Instacart is turning to Google to maximize the value of the ads it sells so that it can grab a bigger chunk of the fast-growing retail media market.
Under the deal, Instacart will use Google Shopping ads to get consumers to buy products from Kraft Heinz, Danone, and others on its platform.
Instacart will use its own shopper data to target consumers so it can, for instance, send an ad for Kraft Heinz’s Philadelphia Cream Cheese to a repeat Instacart shopper searching for cream cheese on Google.
Instacart has sold Google Shopping ads to push consumers to its site before, but this is the first time it’s using those ads to sell products from specific brands, said Instacart CMO Laura Jones. Previously, a cream cheese ad that Instacart placed on Google wouldn’t be for a specific brand.
Instacart has also partnered with ad agency giant Publicis Media to pitch its CPG clients to buy these ads.
The Google deal gives Instacart a major new channel to grab more share by selling offsite retail media, which are ads powered by retailers’ shopper data that appear off their sites. Insider Intelligence expects retail ad spending will make $60 billion in the US this year, a growing share of which comes from offsite ad placements, which made $6.54 billion in the US during 2023, according to Insider Intelligence.
“We know that the data is valuable and we know that the ads within our platform are effective, but we want to continue growing the pie and making sure that the value of this data isn’t limited to just being deployed on platform,” Jones said.
Google isn’t the only place where Instacart places offsite ads. Its shopper data can also be used to target ads on Roku and through adtech company The Trade Desk.
Jones said the deal with Google is different however because Google searches usually indicate that consumers are highly intent on purchasing. Instacart’s Google ads also give CPG brands an opportunity to advertise on Google. Many CPG brands don’t buy ads on Google because they can’t steer consumers to their own online shopping site.
“Most CPGs don’t have a path to purchase on the internet,” Jones said.
Instacart has been bulking up on its ad sales capabilities, but it isn’t the only retail media seller striking deals to snag off-site retail media revenue.
A Google spokesperson said that retailers including Best Buy, Target, eBay, and Home Depot also sell Google Shopping ads.
And Walmart, Kroger, and Albertsons also work with The Trade Desk for ad targeting.
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