Behind Ocado’s ‘fundamental rethink’ of digital marketing amid LHF regulations

“We refer to it as smart growth,” says James Saker, head of digital & growth marketing for Ocado Retail. “We work very hard to acquire new customers as a primary marketing goal. We want volume of customers, but we also want to drive lifetime value and profitability. If we’re not seeing the return on investment across any marketing channel – if it doesn’t wash its own face –then we’re essentially losing money.”

Going fishing in ‘a new pond’

For years, Ocado’s acquisition strategy was built around a set of established performance channels that had worked well at scale. But over time, the economics began to change. The cost to acquire new customers was rising; yet the business needed to grow fast while maintaining cost efficiency.

“We knew we had to level up our marketing mix to deliver our ambitious growth plans,” says Saker. From that, a new philosophy emerged: ‘What got us here won’t get us there’.

The answer was to start fishing “in a new pond”. Rather than simply pushing harder on existing levers, Ocado chose to diversify its channel mix and bring YouTube into the heart of its growth strategy – not just as a brand channel, but as a performance engine. The team built high-impact, shoppable video assets, integrated product feeds and shifted from pulsed seasonal bursts to an always-on strategy. “By being continuously active in-market, we could test creative, messaging and audiences in real time and generate data and insights much faster,” says Saker.

Tests revealed new high-performing audiences – such as cycling and green-living enthusiasts –while creative tweaks like combining voiceover with on-screen text delivered uplift. Demand Gen campaigns optimized for new customer transactions and re-engaged users through product feed extensions, optimized targeting and lookalike segments.

The approach unlocked thousands of weekly orders for a high-consideration purchase category. “A ‘big shop’ isn’t an impulse buy,” says Saker. “Yet by changing the bidding process we found a way to drive thousands of new customer orders… every single week.”

Inside the measurement machine

Ocado’s creative shift was matched by a step-change in how it brings data together to inform investment decisions. Rather than relying on a single source of truth, the team built a measurement system designed to learn, validate and recalibrate continuously.

“The big change is bringing what we refer to as media tenets,” explains Saker. “Every channel has a return-on-investment number, and we want to be able to invest in the channel until the marginal ROI falls negative.”

Those tenets are underpinned by the deliberate use of multiple data sources and methods, such as combining platform-level signals with incrementality testing, to calibrate its econometric modeling, both strengthening and validating its marketing effectiveness.

Culturally, that requires a healthy scepticism. “We are, as a business, incredibly skeptical over every data point,” says Saker. “If you base decision-making on one data point, it’s a fairly high-risk strategy.”

In practice, that means using data-driven attribution to optimize short-term performance, while running a mix of Brand Lift, Search Lift and Conversion Lift studies to understand what activity is genuinely incremental. Simultaneously, Ocado developed a clear perspective on how YouTube shapes brand perception over time. This allowed the team to understand the precise value of a 1% lift in brand perception and identify the specific breakeven point required to achieve it.

The aim, Saker says, is for “good enough” data rather than perfection, leaning on the “70% rule: if you wait for 100% of the data, you’re probably going to wait a long time,” he says.

It’s a philosophy shared by Google, as its measurement and effectiveness lead Nitin Gulati explains:. “Our collective goal was to measure the impact of Demand Gen across the short and long. Running lots of measurement studies and calibrating outputs with Ocado’s brand tracker and marketing mix modeling (MMM) helped narrow down the range of where Demand Gen’s true incremental ROI lies. Often, such continual incremental clarity is exactly what marketers need to progress at speed.”

Growth in action: results and momentum

The final step was to put these smart growth principles into practice,” says Saker. “By having a deep understanding of customer behavior and preferences, and the value-exchange, we pivoted our marketing efforts towards acquiring valuable customers.”

In terms of impact, data from Ocado shows the always-on, YouTube-led strategy has driven a 4.5x increase in MMM performance for YouTube, a 73% drop in cost per acquisition, a 32%increase in new customer transactions and a 43% lift in brand searches.

Lessons for marketers

For marketers looking to build a measurement engine that can withstand technology and regulatory shifts, Saker has a clear set of takeaways:

1. Be data-informed, not data-led

Resist the temptation to anchor everything to a single metric. “If you’re data-led, you just follow the numbers. If you’re data-informed, it’s a consideration,” he says. “There are plenty of data points at your fingertips. Be healthfully skeptical of every data point, and de-risk your decision-making by validating your thinking across different sources. Don’t rely on just one.”

2. Don’t keep fishing in the same pond

Avoid over-optimizing the same channels and audiences simply because they’re familiar. For Ocado, growth came from recognizing that established acquisition routes were plateauing and that new, scalable channels were needed. The shift to YouTube opened up a new pool of potential customers and learning, proving that diversification can be just as important as optimization.

3. Never lose sight of the customer

Stay anchored on the customer, not just the business problem. “Don’t lose sight of the brand and product you’re trying to represent to them. Put equal focus on the creative and the messaging as well as the internal conversation,” says Saker.

For Gulati, the broader lesson from Ocado’s journey is that culture and confidence are just as vital as measurement itself. “Recognizing and accepting gaps in a brand’s measurement ecosystem is just the first step on the path to progress,” he advises. “A leader that empowers their marketing team, fosters agility and experimentation, champions high-quality creatives with AI-driven performance; encourages a mindset of continuous learning that drives growth.”