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Instacart is moving into digital advertising

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The popular grocery delivery service Instacart aims to expand its business by selling online advertising in addition to allowing consumers to forgo heading to the grocery store.

As reported by the Wall Street Journal, the company has hired veterans from Facebook and other tech giants as it works to develop advertising platforms for video and other services. The move comes at a time when its biggest customers, Walmart and Kroger, are also trying to tap into the multi billion digital advertising business.

Back in July, Instacart appointed board member and former VP and head of the Facebook app, Fidji Simo as its new CEO. At that time, Simo said that the company has such a big opportunity in the digital advertising space though “the challenge is executing fast enough to capture it”.

According to Simo, Instacart's specialization in groceries could provide the company with a strong position in the consumer-products advertising space.

Digital advertising push

Instacart sees advertising as a way to boost sales and deepen its connections with users according to executives from the company that spoke with the Wall Street Journal.

Last year the company's advertising business was able to generate around $300m in revenue but by next year, Instacart wants to increase this figure to $1bn.

According to Simo, the company views advertising as a service well-suited for grocers that don't have the capabilities to build their own tech platforms. However, selling ads is also a way for Instacart to offset the rising costs of delivering groceries at a time when both food and gas prices are increasing.

The company first began investing in advertising back in 2019 when it hired a former executive from Amazon. Now though, Instacart's main focus is search advertising where brands pay to be prominently features at the top of the results on its app or website.

We'll have to wait and see whether or not the company's push into digital advertising is successful but at the moment it appears that Instacart is taking the right steps to expand its business beyond grocery delivery.

Via Wall Street Journal

Date

07 Sep 2021

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