery orders GrubHub takes.

GrubHub now has 4.57 million active diners, 50% more than at this time in 2013. And a full 50% of those diners are using their smartphones and tablets, not their laptops or desktops, to place their orders.

Comparisons between this quarter and the third quarter of 2013 are pro forma, since the GrubHub-Seamless merger took effect in August 2013.