It’s no secret that consumer shopping behavior is in a period of upheaval, with eCommerce taking the lead across the board, and your advertising strategy will need to keep up. Perhaps no industry is poised for a greater shift than the grocery industry. Even before the effects of the global pandemic, the online grocery industry was expected to grow from 3% to 30% of total grocery retail by 2025, according to an FMI & Nielson study.
Among this acceleration, Instacart is the most rapidly growing marketplace for CPG advertisers looking to get their products in front of consumers. The online grocery delivery service is now available to 85% of US households and 25,000 stores.
Recent additions to the Instacart advertising platform, self-serve Featured Product ads in particular, have created new opportunities to introduce products, increase the market share, and even protect in-store share of shelf.
Here is how you can get the most out of advertising on Instacart.
Where Your Ads Appear
With Featured Product advertising, customers will still see your ads when they search for related keywords, browse the home page or different departments, look at item details, or check out their personalized section.
The average Instacart customer searches multiple times during each shopping round. This offers several opportunities to reach people on adjacent items. Similar to Amazon, the majority of conversions come from clicks on the top row of results.
How Instacart Keyword Bidding Works
Featured Product advertising on Instacart works very much the same way as Sponsored Products on Walmart or Amazon. You can place custom bids on specific keywords, and auctions are won based on a combination of your CPC bid and relevance.
Your keyword-specific CPC will be used for the exact match of the keyword. If your targeted keyword is “tomato soup,” your keyword bid will only be applied to that exact phrase, and not to variations such as “tomato soup can” or “tomato soup tin.”
All campaigns have both auto and manual targeting capabilities. This means that campaigns with manual targeting keywords will also utilize auto-targeting by default.
You can set a small default bid of $0.15 at the ad group level to minimize spend on auto-targeting, then use higher bids on specific keywords for manual targeting. This way, your ads will show up on the search terms you care about most.
How to Make Sure Your Keyword Bids Are Competitive
Instacart uses a second price auction model similar to Amazon. This means that advertisers will pay $0.01 more than the next highest bidder for a keyword. This makes ramping up spend a lot easier, knowing that you can set high bids for your most important keywords without breaking your budget.
To understand how your bids compare to your competitors, Intacart provides a rating system for mid- to high-velocity keywords. The system has three metrics (green, yellow, and red) that indicate the probability of winning a certain percentage of placements given your current bid.
- Green: a high probability of winning 50% of placements
- Yellow: a high probability of winning 25% of placements
- Red: no chance of winning any placements
The system is updated in real-time based on the adjustments your competitors make to their bids.
Best Practices for Getting Started With Instacart
A good place to start advertising on Instacart is by replicating your top-performing campaigns from Amazon.
Use your top-performing search queries, not keywords, since Instacart uses exact match targeting. Filter your Amazon campaigns by high ROAS and impression volume, and export the highest search queries to use in your Instacart targeting.
1. How to Structure Your Campaigns
There is generally no limit to how many SKUs you can add to a campaign, but there is a keyword limit of 1,000 keywords per ad group (you can have multiple ad groups in a single campaign). Similarly to Amazon, it’s best to create tiered campaign structures in order to see maximum performance.
Creating product segments by price tiers will drive better results since it enables optimizations to account for ASP. In other words, you are able to bid more aggressively on higher ASP items, because they are able to absorb the higher bids. This way you can also increase your efficiency metrics, such as ROAS, average basket size, etc.
It’s also advisable to create separate campaigns for Club SKUs since most manufacturers will have a unique assortment. This enables advertisers to have more visibility into the overall spend mix flowing into the Club channel, as well as help make optimizations easier, such as high pricing for club SKUs where a higher CPC threshold can achieve the same efficiency as a lower priced SKU.
2. How to Set Your Budget
At the time of writing this article, Instacart doesn’t support daily budget pacing. The features will be added soon, but for now, you have to do a bit of a workaround to set your monthly budget.
Start by setting the end date for a campaign to the end of a given month. Once that date arrives, you can extend the end date to the end of the following month and increase the total campaign budget by your allocated budget.
3. How to Exclude Keywords From Campaigns
There is no negative match keyword capability or ability to block campaigns from bidding on anything specific. However, you can enter minimum bid values of $0.15 for unwanted or low-performing keywords that show up from auto-targeting to minimize spend on those keywords. You can employ the same strategy for search queries with your brand terms if you want to primarily focus on non-branded traffic in your paid campaigns.
4. Why You Should Get Started Now
With Instacart leading the surge in grocery delivery services, now is the ideal time to get your products noticed on this growing platform and build your share of voice. Just as we saw with the launch of Walmart’s self-serve advertising earlier this year, there is going to be a significant advantage to the early adopters of Instacart Featured Product advertising.
Whether your brand sells food and beverage items, pet food, cosmetics, or otherwise, it’s time to adapt and go where your customers are. Right now, your customers are flocking to Instacart.
Want to learn more about Instacart advertising? Check out Pacvue's Instacart advertising guides: Top Five Best Practices for Your Instacart Campaigns, and Instacart Advertising Guide for Alcohol Brands.