As a part of the WARC x Spotify report, Laura Jones, CMO of Instacart, speaks on balancing Instacart’s roles as a brand advertiser and advertising platform, fine-tuning Instacart’s growth marketing machine, and leveraging audio’s storytelling advantage.
Read the whitepaper 'Sonic boom: How digital audio can help Retail and CPG brands win the path to purchase' here.
There have been several changes in the marketing landscape over the last five years. Which changes have had the biggest impact on the retail sector from a marketing perspective?
Totally agree, there's been a ton of change and innovation from both the technology and marketing standpoint over the last five to ten years. It's really due to changing consumer behavior. So obviously, we're almost a decade into the cord-cutting phenomenon, and watching folks migrate en masse from linear TV to social and digital channels to viewing more on mobile, and you have this resulting fragmentation. You have consumer attention fragmented across TV and all the different streaming platforms. And then all the other channels as well social, digital, audio, etc. This has created a world of performance marketing, and an opportunity for all of us as marketers to shorten the funnel and to have better measurement capabilities, but it's also made our jobs harder. And certainly, I think marketing has never been more complex than it is today.
That complexity is only going to increase. But on the flip side, as much as the channels change and fragment and evolve, the marketing fundamentals really don't change. That's this idea of having a really clear core message, having the brand be something that's consistent and reinforced over time, and really leveraging that continuity and constant centerpoint of the brand; and then using all these channels as a way to augment and evolve the story around that. As much as everything changes, everything also stays the same. It’s balancing that consistency and that evolutionary growth mindset to get you to that long-lasting thriving business.
It’s interesting to see the new landscape pushing marketers back to the basics. You mentioned there’s a balancing act to that. Marketers are facing a challenge of ‘balance’, whether it is about reach versus relevance or balancing new and emerging media channels. How do you identify optimum balance at Instacart?
It’s something we have an active discussion about daily – about where to push from a channel standpoint. Zooming out, the channels and tactics a company pursues really depend on the life stage of the brand, and the specific KPIs a given company is trying to achieve. When you’re in the early stages of brand building, oftentimes you’re looking to drive mass consumer awareness. You will go with bigger campaigns to leverage high-reach mass channels, like OOH, linear TV, high concurrent viewing events, and maybe even a Super Bowl commercial. You’re also trying to reach new users with channels like social and digital.
What we're starting to see for ourselves and for our CPG brand partners is that it's really a combination of that upper-funnel brand building with having the ability to dial into specific digital channels. We’re getting that reach and influence layer with also a more targeted ability to shape consumer behavior at any given stage in that purchase funnel.
We focus a lot right now on channels that might have historically been considered brand awareness channels, and we have been over the past year or so. But we're also really focused, as you might imagine, as most tech companies are – on measurement and targeting, so we're also leaning into programmatic capabilities. You’ll see us heavily investing in performance marketing channels like OTT, YouTube, streaming audio, and more.
So, again, we’re balancing that objective of getting the word out while continuing to build awareness, while also having a really hard-working mid and lower funnel where we can target, track, and optimize.
As the customer journey gets less linear, do you think that the concept of a marketing funnel is as relevant as it used to be? How do you think that evolution is changing as the awareness and purchase moments grow closer and more simultaneous?
It's still extremely relevant. Putting on our hat as an advertising platform, we've invested in the last year in building out a more full-funnel suite of ad solutions. Historically, we've been strong on that point of purchase, but we realized that at the exact moment you’re about to click is not the only moment a decision is being made. It might be the minute a decision is being executed, but there is a ton of preference, thought, habituation and influence that has occurred prior to the moment [the consumer] makes that ‘add to cart’ click.
As a brand advertiser and as an advertising platform, we believe in the full-funnel. I agree that in some cases it may be shorter or longer, but the idea of making a decision that's informed by multiple factors is mostly just human nature.
As a platform, we’ve been investing in this kind of full-funnel ad product suite. Today, we partner with more than 5,500 CPGs on our platform, to include everyone from the big category leaders to emerging brands. Why do they come to us? It’s about scale, reach, retail partnerships, direct path to purchase, and closed loop insights. When you think about all those through a full-funnel lens, you see the power of the Instacart ad platform, especially in terms of insights. It’s not only about focusing on that last click, but also starting to build more inspirational content mid-funnel that allows us to introduce consumers to new categories, brands and products.
In doing so, we use creative and engaging new formats like shoppable video, and then use a closed loop tracking ability within our platform that helps advertisers understand how effective those ads are at every stage in the funnel. Some of the full funnel products that we've launched in that inspirational, discovery-driving suite are things like pop-ups, shoppable display, and shoppable video. We love getting to watch our advertisers bring the best of their storytelling to our platform, and see how that inspiration does then drive conversion and results in the lower funnel.
