Instacart rolls out shoppable ads

Instacart is making ads more shoppable.

On Thursday, the grocery ecommerce platform is launching a pair of new advertising offerings for CPG brands. They include:

• Shoppable video ads will allow brands to feature stories, motion and audio in ads, along with an add-to-cart function in-stream. In the immediate term, Instacart will pilot this feature with CPG brands to determine what it will look like when it is made available in self-service via Instacart Ads Manager later this year.
• Enhanced shoppable display ads that are designed to serve as a brand’s “pop-up shop” on Instacart. Brands can pin a bundle of items that are likely to be purchased in complement to products purchased organically. The ads have functionality to add the items to a cart directly from the ad. It will be generally available in Ads Manager later this summer.

This move that signals Instacart is seeking to enhance its advertising offerings with the kinds of click-to-buy capabilities that are growing on social media platforms and streaming TV. Earlier this year, it launched shoppable recipes that can be used by creators. These new ads bring the direct-to-cart capabilities to its own marketplace, where ads exist alongside the product listings that customers browse as they order items for grocery delivery from nearby stores.

In a grocery store, end caps, and store entrance product displays are the tried-and-true promotional tools brands use to stand out in the aisle. Instacart's platform shows that digital grocery shopping is remaking this experience with product curation, video and targeting capabilities.

"Advertisers choose Instacart because we've built a platform with high-intent consumers, unparalleled scale of retailers, and closed-looped measurement, all of which drives meaningful results for our brand partners," said Ali Miller, Vice President of Ads Product at Instacart, in a statement. "We designed our new shoppable ad products to create more brand storytelling opportunities for CPGs, help them inspire and reach new and existing consumers, and ultimately drive sales in a singular unit.”

Miller said that the ads are also proving to resonate with shoppers, bringing “more discovery and inspiration to the online shopping experience.”

The new ad offerings come as Instacart is preparing for an initial public offering, bringing its shares to a public stock exchange. In a move that was widely speculated over for months, the company filed confidentially for the IPO earlier this month. This, in turn, came about a month after Instacart cut its valuation by about 40%, to $24 billion.

Advertising is key to Instacart’s future growth, company leaders have said. At ShopTalk earlier this year, CEO Fidji Simo said that, in the long-term, she sees the company making a profit on ads, while essentially breaking even on delivery.

Following that talk, advertising was prominent in the launch of a suite of tech offerings called Instacart Platform, as the company rolled out capabilities to stand up ad services on grocers' websites. With the new shoppable ads, the company is upgrading what it can offer the brands who sell at grocery stores on its own platform.

With the launch, Instacart is touting pilot work on the new ads with brands that are familiar on grocery store shelves, such as Dove, Oreo and Ritz owner Mondelēz International, PepsiCo and S.Pellegrino. In all, it said 40 CPG brands piloted the new display ads.

"Partnering with Instacart helps us stay ahead of the curve when it comes to inspiring and engaging consumers along their shopping journey," said Emily Frankel, SVP of eCommerce Marketing head at PepsiCo, which has multiple brands in the pilot. “Shoppable display has proven to be an effective way to drive first-time purchase of our products via the Instacart platform, and while we're just getting started with shoppable video, we look forward to continuing our work to give consumers a compelling omnichannel experience."

These ads follow moves earlier this year to launch dedicated brand pages on the Instacart platform where CPG brands could offer a curated selection of products, and auction-based ads. It also expanded existing sponsored product offerings to Canada. The company said it offers self-service and managed ad services for more than 5,000 CPG brands.