Instacart is one of America’s most popular grocery delivery platforms, covering over 9,000 different retailers, from smaller regional grocery stores to some of the largest retailers like Target, Walmart, Costco and Kroger.
For emerging brands, Instacart can be a very powerful tool in helping to increase your retail sales velocity and, more importantly, providing an omni-shopping experience for your customers who can’t make it to the store that day.
Instacart advertising has become a crucial part of any CPG retail strategy. Your customers are already there, so how are they finding you? In recent years, we’ve seen a significant evolution in how best to set up Instacart ads. With the digital shelf becoming more competitive, here’s how Celerity CPG tackles Instacart Ads.
Start With The Basics
Product Catalog
We have to make sure we start on a strong foundation in order to squeeze as much value out of our ad budget. The product catalog is sometimes neglected but optimizing this can dramatically increase your conversion rate.
Just like how you would ensure your physical shelf has the right product information, you do the same for the digital shelf. Optimizing your product title, descriptions, dietary attributes, and images is very important. Something often overlooked is ensuring that all your products have been included into your catalog. You’d be surprise how many products have not been automatically included into your catalog.
Keep in mind that, unlike Amazon’s search engine, Instacart does not ingest keyword data from your product titles to allow you to organically rank higher. However, it’s important to provide important keyword and product information so that your customers can more easily shop around and convert on keywords that make the most sense for your products.
Brand Store
Another feature, especially when running display campaigns, is having a beautifully curated brand store. Brand stores can bring your brand to life, giving you the opportunity to showcase your products and brand identity.
When running display and video campaigns, you’ll want to ensure your brand store is routinely updated because you’ll consistently be sending traffic directly to it.
Now For The Fun Stuff
Sponsored Product Ads
When running sponsored product campaigns, we observe the best performance and the highest return on ad spend (ROAS). Depending on the category and the distribution of the brand, an average ROAS that we see range from 3.6 to 4.8. It’s important to note that brands with greater distribution points tend to yield better performance, as each distribution point unlocks access to a broader customer base.
Instacart ads can be as simple or complicated as you’d like it to be, but in our experience, Instacart isn’t like most ad managers. There’s no negative targeting, so the traditional branded vs. non-branded campaign structure doesn’t apply here. The only way to control keywords that you don’t want to target is by bidding at the floor, which currently is $0.30.
It’s not a perfect way to “negatively” target keywords, but it’s all we have for now. You’ll also find yourself in a balancing act of generating as high of a ROAS as possible while trying to maximize your New-To-Brand sales percentage.
We find that when we try to max ROAS, Instacart’s algorithm tends to find customers who have bought from us before, reducing our NTB percentage. To counteract this, we run both optimized and manual CPC campaigns for each product type.
Optimized campaigns typically see the highest ROAS but lower NTB sales, while CPC manual campaigns see the inverse. We believe this to be the case because manual campaigns allow us to bid on keywords that we know perform well for our brands. Even though Instacart’s optimized algorithm is extremely powerful, we still know which keywords, especially cross-category keywords, will typically perform well.
Display Ads
Most digital marketers assume that the point of display campaigns would be to drive awareness, which is true; Instacart display ads surprisingly drive a lot of conversions, especially if you’re running Shoppable Display. This ad placement allows you to add a traditional display ad while also adding, something we like to call, item shoveler next to your creative.
This works so well because, unlike normal display banners, customers can click the add to cart button right from the display ad and add the item to their cart without navigating away from the digital aisle—and the fewer clicks, the less checkout friction.
Normal display banners are also important as they take up the digital real estate at the very top of the page, driving that ever-important brand awareness. But this time, when clicked on, the click-through sends you to your brand store.
We’ve been testing a lot of display campaigns and have found them to be very effective when stacking both traditional sponsored products, display and shoppable display. These ad placements allow you to take up as much digital real estate as possible for particular keywords. We’ve also noticed an overall lift in sponsored product performance when running both campaign types at the same time.
Video Ads
The last Instacart ad placement, and one that can be a powerful tool to share your brand ethos and or important product features with your customers, is video ads. Video is obviously king when it comes to content, but performance has been all over the board when it comes to ROAS.
In some weeks, we’ll see ROAS between 3.5 to 5.0, while in other weeks, it will drop down to 1.3. There are three different targeting types: keywords, behavior shortcuts, or build your own behaviors. If you’re looking to maximize your brand awareness, consider leveraging behavior shortcuts. You’ll be targeting audiences like, “New to Instacart” or “Buys in my category, not my brand”. For optimizing ROAS, you’ll want to utilize the Keywords targeting option. We recommend exporting your keyword data from your sponsored product campaigns to create a list of high-performing keywords, which can then be imported into the video campaign.
We’ve tested a variety of targeting strategies and found that aligning video content with the specific behavior shortcuts or keywords of your target audience can help significantly boost both your engagement and your conversions.
Maximizing Your Instacart Ads
Instacart presents a versatile advertising platform for emerging CPG brands looking to enhance their presence in the digital grocery space. Its comprehensive offerings—from optimizing product catalogs and leveraging sponsored product ads to using display and video ads—provide brands with an array of tools to increase their visibility, sales, and customer engagement.
By combining various ad types and carefully balancing campaign strategies, brands can effectively reach their target audiences and maximize their ROAS. Instacart continues to evolve its advertising options, allowing for more opportunities to drive brand awareness and more importantly, conversions. Brands that strategically utilize Instacart’s advertising features are well-positioned to thrive in the competitive online grocery delivery marketplace.
