← The CPG Guys
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- [00:00]
A
Hi, I'm Tim Castelli.
- [00:01]
B
And I'm Allie Miller and we're from Instacart. And you're listening to the CPT Guys podcast.
- [00:09]
C
Welcome to the CPT Guys podcast. Your host Shree Rajagopalan and Peter Vs Bond explore how brands and retailers engage consumers in an increasingly digitally driven world. And now, here are the CPG Guys.
- [00:28]
D
Hello and welcome to this episode of the CPG Guys podcast. I'm of course Sree, your co host and also CRO and co founder of Think Blue Consulting, your trusted partner in your omnichannel development journey. Get in touch with me at sri thinkblueconsulting co. That's co naught.com please do listen to my older daughters music@www.riaraj.com and follow Lara Raj, my younger daughter, as a member of the world's fastest growing, now acknowledged as the Superpower band, the number one girl band in the world, Cat's Eye. I'm of course joined today with my co host and sidekick, Mr. PVSP who also moonlights his head of industry and client engagement at Flywheel, the commerce acceleration division of Omnicom. This is like the third or fourth time we're actually live today. Peter, how you doing?
- [01:13]
C
Sree, here's my question. What credible news source says that Cat's Eye is the definitive ban? It's not.
- [01:20]
D
I am going to forward it. I'm going to forward it to you today. It's already public.
- [01:24]
C
No, no, I know who, but I want you to tell, I want you to tell our audience what credible news source said this.
- [01:31]
D
Oh, now he wants me, now he wants me to Bloomberg.
- [01:33]
C
There we go. Can you believe that? Like, because when I think, when I, when I think of entertainment credibility, I don't think about Hollywood Reporter. Forget Variety. I go right to Bloomberg because that, that's where I source money.
- [01:48]
D
Money, money, money.
- [01:50]
C
Seriously though, Sree, I'm just, you know, I'm just teasing. I'm really proud of you. My 6 year old isn't a pop star yet and, but I, but if, if they do grow up to be pop, if she does grow up to be a pop star, I want it to be like your two daughters because they love their daddy and you've instilled in them incredibly good value.
- [02:10]
D
We're no longer going to talk about the daughters. We're going to say follow Shri Raj on TikTok. The handle is Shree Space Raj.
- [02:17]
C
Shouldn't you be changing that? The paparazzi at TikTok, isn't that what they call you now.
- [02:22]
D
How do you know? How do you know it won't be some point? It may be. And then likewise, let's help people who follow the Instagram as well. That's Sriraj La.
- [02:31]
C
We don't even, you know, SRI don't even have to bring our guests on.
- [02:33]
D
We're just gonna just Talk Instagram and TikTok all day long. All right, man. How you doing, though?
- [02:37]
C
It's good to be with you. I'm doing great, man. I'm, you know, it's Monday. I've got a lot of stuff on the docket. We've got big events coming up. We've got grocery shop, we've got CRC E Commerce summit. We've got, I mean, it's just so many different things going on. I've got an emarketer event. I'm going to see our friend Sarah Marzano this Thursday in New York City.
- [02:59]
D
I'll be with Epsilon for the client, the annual client engagement. So looking forward to that.
- [03:07]
C
We're hot tickets, we're in demand. This is good. Of course we don't let it, you know, but the good thing is sri, the CPG guys don't let it go to their heads. They certainly don't talk in the third person, you know, who's the CPG guys?
