AI-Driven Transformation of Retail Media Advertising: How Demaecan Achieved Over 1,000% ROAS
About
Demaecan
Since its founding in 1999, Demaecan has continued to create value in people’s lives and time through the power of technology. It is one of Japan’s largest food delivery services, operating across all 47 prefectures and connecting a vast number of restaurants with consumers. As a platform, it has been a driving force in Japan’s food delivery market.
Challenges
The Limitations of Ad Efficiency and Scalability
Demaecan faced its greatest challenge in the limitations of existing advertising models.
With traditional CPC (cost per click) advertising, merchants couldn't guarantee a high ROI despite spending advertising funds, as fixed costs were incurred regardless of results. The ads weren't personalized, yielding low CTR rates. Moreover, irrelevant ads risked negatively impacting user experience (UX), forcing the platform to intentionally limit ad placements.
Furthermore, the platform's advertisers were primarily large corporations, and since it lacked self-service functionality, small and medium-sized merchants had no means to participate in advertising. This represented a significant opportunity loss from both perspectives of expanding the platform's overall revenue and diversifying its merchant base.
Solution
Japan’s First CPO-Based Retail Media Ads with Moloco Commerce Media
In November 2024, Demaecan became the first company in Japan to adopt Moloco Commerce Media (MCM), launching a new ad product called “Order Boost Ads.”
The core feature of this solution is the CPO (Cost-Per-Order) pricing model. Merchants benefit from a significant reduction in cost risk through a performance-based system where they are only charged when an order is generated. They can independently set both their budget and commission rate, allowing all merchants - both large and small - to enter the advertising market with a sense of control.
The core technology lies in AI-driven one-to-one personalization. Based on users' behavioral history, the system dynamically optimizes rankings using predicted click-through rate (pCTR) and predicted conversion rate (pCVR) to display ads with the highest order probability to each individual user. This fundamentally addresses the previously problematic issue of irrelevant ads negatively impacting user experience.
By introducing self-service functionality, even small and medium-sized merchants with limited technical expertise or resources can now independently manage their advertising operations. This transformation has redefined the platform's advertising ecosystem, making it accessible to all merchants, regardless of size. Additionally, Moloco's dedicated team provides strategic consulting to support data-driven continuous improvement.
The solution supports all platforms including Android, iOS, and web, enabling nationwide service deployment across Japan.
Results
After implementing MCM, Demaecan's advertising performance showed gradual yet dramatic improvements.
3 months post-implementation (December, 2024 - March, 2025) : The effectiveness of AI-powered personalized ads became immediately apparent through measurable results. Clicks increased by 2.7x, with CTR reaching 4%. Orders generated from ads expanded 3.3x, while CVR improved to 11%. This demonstrated that highly relevant ads directly translated into actual order conversions.
6 months post-implementation (December, 2024 - June, 2025) : Total advertising revenue across the platform grew 2.3x. Based on Moloco’s own data, average ROAS exceeded 1,000%, with CPO model effectiveness firmly validated through these numbers.
12 months post-implementation (December, 2024 - December, 2025) : The self-serve merchant segment reached 70%, with previously underserved small-to-medium merchants growing into key advertisers for the platform. The rate of active merchants adoption increased to 28% representing a 2.5x increase, while the 3rd-month retention rates maintained an impressive 94% based on Moloco’s data.
"Previously, entry barriers to advertising were high, and results were difficult to measure. After implementing Moloco Commerce Media, we've completely resolved those challenges through its CPO-based model and AI-driven automated optimization. The fact that 70% of our self-serve merchants adopted the platform within just one year demonstrates the significant transformation across our entire ecosystem."
— Hideo Yamashita, Ad Growth Manager, Demaecan.
Summary
The partnership between Demaecan and Moloco has redefined the potential of retail media advertising in the food delivery industry. The CPO-based model combined with AI-driven automated optimization simultaneously addresses the challenges faced by all three parties: "merchants wanting to eliminate advertising waste," "end users seeking better experiences," and "platforms aiming to expand revenue." Moloco Commerce Media represents not just an advertising tool but a business engine that supports the sustainable growth of platforms.
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