Why Running Ads and Promos at the Same Time Is Killing Your Profitability

Delivery platform advertising and promotional discounting each make sense in isolation. Ads reach new customers who wouldn't have found you organically. Promos drive conversion and volume. The problem is that most operators run them simultaneously without segmenting who sees the ad and who gets the promo.

When the same customer gets both — a paid impression that brings them in, plus a discount that closes the sale — you're paying twice for the same order. According to Restaurant Business Online's investigation into delivery discounting, a 2024 Intouch Insight secret shopper study found that nearly 49% of all delivery orders had a discount attached — 65% on DoorDash and 55% on Uber Eats. Many of those discounted orders were also reached through paid placements.

The platforms have every incentive to encourage this behavior. They collect commission on every order, earn ad revenue regardless of your profitability, and benefit from the increased traffic that promotions generate. As CSP Daily News reports, industry analyst Meredith Sandland of Empower Delivery has pointed out directly: a customer who only responds to promotions “might not be a great consumer” — they may be complex to serve and not profitable to keep. The platforms are fine with that. You shouldn't be.

Research from marketing strategy sources consistently shows that when discounts become a default rather than an exception, you train customers to see full-price orders as a mistake. Once that pattern sets in, pulling back on promos causes immediate order volume drops — which then feel impossible to sustain without the discount. That's the trap.

The fix isn't to stop advertising or stop running promotions. It's to stop giving both to the same customer at the same time.

The right approach is customer segmentation — matching the right offer to the right customer type, based on their relationship to your restaurant:

• New customers: Ad + promo is acceptable. You're paying to acquire them, and the loss on this order is the cost of a new customer relationship. It only makes sense if you believe that customer will come back. Track whether they do.
• Returning customers: Promo only, no ad spend. They already know you. You don't need to pay to remind them you exist. A light promotional offer is enough to keep them active without the added ad cost.
• Loyal, frequent customers: No ad, no promo. These customers are your profit engine. Every dollar of ad spend or discount applied to a customer who was going to order anyway is pure waste.
• Lapsed customers: Ad + win-back promo. This is a recovery play, similar to new customer acquisition. The goal is re-engagement, and a targeted offer makes the investment rational.

According to DoorDash's own merchant education materials, a healthy customer acquisition strategy targets a 3:1 LTV to CAC ratio — meaning the lifetime revenue from a customer should be at least three times what you spent to acquire them.

This structure keeps your blended margin healthy because most of your order volume — the returning and loyal segments — carries no ad cost weight.

The metric to watch is promo dependency rate: the percentage of your total orders that include a promotional discount.

GoFoodService's promotions research cites Circana data showing that 29% of all commercial restaurant traffic in the past 12 months involved a deal — the highest rate in tracking history. That's an industry-wide average. If your promo dependency rate is significantly above that — say, 50–60% of your orders include a discount — you've likely fallen into the blanket-discount pattern and need to segment your campaigns immediately.

Keep exploring practical ways to improve delivery platform performance, margin, and visibility.