Brands are spending more on Instacart advertising and are achieving greater advertising efficiency, according to the latest data from e-commerce advertising and intelligence company, and WARC sister company, Perpetua.
Attributed advertising spend on Instacart rose 30% in Q3 2021 compared to the previous quarter while the average return on advertising spend (ROAS) rose by 12% to reach $2.70. With ROAS growing and the cost-per-acquisition falling (down 9% to $1.77), advertisers have seen greater efficiency with their investment.
While the average conversion rate did fall in Q3, down 7% to 71%, a steeper decline in the average cost-per-click allowed for better returns.
However, Perpetua anticipates Q4 to see a rise in the cost-per-click and a decrease in ROAS as advertisers execute a more aggressive strategy in the holiday season.
While competition is intensifying, larger basket sizes have created an opportunity for brands to promote increased purchase quantity. However, as vaccination rates differ across the United States, hybrid buying is the new standard for grocery shoppers and brands will need to recognise this.
For Amazon, the latest report from Perpetua also shows that advertisers are spreading their budget across more upper-funnel activities, with Sponsored Brands video continuing to be one of the most engaging ad units.
Advertising costs on Amazon are also continuing to rise, with the CPC for Sponsored Products and Sponsored Brands (excluding video) increasing by double-digits year on year.