- [03:20]
D
I love an intro. But in any event, folks, we'll ask that you subscribe to our podcast on your preferred listening platform where you can get to our latest episodes and even go back to consume some of the 500 plus episodes we've already published today. We're pleased to have with us guests that we've been planning forever to be on the show and let it be declared, this is take two, because take one, I failed and lost power and made them wait forever. So we're lucky that they've given us time quickly to be able to reschedule the actual episode with us. And it's none other than our friends from Instacart. We're thrilled to welcome Ali Miller, General Miller, General Manager of Advertising at Instacart. I'll do that again, Brandon. Today, we're thrilled to welcome Ali Miller, General Manager of Advertising at Instacart. Ali is driving the strategy and innovation behind Instacart's advertising ecosystem, helping brands connect with consumers across the entire grocery journey from discovery to purchase. With a background that includes leadership roles in both product and digital advertising at Google and now at Instacart, Ali brings a powerful blended tech acumen, shopper insight and product innovation to the table. We also Have Tim Castelli, who I met week one on his job at Instacart, I think at Possible Miami a while ago. Vice President of Global Advertising Sales at Instacart. Tim brings a powerhouse background in media leadership centered places like iHeartMedia and AOL, a brand that Peter loves. Now he's helping lead the charge at Instacart as they helped build one of the most dynamic closed loop retail media platforms in the grocery space. I also want to congratulate them both part of Instacart. They just announced awesome results as part of their public quarterly earnings release. So congratulations to Team Instacart and to the both of you. Ali, Tim, welcome to the podcast. How you both doing?
- [05:08]
A
We're doing great. Thanks guys. Thanks for having us on. Super excited that we finally made this happen. Even though, even though we lost power last time we tried retry this, but thank you.
- [05:17]
B
Likewise. Very, very happy to be here. I'm so happy that try number two is working out so far. We'll cross our fingers.
- [05:22]
D
Go. So we're excited to have you on the podcast. Needless to say, we'll include in the digital show notes of this episode links to your LinkedIn profile respectively, and of course that of Instacart. So I'm going to jump right into it. And Ali, let me shoot the first one over to you. Instacart, of course, has been rapidly expanding its retail media capabilities. I've sat on your client advisory board. Kind of been able to run the race with you for over a decade at this point. What's the vision you're crafting for Instacart today? In the next, let's say three years or so?
- [05:52]
B
It has been awesome to go on this journey with you and many of our brand partners. So probably no surprise, I'm going to say the future of what we're driving toward is an omnichannel future. So we all know that retail media had this incredible rise over the last several years and now we're getting to a point where retail media is not just about advertising on an E commerce site. It's about a capability that can really connect advertising across, you know, the connected TV streaming platform that you're watching to all of the browsing you're doing on social with Meta and Pinterest and others. And then of course actually interacting and buying products on an E commerce site. And then finally we know that a lot of commerce activity is going to continue to happen in the grocery store. So we're really focused on using our data, using our first Party data and our commercial insights to connect that journey. Both for consumers who can get products that they love into their hands within an hour or less with Instacart, and also for brands who can help to drive more of those outcomes that are valuable to them, but also measure them in a consistently across all those channels.
- [06:53]
C
Tim, welcome to the CPG Guys podcast. My question to you. First two questions. First one, and this is in light of the fact that your old employer AOL announced that they're winding down their dial up service. How many tens of thousands of CD ROMs do you have in your garage and do you use them for coasters?
- [07:12]
A
I can either confirm nor deny that, Peter. But they do. But they do make a nice coaster.
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C
They absolutely do, don't they? All right, so now for my.
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A
Were you one of those last dial up? Were you one of those. Hold on.
- [07:24]
C
They're gonna be something someday. They could be worth at least 20 cents on a marketplace.
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D
Let it be revealed. My first job from college was actually at America Online. This was a dial up 28.8k modem days.
- [07:39]
C
One day he worked one day.
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D
I wanted to work in Reston, Virginia.
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B
For one day, but what a day it was.
- [07:47]
D
Wish I had cashed out on the stock.
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C
It heralded the downfall of that fair company. I don't know. Sri. All right, so Tim, here's actually my question. I'd love to hear from you how you see Instacart differentiating its retail media network from others in what is an increasingly crowded landscape.
