With the onset of COVID-19 and the subsequent exponential growth of ecommerce, Instacart has quickly become a partner that every CPG or alcohol/spirits brand should consider integrating into its media mix. Instacart, thus far, has proven to be a highly effective channel and campaign results can be staggering — we’ve even seen upwards of 5x ROAS with some clients.
Though Instacart’s advertising platform is relatively straightforward, like with any other media platform, successful campaigns require careful planning and ongoing optimization.
Here are seven easy steps to take to ensure your Instacart Advertising campaign is a success:
1) Plan Carefully. Ensure your UPCs (unique product codes) and product inventory are accurate and campaign ready, meaning product descriptions and images are correct, and products are in stock, especially in high-distribution regions. We all know that COVID-19 has made managing inventory tricky; however, it is important to manage it as efficiently as possible since Instacart will not promote out of stock items. Ultimately, having ample inventory and benefits-driven copy on your product pages will help maximize performance.
2) Apply Paid Search Best Practices to Campaign Setup. Try to separate campaigns by product category or sub-brand. It will make campaigns easier to manage, optimize, and pace. Likewise, at the Ad Group level, further separate by product type (i.e. bottle sizes: 750ml, 1L, 1.75L, etc.).
3) Be Aggressive with Keyword Bidding. In the past, keyword bidding was restricted on Instacart, but now it’s open season! This is a basic, yet quickly evolving, feature that Instacart recently rolled out with several enhancements in June. In addition to the default keywords provided by the platform, brands can now bid on any keyword type that they wish to with no restrictions, including competitive terms.
In addition, second position bidding has been introduced, guaranteeing a maximum CPC of only 1 cent more than the second highest bid (think Google Ad words circa 2013). Our recommendation is to ensure bids are competitive for each ad group (10-15% higher than recommended by platform). Initially, the platform recommended bids may seem high, but based on performance data, many of our brands need to bid 10-15% above the recommendation to be competitive or close to top position.
4) Relevancy Matters. Just like the infamous Quality Score on Google or Relevancy Score on Facebook, relevancy matters on Instacart. When reviewing keywords, look through default keywords and ensure proper coverage, and only make relevant additions.
At the same time, be on the lookout for default keywords added by Instacart that are irrelevant. Brands may be tempted to bid on “indirectly related keywords” (i.e. bidding on taco-related keywords for a tequila brand), but performance data shows that these keywords don’t perform as well, and relevancy is still important for the ecommerce shopper. Impulse buys may not be so common on Instacart vs. an in-store experience, as the user intent is focused on specific product purchases.
5) Optimize. Test. Expect the Unexpected. Like with any biddable media, constant monitoring and optimization is key. At the start of a campaign, allow at least two weeks to gather data and initial learnings. Then, prioritize budget to best performing campaigns and adjust accordingly. Don’t be shy to test. With the high efficiency of the channel, there is room to test — possibly fail — and reallocate budget quickly. Remember Instacart is a different platform. It’s new, and you might very well discover that some products perform better here than on other ecommerce platforms or sites.
6) Work Closely With Your Instacart Ad Team. Instacart is growing, and fast. COVID-19 expedited their growth, and they have developed and expanded their teams, providing great customer service along the way. Their teams are very focused on the success of brands that commit to the platform.
As they grow, they are also learning and quickly course correcting, whether it is a platform feature or with service levels. They are learning to become a good media partner. Take advantage of the platform’s infancy and form strong relationships. Instacart also offers (for an additional cost) an array of reporting options and platform insights that can help inform buying decisions.
7) Be Prepared for Manual Operations. We’ve all grown accustomed to the large-scale automation in platforms like Google, Bing, or Facebook so it’s easy to forget that automation is a relatively new luxury in media buying! The Instacart Ads UI is still in beta and developing its automation capabilities, so when it comes to pacing and optimizing there are only so many levers you can pull. For example, the UI does not yet have daily budget caps yet; however, it is on the roadmap.
As the platform evolves more automation will follow, but for now be ready to enter and adjust bids, pull reporting and insights (unless you pay for reporting), and do pacing and optimizations all manually.But, don’t let this scare you off. Though some of the work is manual, it’s not exceptionally challenging. Alternatively, there are ecommerce bid management partners like Pacvue that can help reduce some of the manual labor.
The above steps are directional observations that can help drive success on Instacart’s advertising platform. Taking steps like these and mastering Instacart Ads will ultimately prepare your team for what’s coming: more competition in this space. DoorDash just announced they will be entering the grocery delivery game, initially starting in California and offering free delivery to their member base…monetizing this model with ads is just a matter of time.
As we run campaigns for our clients and learn more about the platform, we will be sharing insights and best practices on the blog. Feel free to reach out to us at firstname.lastname@example.org if you have any questions or need support managing and optimizing your Instacart campaigns.
You can also check out some of our latest Instacart and online grocery thought-leadership and FAQs for more insights and recommendations:
Virtual Events & Webinars
- The New Commerce Conference, a weekly event series dedicated to digital commerce, including sessions on:
Original Ecommerce Research (featuring Instacart & Online Grocery Trends & Insights)
- Run, Don’t Walk: Why Now Is The Time To Test Instacart Ads (MediaPost)
- 4 Ways to Plan for Success in a Changing Ecommerce Landscape (AdAge)
- Five Ways Brands Can Win in the New Ecommerce World (ClickZ)
Online Grocery & Instacart Advertising FAQs
If you’re looking for a way to save time on grocery shopping, Instacart is it. It’s an online grocery platform that lets you shop from local grocery stores, such as Publix, Kroger, Costco, Albertsons and more. All you have to do is sign up via the website or mobile app, provide your address, and choose your store, then shop! Instacart offers both pickup and delivery options for your purchase. If you choose delivery, an Instacart personal shopper will pick up your groceries and deliver them to you (contactless, if you prefer).
The growth of the grocery delivery industry has been explosive. Online grocery delivery and pickup sales were $6.6 billion in May 2020 — a $1.3 billion increase compared to the month prior. Looking ahead, a study by Catalyst and Kantar on the planned use of delivery services in the next year revealed that 63% of respondents plan to use Instacart more than in the past. There has never been a better time for CPG and alcohol/spirits brands to enter the online grocery space.
The online grocery business is rising, especially as players like Instacart become prominent, and there is plenty of room for success. However, brands need to ensure they have ample inventory if they intend to cultivate a sustainable presence in online grocery.
Yes, Instacart is currently able to support API connections to brands directly and looks to expand its capabilities in 2021.
Instacart’s market share continues to rise. In April 2020, Instacart’s share of the online grocery market reached a high of 57%, surpassing grocery giant Walmart.
Poor inventory management, poor customer retention strategy and inefficient delivery can unfortunately lead to failure. Instacart has managed to grow, even during COVID-19, because it continues to roll out initiatives to improve service, add more contractors and retail partners and speed up delivery times to keep up with consumer demand.