What you need to know:

• Marley Spoon started selling product spots in its weekly dinner boxes without hiring anyone new to manage it.
• The firm, which has partnerships in place with Woolworths, now make three times what it spends to manage the service in profit.
• Marley Spoon CMO Kate Whitney says she asked a grad to manage it, and it’s paid off in spades: “It’s purely incremental revenue”.
• Brandcrush, the platform Marley Spoon uses to manage the inventory, claims it can create an army of retailer media operators overnight - from big chains to small firms.
• Marley Spoon's revenue from Brandcrush is 17x what the platform costs to run.  

Meal kit company Marley Spoon started a media activation business in 2020, asked a graduate to manage it, and now makes three times its investment as added profit.

The move into media is part of a broader market trend. Major retailers are actively exploring how to make money from selling media to suppliers, with experts estimating retailers will take $1 billion from the Australian media market by 2025. Woolworths, which yesterday divested its roughly 10 per cent stake in Marley Spoon, though retains multiyear partnerships with the firm, is leading the pack, wooing FMCG advertisers to part with trade and marketing budgets and now also buying ads for brands across external media channels.

But smaller retailers and other businesses also spy opportunity. In mid-2020, Marley Spoon started working with brand activation platform Brandcrush, a plug-and-play service that aims to give SMEs and big businesses other revenue streams by making any “touchpoints” bookable media spaces.

At the time, Marley Spoon’s Chief Marketing and Growth Officer Kate Whitney had only been in the role a few months – she returned from New York after working with Pernod Ricard in February, a month before the first Covid lockdowns. 

Marley Spoon started using the platform, selling exclusive access to its meal boxes – without hiring anyone to manage it. The company now adds extra products to tens of thousands of meal boxes through up-market Marley Spoon and more affordable Dinnerly brands.

“I sort of cheated a bit, because I gave it to the graduate,” Whitney said. “Marley Spoon is philosophically a very lean, hungry, scrappy organisation. We’re in start-up mode perpetually.”

The move into media and product activations came after the Sydney Royal Easter Show was cancelled in 2020. Whitney, a former Foxtel marketer, said she had seen how successful a stand and free samples could be. “I thought to myself, there are a lot of people with a lot of samples that were going to the Easter Show. We should get them to put them in our boxes and we could make a lot of money out of this,” she said.

The graduate

Traditionally, graduates working at Marley Spoon start by spending six months in marketing and six months in finance. As the organisation is highly performance-led, Whitney felt grads in the marketing round would get “deep into the weeds” of acquisition and performance media – but would miss the bigger picture of the broader business.

“This way, the grad learns so much about the business in six months. They have to do everything from brand fit to revenue generation, then over to the [operations] side to do quality and safety testing. Then they have to do production and reporting. It was a really good way of getting someone quite junior and giving them something to own,” she said.

“The grad fields the request and then organises the administration of something activating in the box – but it touches 12 people. It’s 12 people’s jobs to get one muesli bar in our box, and it’s actually quite complicated… we want to surprise and delight the customer, and this gives them a smile when they open the box.

“And that’s what keeps propelling us forward. We get such great feedback from customers when they open their box and there's a huge block of Darrell Lea chocolate or Starbucks coffee.”

Uncle Tobys and muesli bars were some of the first products in the box, but Marley Spoon now rejects some sample offers, for either logistical – cold food doesn’t necessarily travel well – or brand reasons. They only allow one category in the box at a time - one muesli bar, for example. It’s a rigorous testing process to include a product in their box, but there is a payoff: returns are roughly three times what it costs to go through the process. The revenue from Brandcrush itself is 17 times what the platform costs to implement. 

“It’s purely incremental revenue… it's well worth our while to have that program in place,” she said.

“And I don’t have other ways to find that revenue these days, short of growing my customer base or decreasing my advertising costs, which is a very far away dream right now.” Digital ad prices have been rising globally, as more businesses spend on digital platforms in the global pandemic.

Marley Spoon has been growing at 40 per cent per year globally, about 30 per cent in Australia, Whitney said. 

All businesses have media for sale

The global owned media market is growing each year and is now worth $190 billion, according to Brandcrush’s co-founder and CEO Teresa Aprile. “Rather than filling Facebook’s pockets, you’re actually filling the pockets of the individual businesses who are able to monetise their reach,” she said.

While Woolworths may suggest otherwise, Aprile claims its platform can create instant retailer media operations for rivals.

“We built a technology platform where Coles could overnight have a Cartology," said Aprile. "With IGA, Romeos, and all of those retailers, the challenge with media is how do you coordinate it? It’s all high touch. Every single touch point is a bookable media opportunity.”

There are 1,000 businesses on Brandcrush at the moment, but Aprile is taking a leaf out of Facebook and Google's playbook in aiming to scoop up advertising krill, targeting cafes, small retailers and gyms. She said one gym chain sells access to the literal shirts on the trainers’ backs.

“Our platform can go right down to the individual store, right down to the individual category within that store and helps to manage that media end to end,” she said. “So it can be used by the big guys or by an individual cafe.”

The company works with WeWork, HelloFresh, Monash University and brands like Mondelez, Kraft and Nestle.

Interested in retailer media? Download Mi3's special report below.