- [08:10]
A
Yeah, it's a great question. We get that all the time. So the way I would answer that, Peter, first and foremost, I tell people we're not a retailer. That's the first thing to understand about Instacart, which some people get confused. Right. Well, we're very much what we are. Is a technology company, grocery technology company, or a retailer enablement company. Right. So our mission is, can we provide technology products and services to allow retailers of all sizes, not just the big guys, but of all sizes, to participate in this e commerce trend? Because consumers want to shop where they want to shop and if we can allow them to participate, from big guys all the way to mom and pops, that's a role we play as a platform that is incredibly valuable. And if we do that well, we'll get millions of people to use the platform and shop for their groceries and wherever they want on Instacart. And if we do that well, we'll get thousands and thousands of brands to want to influence what goes in those baskets. Right at the point of purchase when they're searching for those products to drive incremental sales and share. And that's really what makes us different. So we built what we think given the trends that are happening. This growth in E commerce, this proliferation and complication of retail media networks and the increasingly demand increasing demands of of consumers. Want it now immediate and get inspired anywhere. We built this Instacart ads ecosystem we call. There's a couple different parts. We're up to 1800 retailers and counting on the marketplace, 100,000 storefronts and moving. So your ability to access all of these retails from one place. We then have taken that technology and extended IT across over 240 owned and operated other retailer and grocery sites. The power the ad experiences across there places like Thrive Market and Hy Vee and other others. So now from one place you can access all of these consumers. And then because we know it's not all online, a lot of it's still going to be in store. About three years ago we invested in a company called Caper, an AI smart shopping cart location aware bring your everything we love about online shopping into the store in real time and across one place you can access all three of those and then all of that is tied together by an incredible set of first party data. A unique digital first E commerce buying signals, very high fidelity data that now marketers can use to power their off platform marketing to make it more performative and it all work together and all drive back in one closed loop system again to drive incremental scale share and sales for our brand partners. So I think that's a unique proposition Peter, that because again we're a marketplace view and not a single retailer view that really helps us stand out in the market today.
- [10:52]
D
Wait, Peter, I'm confused. I always thought Instacart was a retailer man. Just kidding, just kidding. It cannot be more clear that Instacart is not a retailer. But in any event, before I flip over to the next question for Ali, I'd like you as well Ali to chime in on that very question. You know, with the lens that you wear, which is slightly different from that of Tim's because as the GM of advertising, how do you see Instacart as differentiated in retail media network?
- [11:22]
B
I mean a lot of it is indeed building on what Tim said. I completely agree that because we're not a retailer, it's really allowed us to take to heart this idea of retail, of Instacart being a retail enablement company. So we are Looking to power every grocery transaction. We don't mean to own the inventory. We're not trying to gain leverage by being a retailer or anything along those lines. We are really set up to drive performance and in particular we're set up to drive performance across a pretty dissimilar set of retailers. You have very large retailers, you have your local independent grocers and pretty much everything in between. And so that has really required us to take a different approach and think about how we can best match the right experience at the right time for a consumer to discover what they're interested in and also to drive that value for brands. And, and so I think that's really shaped our approach from day one. We can't just sort of rely on a traditional kind of in store model. We need to think differently. And I think that's led us to this view that we can not only create this great retail media network or commerce media network, maybe I should say on Instacart itself, but to Tim's point, we can power the commerce networks of 240 + retailers and e commerce partners that we're working with and extend that model even beyond Instacart as well. So I really love that. That's what really motivates me is that we can take that approach of really growing the pie for any retailer who wants to play in this ecosystem without contributing to the fragmentation of tooling or the fragmentation of technology that can be increasingly hard for brands to manage. So I think that that's a really exciting moment that we're living in right now and a great way that, that our whole team is thinking about really expanding Instacart's role in this space.
- [13:00]
D
And Ali, as you double down that very expansion, I have to ask the buzzword of the year, but also probably one of the most important words of the year, which is artificial intelligence. Now that would be cat's eye. But what role does artificial intelligence or machine learning play in Instacart's ad platform today? And I'm careful to distinguish between AI and machine learning. And how do you see that evolving as you do your three year outlook?
