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But given how intertwined ad growth is with its grocery business, Instacart can鈥檛 afford to stop investing in the latter.

Walmart and Instacart are replicating this as they scale their retail media businesses. Streamers embrace ads. Netflix and Disney+ recently unveiled their own ad-supported tiers. Spotify ads are beginning to scale.

Instacart, DoorDash, Uber, and Shipt have partnered with hundreds of retailers to offer same-day delivery. The bulk of these partnerships are in the grocery and convenience categories, but the delivery platforms also work with retailers like Bed Bath & Beyond, Best Buy, Lowe鈥檚, PetSmart, and Sephora.

Personalize: Instacart uses natural language processing in its Ask Instacart search. A user can type in something like 鈥渨eeklong meal plan for a family of four on a $200 budget鈥� and be given a personalized shopping list.

Instacart paints a not-so-pretty picture. In January, a user on the Instacart subreddit noted that the images Instacart was using alongside some of its recipes were a bit strange. One image showed two cooked chickens conjoined at the shoulder. Another featured a hot dog with the interior texture of a tomato.

The integration then generates a shopping list, which can be purchased via Instacart. Kayak works with users to plan trips using natural language questions and offers recommendations for flights, hotels, and more. Klarna has a plug-in for shopping, which gives consumers recommendations based on their product preferences and budget.

While on-site spending, particularly on-site search, still represents the defining ad format for this channel, much of our upward revision can be attributed to boosts in off-site spending, thanks to partnerships between retail media networks (RMNs) and other powerful ad platforms: The Trade Desk partnered with Instacart, for example, and Walmart joined forces with NBCUniversal to incorporate retail media-powered

The Trade Desk and Instacart. Ad tech company The Trade Desk and grocery intermediary Instacart teamed up in October to improve the latter鈥檚 retail media offerings through improved metrics. Why it works: Retail media data is in demand.

Instacart will go public鈥攁nd prove itself as a competitor in the ad space. Despite the fact that everyone expects the markets to struggle in the first half of the year, Lipsman predicts Instacart will file its IPO. Once it does, expect some big wins for the company. Specifically? The delivery company could try to solidify its ad business by partnering with NBCUniversal and Shopify.

Braintree, for example, is focused on ticketing and tied up with Live Nation, whereas Adyen partnered with Instacart, which could offer inroads into online grocery.

Instacart added more discounting and price-centric features, including a 鈥淪tores to Help You Save鈥� section that helps consumers find value-driven retailers that offer in-store perks. It also added the ability to apply merchants鈥� loyalty programs via shoppers鈥� Instacart accounts, targeted sale offers based on their previous purchases, and discounts for larger purchases.

Instacart. Why: Using its retail media data, Instacart is helping its advertising clients expand their reach and achieve more precise targeting on Google ads, Feger said. 鈥淚t鈥檚 a really smart retail media play.鈥�. What鈥檚 interesting:. Instacart is also testing ads on its AI-powered smart shopping cart, which will promote products, brands, and deals based on the real-time contents of the cart.

Instacart is also a contender, with 21.9% of US grocery ecommerce sales. Amazon hasn鈥檛 shied away from the category since starting its limited-service grocery delivery service, Fresh, in 2007 and acquiring Whole Foods Market in 2017, and for good reason: The retail media potential is massive.

Retailers can leverage companies like Instacart and DoorDash to offer consumers quick delivery. The big takeaway: Target is demonstrating confidence in its strategy, despite several near-term headwinds.

Target last week announced plans to invest $100 million to expand its network of sortation centers to speed up and lower the cost of delivering online orders, Shopify recently rolled out its own Shop Promise service that guarantees next-day and two-day delivery, and companies like Instacart and DoorDash are helping an array of retailers offer consumers quick delivery.

This move follows a period of limited but significant tech IPOs, including semiconductor designer Arm and Instacart, which began trading today. Klaviyo gets significant recurring revenues from Shopify, which owns roughly 11% of its shares, according to Bloomberg News.

But in 2023, three very different retailers鈥擶almart, Instacart, and eBay鈥攚ill each generate more than $1 billion in ad revenue. But the rising tide is lifting the bigger boats higher. In 2019, retail media ad spending on all retailers besides Amazon, Walmart, eBay, Instacart, or Etsy accounted for 16.8% of US retail media ad spending.

When encouraging app users to join its workforce, Instacart used a 鈥淲ork for 滨苍蝉迟补肠补谤迟鈥� ad that went to a quiz to help prospects learn more and provided Instacart with insight about those considering the job. Quiz questions included 鈥淲hat are you looking for in your next role?鈥� with 鈥淚 want to make extra cash鈥� as a response for users to rate on a scale from 鈥渟trongly disagree鈥� to 鈥渟trongly agree.鈥�.

Look for Instacart to ink major CTV partnership鈥攑ossibly with Microsoft. Instacart has fallen behind its peers in the CTV realm, but the company could become the CPG data source for Xandr and its in-game advertising portfolio. Walmart and Kroger will tighten closed-loop reporting on CTV ads.

The big takeaway: In relatively short order, Instacart built a massive retail media business that鈥檚 more than a quarter of the size of Walmart鈥檚 advertising business. That enabled it to operate with a take rate that鈥檚 significantly lower than similar companies such as DoorDash and Airbnb. The company needs to walk a delicate line as it continues to build its retail media business.

That鈥檚 why DoorDash offers DoorDash Drive, Instacart offers Retailer Storefronts, and Uber Eats offers Uber Direct. Nearly every platform, including Gopuff, has also leaned on retail media to boost the bottom line. The big takeaway: It makes sense for a company like Gopuff to diversify its offerings. Still, the long-term viability of the company鈥檚 model remains a question.

Number three, Instacart. We're still on the retAIl media trAIn Instacart's on here for adding shoppable YouTube ads and for a partnership with New York Times cooking, Instacart has one of the biggest retAIl media networks in the us. YouTube has one of the biggest CTV audiences, so the match more shoppable ads, it makes sense. We're seeing more and more offsite retAIl media.

Instacart: The grocery intermediary remains one of the largest US RMNs. Instacart鈥檚 US retail media ad revenues will hit $1.01 billion this year, up 16.1% from $0.87 billion in 2023. PubMatic announced a collaboration with Instacart earlier this month, which will leverage the platform鈥檚 first-party data for programmatic ads.

Still, the lure of lower advertising costs at competitors like Walmart and Instacart isn鈥檛 moving the needle much on Amazon鈥檚 overall share of retail media spending. The retailer will account for nearly three-quarters (74.2%) of US retail media ad revenues this year, helped by its push into ad-supported streaming. Go further: Interested in assessing more Amazon advertising metrics?

Article: Instacart dominates grocery delivery, but Uber and DoorDash are catching up. Article: How Amazon will transform the advertising industry in 2023 and other highly specific retail predictions. Methodology: Data is from a August 2022 Nielsen IQ analysis. Nielsen IQ tracks aggregated and anonymized data from email receipts from a panel of over 5+ million online shoppers.