Online grocery is an industry that, until very recently, seemed like some kind of beta test for something that would be popularized in the far future. However, when COVID-19 struck the world, thousands of people no longer felt safe going to get their groceries. That far future very quickly became the present, as many people turned to the internet for their grocery shopping needs.
Instacart, the leading grocery delivery service, grew from 5.5 million users in 2019 to 9.6 million users in 2020. When the safety-oriented masses looked into it, it became a “no-brainer” to have their daily products from Walgreens or CVS delivered to their doorstep. This online grocery “boom” led to a massive surge in profitability for brands who decided to start utilizing Instacart’s Advertising Platform, so they could ensure that their products were top-of-mind for customers shopping on Instacart.
What is Instacart?
First off, Instacart is a platform that allows users to login via phone app or desktop, and digitally “walk the aisles” of over 600 retailers to get their grocery products with same-day delivery. Whenever the user puts in their order, an Instacart “shopper” (similar to a Grubhub or Doordash runner) will go and pick up the user’s groceries and deliver them straight to their doorstep.
How Does Instacart Advertising Work?
Instacart advertising is a self-service platform that allows brands to advertise their products directly to customers shopping on Instacart. The platform has similar functionality to many other advertising platforms, like Amazon.
The rest of this article will teach you everything you need to know about the different Instacart ad types and their benefits. If you don’t need these details, then check out our guide on how to start advertising on Instacart.
General Functionality of Instacart
Homepage dashboards for an overview of each brand’s performance.
Campaign-level recommendations for daily budget, default max CPC, and high-potential keywords
Main self-service ad format is “Sponsored Products”, with CPC exact-match keywords for targeting
Ad group-level (typically organized into product categories) default CPC controls, Instacart recommendations, and Keyword controls.
“Second-price” auction system, where the bid winner pays 1 cent more than the second-place bid
Robust reporting options
Instacart Ad Types
Although the self-service platform for Instacart advertising is centered around sponsored products, there are some more advertising options available for Instacart. The other options include Instacart Coupons, Instacart Delivery Promotions, and Instacart Hero Banners.
Instacart Sponsored Products
Instacart sponsored products is the main ad type that most brands deal with in Instacart:
Deals directly with keyword targeting, and is paid for in a self-service CPC format. (No minimum budget required)
This is the main ad type that most brands deal with in Instacart.
These sponsored products will show up on the other side of search queries that a customer makes on Instacart, visibility is based on retailer inventory and geographic availability.
As you can see, sponsored products show up at the top of search results, and are a great way to gain instant visibility to in-market customers. Much like a real grocery store, getting favorable product placement plays a significant role in product consideration. For more information, read our comprehensive guide to Instacart sponsored products.
Instacart Coupons
Instacart coupons are another way to bring attention to a specific brand’s product:
Once a coupon is redeemed, it won’t be available for 30 days
You only pay for coupons that are redeemed
This type of promotion is booked directly with Instacart representatives
Instacart Delivery Promotions
Free delivery is another promotion accessible for brands to leverage:
These are organized at the enterprise level, and require significant investment, along with inventory and distribution specifications
This type of promotion is booked directly with Instacart representatives
Note: These delivery promotions can be overwritten by Instacart-wide delivery promotions.
Instacart Hero Banners
Hero banners are a great way to call attention directly to your Brand on some of the more topical areas of Instacart’s platform. These allow you to pop up at the top of certain product type sections (Ex: “Beverages”):
Allow for a strong call to action, with background imagery
Appear at the top of product sections
Have a minimum flight date
This type of promotion is booked directly with Instacart representatives
How Instacart Ad Types Play a Part in Campaign Strategy
Success on Instacart With Minimal Advertising Budget
Being successful on Instacart Advertising is possible with all types of budgets. With a low budget, the main focus is going to be on Sponsored Products. If you have a low budget, it’s important to be selective with the products you are advertising on. Start off by choosing 3-4 products that are your main volume drivers.
If you add too many products and campaigns right as you launch, you will spread your budget too thin to understand keyword data trends. This also leads to your budget capping out earlier in the day, making your ads unavailable to potential customers who will be shopping later in the day. Once you establish success on these products, you can begin to add new products and start testing performance on your more “experimental” products.
Efficiency With ROAS
Another important thing to do when you have a smaller budget is to choose solid and attainable efficiency goals. Efficiency in Instacart is determined by ROAS, and you should be optimizing your campaigns and keywords based on your ROAS goal.
If you choose a ROAS goal that is too high, you won’t be getting the volume necessary to spend your advertising budget effectively, allowing your competitors to win most of the bids. If you choose a ROAS goal that is too low, you run the risk of spending your budget too quickly, not to mention the opportunity cost of losing potential ROI. Effective goal management will allow your low budget to be successful, and give you sufficient data to make budgeting decisions in the future.
A safe ROAS goal to start off with, is a 3.0x. The best goal will always vary based on your product offering, but starting with a 3.0x will should allow you to hit volume while getting a sufficient ROI. After a month of ads being live, reassess this goal based on the data you gain during that time.
Speaking of ROAs… Watch the video below to how the Search Nurture helped Jergens beat its efficiency goal by 77%.
Winning Against Competitors on Instacart
Utilizing Instacart Hero Banners is a great way to win against your competitors. Since Hero Banners appear at the top of categories, you are drawing attention to your brand first. Delivery Promotions and Coupons are another great way to set yourself apart from competitors in more of a price.
Utilizing Sponsored Products is another way to win against your competitors. Since this self-service part of the platform is keyword-oriented, there are a number of bidding strategies you can implement to get a competitive edge.
Running ads in the first place will allow you to jump to the top of search queries when done correctly, showing customers your brand’s products before they even scroll down to look at the organic search results.
Additionally, you can bid on competitor’s keywords, making your product show up before theirs. However, this type of strategy needs to be monitored closely for efficiency, to figure out which competitor terms are generating the most conversions.
Managing Multiple Brands on Instacart Advertising
The best ad type for managing multiple brands on Instacart is hands down Sponsored Products. The self-service part of the platform allows you to easily jump between brands, all in the same interface. You can optimize and report on all your campaigns without having to go through a complex process.
With regard to strategy, different brands will require different strategies to achieve optimal success, and following one single strategy for all of your brands will reduce your overall success on the platform.
Should Instacart Be Part of Your Marketing Strategy?
- Short answer, yes. For a longer answer, here are some compelling reasons to consider using Instacart Advertising.
- Instacart Advertising can be successful for any type of budget, big or small.
- It’s a great way to grow your customer base to a new target market, and win against competitors.
- Results are specific and measurable.
- Instacart is a popular shopping delivery service that is only growing in its number of users and profitability.
Need more convincing? Check out the Instacart ad campaign we managed for Jergens. Our team of retail advertising experts can help you build an Instacart strategy and manage the campaign on-going. But first, we’d like to learn more about your business goals and advertising objectives. Schedule a meeting with our team to get started today.