- [13:29]
B
Yeah, it's played a huge role in our platform for the beginning and it actually just goes back to what I was mentioning around that pretty dissimilar inventory and that huge number and spectrum of retailers that we work with on our marketplace. So from the very beginning, we were never in a position to kind of manually curate exactly what appears on the Instacart marketplace. And especially now that we're now that we're up to 1800 retailers that we work with. So from the very beginning we took a highly optimized and machine learning based approach to how we built our ad serving, how we build tools and capabilities for advertisers. Sri, you probably remember, I think you in your previous position were one of the first to use our optimized bidding platform. So this is all about give us the goal that you want to achieve. In this case it was target return on ad spend to drive maximum sales. And we can do all the work behind the scenes to just achieve that outcome across whatever inventory is going to help drive it. And so we've taken that approach and we've really built on that to support more types of outcomes. So for example, driving new to brand sales and now we're experimenting with driving launch velocity of new innovation products that are being launched by cpgs. And so this machine learning forward approach has really in my mind allowed us to focus on driving the outcomes that matter and not necessarily the manual work and tools and kind of, you know, day to day management that's going to help to correspond with those outcomes over time. And so that's really been in our DNA from the very start. And this extends across the consumer experience on Instacart as well, of course, which is highly dynamic and highly personalized. The thing I like to add to that point as well is we work of course with CPGs and brands of all sizes and so that includes smaller brands that are looking to break through. So when you're looking at helping to build that kind of eye level visibility for an emerging brand, it's really great to be able to focus on what might a consumer be interested in at this moment and can we help an emerging brand meet that moment in addition to an established brand to help really everyone play on this level playing field. So I think that's really the machine learning side of it in a nutshell. When it comes to generative AI, in some cases it can just take that approach and make it all the more personalized and all the more dynamic and more conversational for the user. And so we've really focused on threading generative AI throughout the full Instacart experience. So for example, curating very human sounding kind of, you know, carousels that you can explore, like snacking for your hike this weekend or something along those lines that in previous worlds would have taken a human to curate every single one of those. But we've also really focused on tools and capabilities for brands so we can save again more time and help them focus on the outcomes that matter. So for example, we've used generative AI to automatically create landing pages, pages for display ads that can help to save a lot of time but also drive incremental sales. We're working on using generative AI to balance how budgets can be delivered and optimized across multiple ad formats. So sponsored products and display together with universal campaigns and we're seeing that that's actually really also driving additional new to brand sales and additional outcomes for brands. So there's a number of areas where we're focusing on using that technology to really drive those time savings and drive those efficiencies for brands. And, and we're going to continue to develop recommendations and tooling and all of these other ways where the technology is not just a means to an end by itself, but it's really trying to further those goals for brands.
- [16:49]
C
Cherie, I just realized we've been a little remiss in acknowledging and thanking our friends from Instacart for being the principal sponsor of last May's Retail Media Strategy Exec Ed program that we co produced with Cornell. It was a big deal. Instacart was phenomenal. Sent three people to the event. By all accounts, everybody was happy with it. And Cornell's already asked us to do it again next year. So Tim and Ali, on behalf of the CPG guys in Cornell, thank you.
- [17:21]
D
I want to call out ABHI Jain's role as well. Measurement. I thought he crushed it. It wasn't me saying it, it was the attendees saying it. So there you go.
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A
Awesome. Peter. We were psyched to participate in. So thank you for partnering with us on that as well. And I'm glad you guys are doing that to you know again that there's those type of thought leadership events to help move the whole industry forward. So very, very excited you guys are doing that 100%.
- [17:45]
C
I remember Tim, when Sri and I met with you, I think it was at CES and discussed this opportunity. You're like this, of course this is in line with what we want to do. So good stuff. All right, Tim, question for you. How are CPG brands using Instacart ads to drive full funnel?
