Instacart, the popular online grocery shopping app, has reported an impressive 18% increase in ad revenue, reaching a total of $871 million in the final quarter of 2023. This growth in ad revenue can be attributed to the success of Instacart’s shoppable display and video ad formats, as well as effective initiatives that highlight value to advertisers.
The rise in ad revenue suggests that advertisers using Instacart’s ad products are getting good results, making it worthwhile for other businesses to consider implementing these formats into their own campaign strategies. However, it’s important to note that as Instacart gains more popularity, ad prices could potentially increase.
Despite the increase in ad revenue, the advertising and investment rate remained steady at 3.1% compared to the same period last year. This is significant because in the previous year, the rate had increased by 47 basis points due to the introduction of shoppable display and video ads.
Other key findings from the report include a 5% year-on-year growth in transaction value, with a total GTV of $30,322 million. The number of orders also saw a modest increase of 5%, reaching a total of 70.1 million. Additionally, total revenue for Instacart was up 19% year-on-year, representing 10.0% of GTV.
In terms of profitability, Instacart’s GAAP gross profit was $2,278 million, up 24% year-on-year and representing 7.5% of GTV and 75% of total revenue. These figures highlight the success and efficiency of Instacart’s business model.
Fidji Simo, Chief Executive Officer of Instacart, described the platform as “the best advertising platform,” emphasizing how customers rely on Instacart for large basket orders while brands use it to connect with high-intent customers. Simo also highlighted the platform’s ability to deliver a sales lift for brands and the importance of using data and insights to build a retail media network.
In conclusion, Instacart’s impressive increase in ad revenue, along with its steady advertising and investment rate, demonstrate the effectiveness of its ad formats and initiatives. Advertisers can leverage Instacart’s platform to connect with high-intent customers and achieve significant sales lift. As Instacart continues to expand its reach and partnerships with companies like Google, The Trade Desk, and Roku, brands can expect even more performant and targeted campaigns across various channels.
