Instacart Delivers Google Shopping Ads for Its CPG Partners, Powered by Its Retail Media Data

Rhea-AI Summary

Instacart (Nasdaq: CART) partners with Google to expand Google Shopping ads for CPG brands, including Danone's Oikos, Kraft Heinz's Kraft, Lunchables, Oscar Mayer, and Philadelphia, and Publicis Media's clients. The move leverages Instacart's retail media data to reach high-intent consumers on Google, driving same-day delivery purchases. The growth of US digital retail media ad spend is expected to double from $46 billion in 2023 to an estimated $109 billion in 2027, making it larger than connected TV, digital audio, and linear TV combined.

Insights

Market Research Analyst

The strategic partnership between Instacart and Google to integrate Google Shopping ads with Instacart's retail media data represents a significant evolution in the digital advertising landscape. The collaboration enables consumer packaged goods (CPG) companies to leverage Instacart's granular first-party data to enhance their advertising campaigns on Google's extensive search platform. This synergy could potentially increase the effectiveness of these campaigns by targeting high-intent consumers more accurately, ultimately driving sales and improving return on ad spend (ROAS).

Instacart's move to extend its advertising capabilities beyond its platform can be seen as a response to the growing importance of retail media networks. As the digital retail media ad spend is projected to more than double in the next four years, Instacart is positioning itself as a pivotal player in this space by offering a more integrated and data-driven advertising solution. This could result in increased market share for Instacart in the advertising domain and potentially attract more CPG brands to its platform, seeking to capitalize on Instacart's consumer insights.

Furthermore, the pilot results indicating positive ROAS and 'new-to-brand' sales suggest that this off-platform expansion could provide a competitive edge for Instacart's CPG partners. By driving incremental sales and capturing new customers, brands could see a substantial impact on their bottom lines. However, it is essential to monitor the long-term effectiveness of these ads and the sustainability of the incremental sales lift reported by Instacart.

Financial Analyst

The announcement of Instacart's integration with Google Shopping ads could have notable financial implications for the company and its listed stock (Nasdaq: CART). By capitalizing on the trend of increased digital retail media ad spend, Instacart is likely to see a diversification and potential increase in its revenue streams. The ability to deliver a reported average of more than 15% incremental sales lift for brand partners may attract additional advertising spend towards Instacart, contributing positively to its financial performance.

Investors should consider the scalability of this model and the potential for Instacart to capture a larger portion of the growing retail media market. The partnership with Google, a dominant player in the digital ad space, could provide Instacart with a significant competitive advantage and possibly lead to upward revisions in revenue forecasts and growth projections. However, investors should also be aware of the challenges, including the constant evolution of digital advertising technologies and the need for continuous innovation to maintain a competitive edge.

E-commerce Expert

The e-commerce sector is witnessing a transformative phase with the convergence of advertising technology and retail data analytics. Instacart's foray into leveraging its retail media data for Google Shopping ads underscores the increasing value of first-party data in enhancing e-commerce strategies. The ability to directly influence consumer purchase decisions at the point of search could redefine the consumer journey, making it more seamless and potentially increasing conversion rates.

For e-commerce businesses, the integration of detailed consumer behavior insights with advertising platforms is crucial. It allows for more personalized and efficient marketing efforts that can lead to higher customer acquisition and retention rates. Instacart's pilot with notable CPG brands and its agency partner Publicis Media could set a precedent for how e-commerce platforms can extend their influence beyond their immediate ecosystem and contribute to shaping the broader digital consumer experience.

Instacart Ads Continues Off-Platform Expansion with Google Shopping Ads

Danone's Oikos, Kraft Heinz's Kraft, Lunchables, Oscar Mayer, and Philadelphia, and Publicis Media Among First to Pilot New Google Shopping Ads with Instacart's Retail Media Data

SAN FRANCISCO, Jan. 9, 2024 /PRNewswire/ -- Instacart (Nasdaq: CART), the leading grocery technology company in North America, and Google, today announced Google Shopping ads are now accessible to Instacart's advertising partners, leveraging the company's retail media data. With this expansion, CPG partners on Instacart, including Danone's Oikos, Kraft Heinz brands: Kraft, Lunchables, Oscar Mayer, and Philadelphia, as well as Publicis Media's CPG clients can activate Google Shopping ads, powered by Instacart's first-party retail media data and closed-loop insights, to reach high-intent consumers searching on Google and get their products into consumers' hands in as fast as an hour.

Instacart offers unique, rich insights on consumer shopping behavior from its massive catalog of more than 1.4 billion products across more than 1,400 retail banners. Google Shopping ads, featuring the CPG brands available on Instacart, can now scale to consumers who are shopping across Google more than a billion times a day.¹ With Instacart-powered Google Shopping ads, those consumers will be able to see ads for participating brands' products as they search and click to complete their shopping journey on Instacart with the convenience of getting their products delivered with same-day delivery. 