- [18:09]
A
Great question. So first and foremost, there is probably a little bit of misperception that retail media is lower funnel only and people think of it first and foremost that way. And with good reason. Right. A huge part of our platform is performance based and it drives outcomes. Whether it depends what outcome you want, whether it's your focus on the brand or you focus on Driving sales and share and that'll continue to be a core part of it. But if that's all you're using it for, you're probably under utilizing the capabilities. Over the past two years Allie and her team we have had tremendous innovations in driving experiences for brands and mid and eventually full funnel. So over the last two years we've launched things like shoppable display and Shoppable video to great success and driving new brand metrics and driving overall brand metrics which eventually drive more sales. Recently we've also introduced these inspiration ads so shoppable recipes. That's been a big piece of feedback from our brands to be able to actually use the content and make them shoppable and thrive because that's how people, you know, shop and making meals as well as occasions and other where you can actually do cross aisle merchandising things you can't do in a physical store that we can put together in different types of products in an ad for a specific occasion or a use case and that's been great. And then over the last couple years we've really I think evolved something maybe the media business, something I did in the in a former life growing up in the media business. This co marketing where you're pulling brands into what you're already doing as your marketing. The super bowl was a huge example of that. A huge home run for Laura Jones. Our CMO and her team developed this fantastic ad including all the brands and then we created all this ancillary content with those brands and craft came in in a big way. We created new programs and included in draft that off to really Dr. Drove goals and doing more of that kind of stuff. And we've done kind of custom programs and creative programs with folks like Molson, Coors and Pepsi and Kraft, Heinz and Purina for Pet Month etc so doing more of that than all drives. And then we can measure an outcome again not in a specific retailer but across a marketplace. And then probably the largest all the way full funnel example is again back what we talked about a little before. Using our first party data to power your off platform media, your ctv, your olv, your own broader web. But then be able to transact or pass conversion data back or point it back and show are we accomplishing the goals, are we moving product, are we driving a marketing outcome for you? Not just an E commerce outcome. I think that's when people start thinking about us that way from straight search all the way through data to tie it all together. I think that gets the to be really Powerful.
- [20:51]
D
Let me remind our audience that we're speaking with Ali Miller and Tim Castelli from Instacart. Ali, what kinds of insights or shopper data do you feel are most valuable to brands? Especially what feedback are brands giving you and how are y' all delivering those responsibly? Also, the latest ask from brands is more transparency. So how are you managing through that?
- [21:13]
B
Yeah, we've gotten a lot of feedback on the insights that we can provide over the years. And just as we've been talking about with that breadth and depth of selection and retailers that we work with, our data is definitely in demand. And we've also been really working on making that more accessible. And I think it's especially important now. I mean, as we all know, consumer behavior is changing on a dime every day. There's kind of a different development in the macro conditions and what we see in terms of consumer consumption. And so having that fresh ability to access meaningful data and take action on that data is more important than ever. And so we've actually been working on exactly that. So, you know, we've been sharing insights over the years with brands, but we're now actually productizing it really in detail for the first time. So we are building what we're calling the Consumer Insights Portal. And this takes all of that rich first party data and it gives it to brands in an easy to use interface where you can get very valuable insights that are derived from the marketplace across those 1800 retailers. But also it's digital first. So we have a lot of detail on what's actually happening in terms of how the consumer decision process is going, how the basket building behavior is being, is being completed by consumers on the site and we're able to provide that again in a very real time basis. So with this Consumer Insights portal, one of the insights that I'm particularly excited about is this idea of substitution behavior. So on Instacart, as you might be familiar, if a brand is not going to be available or products aren't going to be available, you can actually as a consumer say I want this instead or I will accept no substitute or I'm going to go to a neighboring brand or a different pack size or whatever it may be. That's a very unique Instacart insight that we're now able to offer at scale through the Consumer Insights portal. And it's a great way for both brands who are looking to build their reputation, build their distribution, to understand how irreplaceable am I, how can I bring that to my customer to my retail partners to kind of prove myself in that way. And then for larger brands, it's a really important way to stay on top of the competitive set. Of course, again, when things are changing so quickly. So that's just one example of the type of data that we found can be very uniquely valuable and it's something that Instacart can provide because we have that digital first view. So we're continuing to build these out and are really excited about getting this into the hands of our partners. We have partners like Advantage Solutions and Applegate starting to use this already and it's really just the beginning for us. So we're excited to continue to really provide that insight into the details of consumer behavior on Instacart and help brands make more informed decisions, not just across retail media, but across their whole businesses.
