Expanding Reach: Instacart's Ambitious Partnership with Google Shopping Ads for Off-site Retail Media Growth

Article Brief:

Instacart is pitching advertisers on Google Shopping ads enhanced by its own retail media data as part of a new pact with the search giant, per a press release. 

Initial partners for Google Shopping ads powered by Instacart include Oikos from Danone and Kraft Heinz's brands such as Kraft, Lunchables, Oscar Mayer, and Philadelphia, as well as various consumer packaged goods clients of Publicis Media.

This partnership highlights Instacart's expansion of its off-site retail media options, with ad placements prioritizing the convenience of same-day delivery on Google Shopping pages. For Google, this move has the potential to increase transactions in a category that has traditionally been dominated by competitors like Amazon.

Article Insight:

Instacart is kicking off 2024 with a flurry of activity, highlighted by its collaboration with Google as the most recent effort to enhance its growing advertising business. The announcement, made at the highly anticipated CES tech conference in Las Vegas, illustrates the increasing importance of off-site channels for retail media networks as they strive to expand rapidly and deal with oversaturated ad space on their own platforms. It also signifies a significant investment in retail media by Google, as the company aims to steer more users of its search engine towards purchasing everyday essentials such as groceries.

Retailers testing the new Google Shopping tools can utilize data from Instacart, which offers a catalog of over 1.4 billion products across 1,400 retail banners. They can also monitor the performance of their campaigns through Instacart's closed-loop measurement capabilities. For instance, a customer conducting a search for "mac n cheese" on Google Shopping may encounter sponsored display ads from Kraft, linking to Instacart and promoting same-day delivery.

Instacart occupies a unique position in the retail media landscape, handling delivery and pickup orders from various grocers, some of which have their own competing networks. Strengthening its ties to Google, the dominant search engine, could give Instacart an edge as online platforms and retailers aim to bridge e-commerce and advertising for a potentially lucrative media opportunity.

Numerous well-known CPG marketers, including Danone and Kraft Heinz, are currently testing out Google Shopping ads with the added feature of Instacart. According to estimates from Insider Intelligence that Instacart cited, the U.S. spent around $46 billion on digital retail media in 2023. This number is expected to more than double by 2027 as marketers look for more solutions based on first-party data due to the deprecation of cookies and changes in consumer behavior.

Following its IPO in September, Instacart has been rapidly introducing advertising products to increase revenue and attract more advertisers to its platform. Just recently, the company revealed plans to pilot ads on Caper Carts, its smart grocery shopping carts equipped with artificial intelligence.