These newer ad products compliment sponsored product, which has been Instacart’s bread and butter to date by offering premier digital shelf space to CPGs. That’s how we got into create an advertising platform, but you can see how that format complemented by a fuller suite enables CPGs to reach new and existing consumers across the entire shopping journey.
Let's talk about metrics. What are the most important KPIs for Instacart, and how do you measure media channels’ contribution as you select them?
We just codified our marketing mission for the first time ever – it is to deepen connection, delight people, and drive demand. In 2022 we were really focused on accelerating growth, and so our team owns that metric and is focused on how to continue to accelerate growth quarter over quarter. We’re looking at elevating the brand by leaning into muscles like co-marketing, B2B marketing, and marketing to our Shopper base. Last year was very much about building that growth machine and having those levers available to pull, knowing what different channels profiles look like for us, etc.
In 2023, we're now in an uncertain economic climate, so our goal is to drive the brand and the business forward despite a possible recession. We’re focusing on marketing efficiency. We built this growth machine and now we need to tune that machine to unlock the next frontier of performance marketing. We’re doing that through the lens of segmentation. It’s about understanding who our different customer segments are, what will resonate with them and how to tailor our media and creative approach for each of those unique audiences.
To shift gears, let’s talk about your media hierarchy. You’ve been leveraging digital audio. What led you in that direction? What do you see as digital audio’s particular strengths?
Digital audio’s biggest strength is its audience scale, followed by strong consumer engagement. It's a channel that even, on a personal level, really resonates. I’m a huge podcast consumer, huge consumer of streaming music. So I was excited to take the brand deeper into that area this year.
It’s a great format for its storytelling ability and the nimbleness it offers. It’s much easier to produce and iterate for audio – so a lot to love there. 2022 was our first foray into digital audio. Taking off from our The World is Your Cart campaign starring Lizzo, we built a whole universe of content that hinged around the insight that every cart tells a story. We wanted to find media platforms that could help us tell stories about what people are putting in their carts and the world of possibility it opens for them.
We took a multi-prong strategy for the audio program and bought streaming audio programmatically in partnership with Spotify and other streaming audio partners, and also started actively testing different strategies for podcasts specifically. We had two different strategies: one was programmatic dynamic ad insertion across podcasts networks and shows – going for volume, and the second was a more focused strategy of host-read podcast ads which targeted specific audiences. We wanted to test if that broader programmatic approach or more personal targeted strategy worked best.
The great news is that we saw both strategies worked really well. Fast forward to today, and now we're trying to align the creative messages with the specific audiences and match the affinity and demographic level content across campaigns. We’re in earlier stages than other channels, but digital audio is an area we are excited about.
Podcast consumption is on the rise. Do you think that presents a different opportunity for marketers than streaming music?
Our host-read ads for The World is Your Cart campaign really broke through and got a lot of anecdotal mentions from friends, colleagues, and even within our C-suite. People would say “Oh, I just heard Instacart on this podcast”. And I would have to say “yes, because we paid for that”. There’s something that feels a little more organic and personal, especially because people associate so strongly with their podcasts in a way. So then, when you do show up and you find that right podcast for your ideal audience, there's something really delightful and organic. It’s akin to social when you find the right influencer or somebody that's really a trusted voice. It can be really powerful. So that's one where I'm personally excited to do more and I do think there's kind of an emotional resonance in podcasts that may be undervalued.
Digital audio commands a high share of consumption among consumers, but a relatively low share of media spend. From a marketer’s perspective, what are the main reasons for this?
Historically it has lagged behind, but we’re seeing it catch up.
One of the main reasons it lagged was its low ability to measure effectiveness on these platforms. But there are major improvements in the sophistication of both streaming music and podcasts that enable measurement tooling and targeting capabilities. Dynamic ad insertion is a huge step forward, for instance. You also have to think about ad frequency, different demographics and psychographics by category and different formats.
We have taken a portfolio approach by thinking about the types of audiences across the major networks – Pandora, Spotify, Sirius XM – with buys across a lot of them and comparing the results and where our work is resonating.
Zooming out, it’s a big opportunity. Looking at a 360-degree media mix, this is an area we’ve historically underinvested. It’s multisensory, it meets customers where they are, and it’s a great storytelling tool. Plus, it’s versatile. It’s a great way to influence customers and land the story that Instacart can make their lives easier. Especially when you think about that kind of persona of an Instacart customer, that busy person who is consuming audio on the go, it’s a nice fit from an audience standpoint.