- [23:47]
D
And Tim, you're dealing with a lot of CMOs, CCOs, SVPs, of marketing, customer teams from retailers, et cetera. In the last six months I've noticed this trend.
- [23:58]
A
Yeah.
- [23:58]
D
Let's say last year, like incrementality is the word that's kind of stuck. Whether people know what it means or not is debatable, but the ask is certainly for incrementality. Are you seeing, what are you seeing in terms of the asks for metrics and data and things for that nature? Has it changed in the last year? In many ways because of the volume challenges in the industry.
- [24:18]
A
So, so you're exactly right. History, things have evolved like in this, in this over the last two years. I remember when I walked in here, it was very siloed. You had the E commerce folks over here and their budgets and that way they measured success and the way they measured income tally one way. The marketing folks over here, they had a different metrics and different budgets. More and more we're seeing those worlds come together. We're now in meetings with the Chief Commercial Software Commercial Officer and the cmo. They're trying to look at these marketing dollars holistically to drive an overall outcome. So that's, that's coming together and I think that's the Trend Even some CPGs are organizing around that way. And they're all looking for incrementality and growth. Right. And so we've look, we've been on this multi, multi year journey and we feel best in class showing incrementality. We're even one of the first RMNs to be MRC accredited, which was a huge win for us. Right. But really we've been doing for years best in class lift tests on platform People really want to see the power of advertising on the marketplace averaging by the way 15% plus lift when we do those. But then we're constantly looking for ways to provide more data points of incrementality. Every time we bring retailers onto the platform we look at the numbers and they show us and we're showing incremental lift. Customers on Marketplace, on Instacart they didn't see in store their own operated. We're working with Circana and we're doing category studies and brand product studies again and again showing incremental left some 20%, some 50%, some 60% incremental to what they're seeing in store. And then even as we push into off platform we starting to do using our data for people to run their trade desk campaigns or their meta campaigns. You're seeing huge incremental audiences reached using our data and huge new to brand results for brands that are using our data on their off platform media. So we've got to keep getting better and better to service the needs now, both of the E Com and marketing. But overall I think you're spot on this. The brands are starting to look at I have a dollar to spend and how do I need to put that and where I need to put the drive a certain outcome and those silos are being broken down every quarter.
- [26:25]
B
I'll also just add on, I'll add on to that Tim. Actually like really looking at that level of transparency. So as you mentioned we have, you know, for on platform we've really focused on kind of best in class measurement, MRC accreditation, ways to build trust by sharing our methodology, sitting down with analysts at each of our partners and really walking through how we're able to prove that incrementality. But there is of course this role for third party measurement as well and that's where we really leaned in with Circana. And I think there's a good balance of that as we continue to mature in this ecosystem of retail media. And I think we're at that moment now where the standards are higher than ever on on platform measurement. We're going to do our best to keep up with that and continue to try to lead the pack. But then we're also going to be leaning in where that third party measurement can help to tell the story and help to round it out in a way that kind of resonates with our partners and uses those sorts of measurement and providers that they already work with. So that's really been a theme of the last couple of years.
- [27:22]
D
You know I was recently at a panel with a bunch of brands and the number one ask that they had collectively in the state of the industry was better measurement of instacart. So the timing cannot be better because they all said to me our instacart growth and our results is one of the most important things we need to get better at. So it's good to hear. So the next question is for both of you. You've quickly expanded your offering from over the last few years to include ad products like shoppable video, of course display and more recently inspiration formats. So for the benefit of our audience, tell us what's been the reception from brands and shoppers and then can you get in Ali especially you a little bit more into inspiration formats? Tim, let me ask you to go first.
