Like many pandemic-inspired consumer dining trends, the meal kit delivery services (MKDS) market has seen tremendous growth over the past year. That growth has been fueled by limited dining out options combined with consumers’ desire for healthy convenient meals. At the same time, many millennials who prefer homemade meals over fast food are also driving the demand for healthy and convenient meal options, so much so that the MKDS market is expected to reach $20 billion in revenue by 2027.
But one of those services, Chicago-based Tovala, is offering meal kit delivery with an interesting twist. Meal delivery services come in two flavors – Heat & Eat or Cook & Eat. The former refers to prepared, fully-cooked meals which are delivered to your door and don’t require cooking beyond warming up the food. Tovala combines the Heat & Eat approach with the Cook & Eat approach via the use of a smart oven that enables customers to create home-cooked meals requiring minimal prep in roughly 20 minutes or less. Launched in 2015, Tovala is a relative newcomer to the MKDS space, but its recent success has been backed by a marketing strategy that leans heavily on connected TV advertising.
“Tovala is a really revolutionary way to solve the dinnertime dilemma,” said Lesley Butler, Tovala’s CMO. “If meal kit services were 1.0 in bringing more convenience to people, then Tovala is 2.0 by bringing technology into the process, so you can have a home cooked meal with zero work.”
Each week, Tovala sends its customers fresh, mostly raw ingredients. Every meal comes with a QR code that can be scanned by Tovala’s smart countertop oven. The oven downloads the recipe from the cloud, cooks it, and provides a fresh meal in under 20 minutes. Tovala ovens can also cook over 750 grocery items with a scan-to-cook grocery feature that uses a product’s barcode to determine cook time for popular products like frozen pizza, breakfast items, and frozen meals.
Tovala’s meal service offering is especially popular with busy working professionals, parents—particularly those expecting a baby and/or new parents — and empty nesters. Within these segments, many customers aren’t solo diners, but couples, since it’s easy to cook two Tovala Meals in the Tovala Smart Oven at the same time with the caveat that the meals must be identical.
“Our customer base is even broader than that,” said Butler. “It includes caregivers, people with disabilities since it’s much easier to use Tovala than other meal kits (no chopping, dicing, etc.), those who are widowed, and college students.”
Diversifying from Facebook
Like many meal-kit delivery companies, Tovala has seen strong growth over the past year thanks to consumer demand for convenient healthy meals during a time when dining out has been difficult due to shutdowns and safety risks. Butler credits Facebook ads for helping scale their initial audience and raising brand awareness. But the rising cost of Facebook ads led her team to diversify their channel mix.
“We were seeing rising ad delivery costs on the Facebook platform,” she explained. “To keep driving incremental growth we needed to expand more broadly.”
Butler’s team recently began testing connected TV (CTV) to reach a wider audience and better stand out in the cluttered meal kit delivery space. Connected TV refers to premium video content that is streamed through apps, on smart TVs, or through over-the-top devices like Apple TV, Chromecast, or Roku.
Several things led Butler and her team to test CTV. Since Tovala is a new-to-the world product, Butler notes that they needed video — a strong performer — to assist with education and branding. “CTV leaned into that,” said Butler.
Tovala also recognized that their customers heavily overindexed as cord cutters. That is, TV viewers who subscribe to streaming services like Hulu, Netflix, and Disney Plus over traditional paid cable and satellite (multi-channel) services. CTV also seemed promising because of its growing popularity. Over 30 million US households have given up traditional TV in lieu of streaming services. This number is expected to reach nearly 50 million by 2024.
A third factor in testing CTV had to do with the promise of better overall performance for the channel versus existing channels like Facebook. Butler explained, “Based on what we’d seen and after looking at our media costs, we ran some numbers and our hypothesis was that this would be a strong performer for us.”
Performance-driven CTV ads
Tovala worked with MNTN, a CTV performance marketing platform, to quickly get up and running with a CTV pilot campaign (until a few days ago, MNTN operated under the name SteelHouse, and that’s how Tovala referred to it in interviews for this article). MNTN is a self-serve ad management platform akin to Facebook or Google Ads, but with a focus on direct TV advertising. Campaigns are highly data-driven and optimized over time based on performance.
MNTN worked with Tovala’s existing linear TV assets—ads that were focused on educating consumers about the product and service—and helped Butler’s team develop a pilot CTV program that included premium TV networks like HGTV, CNN, Pluto TV, Food Network, TLC, and CBS.
“My growth marketing team and I were attracted to SteelHouse for a couple of reasons,” said Butler. “First, they specialize in CTV and have that depth of experience. CTV is not like linear TV. It’s a one-to-one relationship on a very data-driven platform.”
Butler explained that MNTN uses what they call an “advanced self-serve” approach that enabled her team to make changes much like they did in Facebook Ad Manager. MNTN provided ongoing support via weekly calls that included performance reports and best practices to help Tovala create a successful pilot program.
Before launch, Butler’s team defined what program success should look like for CTV. Butler noted that the shape of the funnel is a little different than it might be on other channels like Facebook. They established KPIs for the campaign and committed to a one-month pilot program.
“We knew we needed to give the platform more than a few days to see if it worked,” explained Butler. “It’s a very data-driven process that needs to optimize for performance. We needed to understand what that looked like, make sure we had enough budget, and make sure that our creative was likely to perform. Once we set up those pilot parameters with SteelHouse, we were able to run the test.”
CTV helps Tovala lower acquisition costs
Tovala wanted to test CTV because they were looking for a medium that helped them reach new audiences and they found that it delivered — in spades. Butler noted that ad delivery costs like CPM were lower than on other platforms and overall acquisition costs were up to 60% more effective.
“Our conversion rates were stronger,” said Butler. “Once people had come onto the platform and visited our site, they converted at a much higher rate. That’s allowed us to drive incremental growth beyond existing channels.”
The pilot campaign included programmatic display ads to drive frequency and site traffic. Tovala saw a significant boost to performance over the four-week program. Campaign CPA fell 50 to 75% week over week as data optimization and programmatic display were layered in. The pilot program ultimately delivered 5MM impressions over four weeks, with traffic converting at a 20% higher rate than Facebook.
Words of advice and next steps
Butler recommends that companies who want to test CTV be prepared to spend more budget versus standard digital channels like Google or Facebook, while also understanding that it can take time for a CTV campaign to produce optimal results.
“You have to commit to CTV for a certain number of weeks and reach a certain threshold,” explained Butler. “There is an element of being patient and committing to the test to see what works so you can understand what levers exist to optimize performance such as advanced targeting, retargeting, or creative optimization. Once we reached a certain threshold, we saw a strong improvement in performance which has held steady since we finished the pilot.”
CTV advertising is currently about 15% of Tovala’s budget and they’re working with MNTN to scale that over time.
“We believe, based on the audiences we’re targeting, that there’s no reason the campaign can’t eventually be 30% of our budget,” said Butler. “That’s the goal over the next few months.”