"Instacart's closed-loop platform and first-party retail media data are critical differentiators for CPG brands. Today, our team works with more than 5,500 brand partners to help them grow their businesses and drive incremental sales. With our collaboration with Google, we're now able to layer our valuable retail media data over Google Shopping ads' capabilities to enhance audience signals for our CPG partners' campaigns off of Instacart," said Laura Jones, Chief Marketing Officer of Instacart. "Over the last year, we've extended the power of Instacart Ads off-platform with a number of partners and now we're enabling our brand partners to reach the right audience while they search on Google and seamlessly drive them to purchase on Instacart. Every marketing dollar counts in today's macroeconomic environment and we're pleased with the early pilot results – from return on ad spend to 'new-to-brand' sales – that we're delivering for our partners."

"Danone is excited to participate in this pilot alongside Instacart to test new digital solutions with our partners, and continue to effectively utilize retail data to positively impact our health-driven brands," said MK Woltz, Director Media Connections at Danone. "We'll be interested to see the performance of this new ad solution that can hopefully enable a best-in-class consumer journey to purchase our brands directly from their search query."

"Retail media continues to be an important channel for our CPG clients and a core focus area for our business," said Jason Colon, EVP, Managing Director, Retail Media at Publicis Media. "Our agencies are constantly looking for innovative solutions that drive new levels of scale and client value. We look forward to testing these new Instacart-powered Google Shopping ads, which unlock a new way for our clients to engage with consumers, seamlessly drive them to purchase, and provide closed-loop measurement to demonstrate results."

The popularity of retail media is on the rise, with US digital retail media ad spend expected to double from $46 billion in 2023 to an estimated $109 billion in 2027 – anticipated to be larger than connected TV, digital audio, and linear TV combined (Insider Intelligence). The growth is fueled by the strength of first-party commerce data, which allows for more effective optimization and closed-loop results.

Today's news marks Instacart Ads' continued expansion and momentum to drive growth for its CPG brand partners' campaigns both on- and off-platform. Whether brands are utilizing search, social, programmatic, CTV, or linear TV, Instacart is committed to driving more performant and measurable outcomes through the power of its retail media data. Over the last 18 months, Instacart has built out its full-funnel tool kit of advertising solutions with new ad formats and features such as: pop-ups, shoppable video, promotions, and impulse, as well as new measurement capabilities, helping brand partners grow and prove the value of Instacart Ads. On average, Instacart Ads deliver more than 15% incremental sales lift, and in some cases twice that, for brand partners².

About Instacart

Instacart, the leading grocery technology company in North America, works with grocers and retailers to transform how people shop. The company partners with more than 1,400 national, regional, and local retail banners to facilitate online shopping, delivery and pickup services from more than 80,000 stores across North America on the Instacart Marketplace. Instacart makes it possible for millions of people to get the groceries they need from the retailers they love, and for approximately 600,000 Instacart shoppers to earn by picking, packing and delivering orders on their own flexible schedule. The Instacart Platform offers retailers a suite of enterprise-grade technology products and services to power their e-commerce experiences, fulfill orders, digitize brick-and-mortar stores, provide advertising services, and glean insights. With Instacart Ads, thousands of CPG brands – from category leaders to emerging brands – partner with the company to connect directly with consumers online, right at the point of purchase. With Instacart Health, the company is providing tools to increase nutrition security, make healthy choices easier for consumers, and expand the role that food can play in improving health outcomes.

For more information, visit www.instacart.com/company, and to start shopping, visit www.instacart.com.

¹Google Internal Data, Global, 2023
²Based on internal tests run across all brand partners using our Sponsored Product ads offering in the quarter ended June 30, 2023 and individual tests run for select brands or types of brands..

View original content to download multimedia:https://www.prnewswire.com/news-releases/instacart-delivers-google-shopping-ads-for-its-cpg-partners-powered-by-its-retail-media-data-302027742.html

SOURCE Instacart

FAQ

What is the latest partnership announcement involving Instacart and Google?

Instacart (Nasdaq: CART) has partnered with Google to expand Google Shopping ads for CPG brands, including Danone's Oikos, Kraft Heinz's Kraft, Lunchables, Oscar Mayer, and Philadelphia, and Publicis Media's clients.

How does the partnership leverage Instacart's retail media data?

The partnership leverages Instacart's retail media data to reach high-intent consumers on Google and drive same-day delivery purchases.

What is the expected growth of US digital retail media ad spend?

US digital retail media ad spend is expected to double from $46 billion in 2023 to an estimated $109 billion in 2027, making it larger than connected TV, digital audio, and linear TV combined.