- [28:05]
A
Sure, sure. Yeah. We mentioned a little bit before, right. That has been a huge evolution of just in response to the marketers wanting to do more and inspire consumers, especially some of the kind of mid funnel and drawing some of the brand metrics because it all then eventually drives incremental sales and share. So and what I really, I think using these things like the shoppable display, the shoppable videos, the recipes, what we're seeing is huge new to brand lift people that maybe weren't considering it to bring you new to the brand, new to the category. That's been a real lift. So we're seeing tremendous numbers of new to brand on those both on the display shop of videos. So you're seeing things like Land of Frost saw 57% attributed sales come from neuter brand on a shopable display or a campaign recently. And now you have these sponsored recipes and these inspiration ads that allow you to do out of our across aisle merchandising. You're seeing things like recent snacking brand did 67% attributed sales coming from new to brands. So I, I think it's that combination of how brands use us, that kind of lower and mid funnel together that really helps drive results that the brands are looking for. And Elliot, you know, please add to that.
- [29:16]
B
I mean you, you covered so much. There's very little for me to add. I think, I think the I start talking, I apologize, I'll just add the incrementality to it. So I'll add, you know, particularly on shoppable recipes and occasions. One of the things that we were really thinking about is how can we help to expand consumer intent at a moment that really makes sense to you as the consumer. So if you're doing a search for spinach, for example, if you just saw a pasta ad that might not make a ton of sense to you, but if it's in the context of a spinach lasagna recipe that is run by that pasta brand, that is a perfect moment that now feels like this magical advertisement that just kind of understood your potential intention and then also gives you this great recipe to try. So it's really taking some of those tried and true kind of grocery, you know, at the charcuterie counter or the cheese counter, you always have the olives and the crackers. Like we can do that, but we can do that infinitely across the the digital shelf. So I really love the ability to kind of pair items in a more dynamic way. And brands are responding really well to that idea of reaching consumers out of aisle in a way that really makes sense to them and also helps them to really show what's special about their brand and how to consider, you know, using that brand in a different everyday occasion.
- [30:26]
D
Awesome, guys. So the next one I wanted to ask you was really about measurement and incrementality, because it's top of mind. You guys have already answered that question. But let me ask this question a slightly different way. And that is, if you wore the brand shoes and you had to really report back to your cmo, your cco, your CFO on results for actually working with Instacart, what would you make available to that CFO and say, I am one of your best partners in the ecosystem.
- [30:55]
B
Well, Tim, I can take a first crack at it. I think if it were up to me, I would focus on true causal incrementality for on platform measurement. It's the highest standard of measurement. If I weren't advertising, what sales have I lost? How many sales have I lost? And that's what we're able to do with this digital first environment of taking a random group of consumers and holding them back from seeing those ads and taking the random group of consumers and allowing them to see the ads and then looking at the difference. And so that's truly the outcome of are my dollars driving sales? I wouldn't have gone otherwise. That for me is kind of the baseline. And then beyond that, I would look at KPIs that really matter to the brand. So am I attracting new to brand consumers? Am I attracting consumers to my innovation products, to additional products in the line of, of what I'm offering within that brand? And am I doing that effectively and efficiently? And then beyond that, I would look at some of these surrounding metrics that Tim and I just talked about, like, am I Attracting audiences to buy these products that I wouldn't have via my other channels. That's where the circana data and other types of data come into play. So really, however you slice it, you can look at ad efficiency metrics like roas as kind of barometers. You can look at new to brand as sort of also a temperature check on how you're directionally with incrementality. But then you can look at true incrementality based on on platform measurement and then external studies that can help to prove that you're actually reaching a different customer, a different buying behavior. And that for me is really the grounding of is this platform driving outcomes that matter to me and is it doing so in a line of products or an area that I really care about. Tim, what would you add?
