Restaurants at Ransom: How Third Party Platforms Hijack Your Brand
Do you use third party platforms such as Dimmi, OpenTable, Uber Eats or Australian Good Food Guide to help promote your restaurant?
You probably do it to increase your business’s exposure. To get your brand in front of more faces, more bookings, more orders, or more positive reviews. You figure that, if you’re not listed on these sites or apps, you could be missing customers. So despite the questionable fees and commissions, you decide to partner up.
What you might not realise is that by doing so, your brand is about to be hijacked — and you’ve willingly signed a contract to keep buying it back.
Here’s how they hustle you.
Looking After Their Own Interests
There‘s two questions to ask yourself when signing up with a third party partner — be it a bookings platform, online delivery provider or even a free venue listing website:
- What’s in it for them?
Firstly, look at how the platform makes money. For instance, does it take a commission on every booking made via its website? Could this create a perverse incentive for them to encourage people away from your own website?
2. Are they a B2B service (whereby their business is acting in the interest of your business) or a B2C service (whereby their business is acting in the interest of consumers)?
If you’re a restaurant partner then you’re not a customer. Two different things. Let’s use Uber Eats as an example: when you become an Uber Eats restaurant partner, you’re agreeing to pay to have your brand on their platform. Their company, however, is interested in getting more customers onto the Uber Eats platform so that they can make more commissions. It’s not interested in building your specific business, and it doesn’t care what you have to do in order to attract more online orders.
As a result, you may find yourself with more orders, but worse off overall. It’s rare to find a restaurant that doesn’t complain about their dwindling bottom line after teaming up with Uber; the high commission fees, pressure to offer heavy discounts, ongoing delivery complaints and lack of quality control are just the start.
Affiliate Marketing is not a good thing
We don’t blame you for signing on with one of these platforms — after all, they invest a ton of money on marketing propaganda, sneaky online tactics and aggressive sales reps. They also spend a lot of time trying to convince you that Affiliate Marketing agreements are going to be good for business.
When you pay UberEats, Deliveroo, Menulog, Foodora or the like a commission in return for someone placing an order through their platform, that’s affiliate marketing arrangement. Same goes for the 50% off discount deal you did with Groupon that time and immediately regretted, like a sleazy one night stand.
Here’s what they’ll tell you in order to lock down that partnership:
- you’ll reach more potential customers;
- you’ll get more bookings or online orders;
- your brand will be promoted to their enormous network of users.
Here’s what they won’t tell you:
- you’ll work more for the same amount of revenue, or even less;
- the customers using their platforms are generally not loyal;
- their social media posts suck and email marketing is considered spam for anyone under 35 years old;
- they’ll run direct promotions to your customers encouraging them to book/order from other restaurants;
- they might run online advertisements that encourage people to click on their website any time they search for your restaurant.
Take it from Robert Galati, owner of Sydney’s Fratelli & Co, who spoke to Sydney Morning Herald earlier this year about his Stockholm Syndrome.
“Customers that were coming into my restaurant or were ordering directly from my website or over the phone are now going through Menulog because of convenience, and customers that were 100 percent mine are now going through these other avenues and they’re taking a cut, indirectly losing [me] money that was already mine,” he said.
Although Mr Galati sees food aggregators as more of a disadvantage than advantage, he realises the industry has grown so rapidly that it has become essential to work with them.
“I think that if I was to take my restaurant offline from Menulog, I risk losing that market they’ve taken. I think taking Menulog away could prove to be a very costly error,” he said.
Sounds less like a mutually beneficial relationship and more like a hostage situation.
Now it’s time to get technical. We know that third party or affiliate platforms make money from partnering with your restaurant, which is fine. That’s just business. Unfortunately, these companies don’t always play fair…especially when there’s an opportunity to make more money. One common way that they do this is with digital arbitrage.
Loosely defined, digital arbitrage means buying one brand’s product and selling it at a higher price. In economics it’s a legit strategy, but in the era of Google search we use the term to describe something much shadier. Most of the time if refers to one business bidding on another business’s branding and phrasing through Google AdWords. As a result, when users search for a Brand X, Google will show them links to Brand Z (the brand hijacker) first.
The purpose of this is to redirect traffic that was originally meant for your website to that of a competitor. It’s a tactic employed not only by competing businesses, but by media and third party platforms — the very ones you’re paying to help promote your restaurant.
If you’ve ever Googled your own restaurant and found some weird links show up in the first few search results, it’s likely you’ve been victim of the practice.
Any company that’s in a position to make money from your brand name can do this — it’s certainly not limited to third party platforms. In fact it can extend to other restaurants, media publications, bloggers…and arbitrage is only one example. There’s a multitude of Black Hat SEO techniques that can be employed to drive traffic away from your website and towards another.
Here’s some examples of what it looks like.
Protecting your brand
The good news is that Google has put measures to combat brand hijacking in recent years, particularly with the introduction of the Knowledge Panel. If you’re not familiar with the term, the Knowledge Panel looks like this:
Depending on the device a user is browsing on, it will either be shown at the top of your search results or on a bar on the righthand side of the screen.
Otherwise, there’s a few things you can do to help protect your brand from hijackers and digital arbitrage.
- Claim your space on the web. You don’t need to spend thousands of dollars on a website — even if it’s just a basic landing page, it’s there to ensure that your own content is shown first. Put some effort into your SEO, and if necessary get some help in optimising your landing page design. Using a strategic copywriter (a copywriter with special skills in attracting online traffic) can be a cost-effective way to improve your SEO.
- Don’t use B2C platforms for online delivery, reservations, discount vouchers or affiliate marketing. Only work with platforms that don’t have an incentive to compete with your own digital content and IP.
- If you insist on using Dimmi or OpenTable, make sure you’ve got the widget sitting on your website to minimise commission fees.
- While you’re at it, talk to your rep about the fact that they’re not doing enough to promote you/that you’re unhappy with their fees/that they’re running AdWords campaigns. If enough of you complain, they’ll be forced to lift their game — or at least sweeten your deal.
NEXT WEEK: more exciting examples of digital hijacking. We show you how Lume fights back with pointy-worded legal letters and trolling. We let the good times LOL.
Veronica Fil is the Business Manager of Lume resturant in Melbourne, and the Head of Marketing at Mr Harry’s — a hospitality consultancy for business owners who are fed up with paying lots of money for shit marketing and PR. Follow on Instagram at @mrharrysmark.