Two years after Instacart made its first major push into ad tech, the company is launching more products that follow the playbook written by other major online ad platforms.
Two new tools, called Optimized Bidding and Bid Landscapes, launched Tuesday.
The optimizer product is Instacart’s first product that optimizes campaigns on behalf of advertisers.
For advertisers who run their own campaigns, Bid Landscapes provides more data to inform bidding strategies, like how likely a certain keyword is to lead to a conversion, say, or if seasonal changes mean certain keywords lose or sharpen their edge throughout the year.
“We’re a maturing ad platform,” said Instacart VP of advertising product management Ali Miller. As Instacart itself learns over time what works and what doesn’t on its ad platform, it will turn those learnings into commercial products.
Most ad optimization tech or self-service advertisers configure future spend based on post-campaign performance, Miller said, instead of Instacart’s predictive approach. One reason that approach doesn’t work well in food is because consumption is highly seasonal.
If users searching for cinnamon baked goods were big spenders in December, most platforms will tell the brand to prioritize that keyword even more in January. But what about the fact that cinnamon baked goods just sell in December? Perhaps in January the same brand may be better off promoting healthier options to dieters, before going in on chocolate by February.
With a couple years under its belt, the Instacart ad platform sees how bids change seasonally over the year, and other ways to extract value and efficiency on the platform based on grocery patterns.
Hometown Foods (which owns Pillsbury among other baked goods brands) worked with the shopper data company IRI last year on a marketing overhaul, and determined the company was losing market share in terms of ecommerce and online grocery orders, said COO Dan Anglemyer (the former marketing chief).
Hometown’s marketing review led the company to Instacart, after checking out practically every grocery ad platform on the market.
“We wanted to have the ability to flexibly test and learn,” Anglemyer said. Hometown Foods was a pilot partner in Instacart’s Optimized Bidding product.
But Instacart’s young platform comes with more controls the brand needs. The big one is margin management and the ability to target a particular return on ad spend, according to Anglemyer.
Other large retail ad platforms have “prohibitive” minimum spend commitments, he said. “It seemed like they were trying to lock us into a number and the results be damned.”
Hometown found that Instacart’s bid optimization wasn’t working for its small regional bakery brands, which couldn’t get ahead of larger brands despite its marketing spend. A big retailer is going to continue pushing that spend regardless of the margin management and outcomes. So instead of sinking wasted dollars into those brands, with Instacart, those dollars are moved to other products or search terms that do meet the brand’s targeted profitability returns.
“We wanted to pour more gas on the fire, in terms of investing in ecommerce sales,” Anglemyer said. “But we wanted to do it with a high degree of certainty that it works.”
