This pricing model allows MSMEs to run risk-free ad campaigns on Grab

Grab Editorial

. September 12, 2024 . Regional

The majority of food merchants on Grab’s platform are micro, small, or medium enterprises (MSMEs), often operating as single-outlet restaurants or owning just a few branches. These businesses typically have limited marketing budgets, making them hesitant to invest in ad campaigns.

In line with Grab’s ongoing commitment to helping MSMEs grow their businesses, Grab has introduced a pricing model, known as Cost-Per-Order (CPO) pricing on the platform.

This model effectively eliminates risk for Grab merchant-partners by charging for ads only when they result in a successful order. This approach ensures that small businesses can maximise their marketing budgets, reinforcing the value of their investment.

(Also read: Hitting $100M revenue run rate this year, GrabAds is one of Southeast Asia’s fastest growing advertising platforms)

The CPO model: A game-changer for MSMEs on Grab

We understand that for many of our merchants-partners, especially smaller food vendors, the main goal is to drive sales. Clicks and impressions, while important, are often secondary considerations.

That’s why we started rolling out the CPO pricing option in 2023, as one of the first on-demand platforms worldwide to provide this risk-free option to MSMEs.

(Also read: How we made marketing solutions affordable and low-risk for small businesses)

This option is integrated within the Marketing Manager, a self-serve advertising tool accessible via the GrabMerchant app on mobile devices.

This mobile-first workflow applies to the majority of merchant-partners on Grab.

With just a few taps, merchant-partners can easily create ads based on their target audience and sales goals. They can set their own budget and CPO bid or rely on Grab’s automatic CPO bidder for AI-driven suggestions for an optimal campaign.

The system tracks the campaign’s performance, showing merchants how many orders were placed because of their ad. With CPO pricing, merchants pay only when an ad leads to a successful order.

Other existing pricing options remain

While offering CPO pricing, we continue to provide the well-established Cost-Per-Mille (CPM) and Cost-Per-Click (CPC) pricing options. These cater to merchants who prefer traditional ad pricing types in their marketing strategies or have objectives beyond driving sales.

CPM, or Cost-Per-Mille, is a pricing model used in advertising to calculate the cost per 1,000 ad impressions. Originating from the Latin and Old French word for “thousand,” CPM is an effective method for enhancing brand visibility among a target audience.

On the other hand, Cost-Per-Click (CPC) campaigns charge advertisers each time a potential customer clicks on an ad. This model is good at directing traffic to specific websites or promotional offers.

Merchant-partners can set up these campaigns via the Grab Merchant Portal on their desktop or consult with account managers if applicable.

Empowering MSMEs

The CPO pricing model has proven to be particularly attractive to MSMEs with little to no marketing experience. It removes the risk from experimenting with ads, allowing these merchants to advertise with confidence while remaining in control of their budgets.

As one of the few platforms offering this pricing option in Southeast Asia, Grab is proud to contribute to the empowerment of local MSMEs.

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