Instacart’s Explosive Growth Means Opportunity for Progressive Marketers

When the first wave of COVID-19 shelter-in-place orders went into effect across the U.S. in early 2020, Instacart quickly adapted to meet consumer needs and became an essential part of daily life for many. With the ability to place online grocery orders from their local stores—and have them delivered contactless to their homes—Instacart resolved an immediate challenge for consumers. In the first half of 2020, Instacart saw a 500 percent increase in order volume and a 35 percent increase in average basket size.

Through this exponential growth, Instacart has secured partnerships with over 350 grocery chains across 25,000 stores in over 500 cities in the United States and Canada—and it continues to grow by launching its own advertising platform.

For marketers, Instacart’s advertising platform means insight into a vast amount of purchasing data and targeting capabilities. As one of the first agencies to implement this advertising platform for clients, Mindstream Media Group has the insider information to help you determine if your brand should be taking advantage of Instacart’s benefits.

Basics of Instacart

Instacart is one of the largest, most widely available grocery delivery services across the United States. The delivery app partners with most supermarkets, local specialty shops and even pharmacies in the user’s proximity. Shoppers create a virtual shopping cart, filling it with grocery foods and household goods, which is then fulfilled and delivered to their home by a “personal shopper.”

Instacart was founded primarily in grocery services and partnership stores; however, as consumers continue to adopt and depend upon on-demand “personal shopping,” Instacart has branched out into non-food entities, creating connections with and access to personal everyday goods for consumers, like beauty, home and office products.

Instacart Ads Platform

During mid-year 2020, Instacart created a by-invite-only self-service advertising platform for brands to better reach their target audience. Via this ad portal, marketers can manage Featured Product campaigns that appear across the Instacart marketplace. These campaigns function similarly to paid search, leveraging user keyword and phrase searches to identify potential in-market customers. The platform then holds a bidding auction for advertisers under the payment terms of a cost-per-click model. The best part? No minimum ad spend required.

Source:  Instacart

How Brands Can Benefit from Instacart

Brands utilizing Instacart’s platform can benefit in multiple ways, like leveraging the partnership of an experienced agency partner, getting real-time performance data and arguably the most important—driving sales growth.

Leverage Agency Expertise

Mindstream Media Group has been granted an Instacart Ads license, which enables our clients to be at the forefront of an extremely high-demand and cost-effective form of advertising for consumer packaged goods (CPG).

Valuable (and Timely) Insights

Brands in the CPG category find the platform’s capabilities especially valuable and even critical as it enables real-time performance insight into advertising efforts’ impact to sales in the form of platform-reported return on ad spend (ROAS). Too often, brands are dependent on retailer-reported weekly—or worse, monthly—sales summaries, which must then be extracted or sent individually from each point-of-sale entity. This creates a lag in assessing the effect of paid media support on the lift in overall sales, making it even more difficult to quantify the rate of return relative to campaign spend.

A real-time performance dashboard is assigned to each brand account showcasing direct response campaign metrics like Impressions served, Clicks, associated Click-through Rate, relative Spend and ROAS. This view allows media managers to keep an eye on performance and delivery trends to assess the overall market landscape and track return.

Source: Instacart

Summary tables of each campaign Ad Group present a detailed breakdown of investment, overall sales volume and revenue generated respectively. Clicking into each Ad Group drills into the specific user searched keywords and/or phrases that triggered activity against each product category.

Source: Instacart

A Recommendations dashboard outlines where opportunity lies for media managers to bid up on specific user search queries that are trending related to the brand’s campaign Ad Groups. Although this is a useful tool, it is very important to evaluate each recommendation relative to existing Ad Group performance. Suggested Bids are typically much higher than what your current bid is clearing at, meaning that increasing your bid may actually bring down your ROAS!

Source: Instacart

Capture Sales

Instacart users have high average order values and frequently make repeat purchases, which presents brands with a favorable environment for capturing immediate sales. On average, customers conduct 20 searches per order, of which more than half result in an addition to the shopping cart, leading to a purchase. Thus, it is critical for brands to engage users often by queueing up all available products and inventory, and by bidding smartly on Featured Product campaigns.

Source: Instacart

Advertising Goals Supported by Instacart

The primary advertising goal supported by Instacart is sales. Brands can reach users in the shopping environment as they are curating their orders for immediate purchase. Keyword targeting and the pay-per-click auction model tailor the Instacart Ads platform as a ROAS solution for advertisers.

For example, Mindstream Media Group’s current Instacart campaigns for a CPG client consistently return 3.5 average ROAS and have even strategically and successfully effected 5.4 ROAS during pinpointed product pushes.

Consideration is the secondary goal, after sales. Keyword targeting allows brands to position themselves among similar categories and competitors that the consumer is actively seeking.

Types of Clients Best Suited for Instacart

While Instacart started out as primarily a CPG space, it continues to expand its partnerships with other retail category types and product goods such as Bed Bath & Beyond, Sephora, Best Buy and many others. The platform will undoubtedly continue to grow as consumer demand for convenience remains a top priority.

Source: Instacart

Whether you’re just getting started in ecommerce or are an experienced brand looking to accelerate growth, you could benefit from the help of an experienced marketing partner like Mindstream Media Group. Please reach out to start a conversation.

Read more about client growth in the CPG category: [Case Study]: Redefining CPG Media Mix for Immediate Growth

Learn about recent campaign success in Shopper Marketing: [Video]: Accelerating Sales With Shopper Marketing