Root cause a sudden decline in retention among restaurants using Ads

Problem Statement Description

Product context: DoorDash is a local commerce and delivery platform; its products include restaurant delivery, DashPass, grocery and retail delivery, merchant tools, and dasher tools.

DoorDash has observed a sudden decline in retention among restaurants that use its Ads product. These restaurants pay to promote their listings or menu items within the DoorDash marketplace, expecting incremental orders, stronger visibility, and a positive return on ad spend. The issue is that a meaningful number of restaurant advertisers are no longer continuing with Ads after previously using the product.

Your task is to investigate the decline as a root-cause analysis problem. Focus on how you would frame the anomaly, validate whether the drop is real, segment the affected restaurants, and identify the most likely drivers across product experience, marketplace conditions, advertiser ROI, billing, campaign setup, competitive pressure, and operational changes.

Assume you are working with cross-functional partners across Ads product, merchant success, sales, data science, finance, and marketplace operations. You do not need to solve the issue with a final product recommendation upfront; instead, show how you would structure the investigation and narrow down the cause.

The experience should consider:

- How “retention among restaurants using Ads” should be defined, including denominator, time window, and whether it refers to repeat spend, active campaigns, renewed contracts, or continued platform usage.

- How to confirm the anomaly is real by checking instrumentation, data pipelines, cohort definitions, seasonality, billing changes, and reporting delays.

- Which restaurant segments to inspect, such as SMB vs. enterprise, cuisine type, geography, tenure, spend tier, campaign objective, and managed vs. self-serve advertisers.

- How to evaluate advertiser ROI signals, including impressions, clicks, conversion rate, incremental orders, cost per order, budget pacing, and merchant profitability.

- How marketplace dynamics may affect Ads performance, including consumer demand shifts, delivery reliability, restaurant availability, competition for placements, and local market saturation.

- How to separate product-driven causes from external causes, such as competitor promotions, macroeconomic pressure, menu price changes, or merchant churn from DoorDash overall.

- What evidence would support or disprove key hypotheses, and what short-term mitigations could be considered while the investigation continues.

- How to prevent recurrence through monitoring, alerting, cohort dashboards, merchant feedback loops, and launch/change management.

The goal is to demonstrate a clear, structured RCA approach that can quickly distinguish between a measurement issue, a product or Ads performance issue, a merchant ROI issue, or an external market shift, while keeping DoorDash’s marketplace balance and restaurant advertiser value in mind.