- [32:29]
A
I 100% agree with everything that Ali said, by the way. That's a theme in my life. I usually agree with everything that Valley says the.
- [32:38]
B
But it goes both ways, Tim.
- [32:40]
A
The only thing I would add to that was because that's 100% true or on the incrementality and then just one even step further, I would be testing the instacart data in your full funnel marketing mix as well and seeing like now can it bring an incrementality? I'm not seeing it. Can it work better, faster, stronger on the brand metrics as well? Can I take a marketplace view, pass back conversion data or exposure data of it and move my outcomes in a deeper way? I think that kind of testing and learning needs to happen I think at a quicker pace and because the brands that are moving best in breed, the brands that are moving are doing everything that Ali was talking about proving out incrementality and new to brand etc. And then they're also testing and learning this data to see if there's a better way to do it than they're currently doing it with their current data sets. And we're seeing huge results every time they do it. So that's the only add I would have to that out.
- [33:31]
B
I agree with you again, Tim.
- [33:34]
D
Awesome. So he went there, so I'm going to go there. So Ali and Tim are there plans to integrate Instacart ads more directly with broader omnichannel or most importantly the kind of crux of advertising in this world. The media marketing mix model that was forums?
- [33:54]
B
Yeah, absolutely. I mean it's a huge question in the industry right now. And as we were talking about this rise of retail media has really led to the consideration of how retail Media fits into mmms. And I will say that, you know, out of the box a lot of existing MMM models do not work well for retail media. They're kind of based on broad reach, efficiency, a lot of kind of linear TV kind of legacies in that world. And what we found is that there are some MMM providers that are really starting to look seriously at how can retail media integrate more effectively with mmm. Still providing that apples to apples comparison, still providing the multichannel view, but doing so in a way that's actually taking in sales data and some of the data that that retail media is actually uniquely good at. And so we're excited to continue collaborating on this front. I do think we're still in that collaboration and kind of, you know, understanding moment. So we're actually working with the IAB and others to really start to develop a point of view across the industry and participate in that point of view versus come up just for their own point of view on how retail media and MMS should live together. We're also making our data to the point earlier on transparency and data access. We're making our data more accessible in ways that can actually fit into brands internal models. So for example, working with clean rooms and working deeply with analysts to see where, where can we kind of fill some of those gaps and provide the insight that will allow for a fair comparison of media across channels and still again use some of those capabilities that retail media is uniquely good at versus some other types of media that aren't going to come with sales data directly incorporated. Tim, what would you add?
- [35:30]
A
I think that's exactly right. And this isn't a new problem by the way. Every new platform that's come along it gets frustrated by the kind of ways that maybe the older media mix models have treated these new platforms backward looking versus forward looking is it moving fast enough? So the only thing I'd add to that is we have to keep evolving and thinking differently on how we're looking at these new platforms. We know there's value there. Are we ingesting the data at the in the right type of data is the right model correctly versus getting so like stuck in our old ways or dogmatic about this is how it is done etc. So that's all I would say again. And the digital media business has been moving fast and struggling with this media mixed model question for years and years. We're going to continue to, I think we all, it's incumbent upon all of us to work together to help solve problems for brands on the this so.
- [36:17]
D
No doubt about it, Tim. So I'm going to go to the second step that you went, which was the frustration in the industry. Too many RMNs, too much proliferation. Last time I counted 150 plus in the US alone, maybe grocery alone is 60 or 70. And with retailers, new retailers popping one up feels like every single week of the year. How does Instacart fit into that jigsaw puzzle for marketers? Because they want to make sure that wherever they have distribution, there's reach and conversations with the consumer. Or are you competing with these in this ecosystem?
- [36:49]
A
No, look, I think we offer a really compelling solution to this fragmentation that's happening and this inefficiency that's happening. We hear from brands all the time. There's just way too many RMNs, right? Anyone in the first party is standing one up. There's no standardization of measurement of performance, of they can't source and manage resource and manage all these rms. They get frustrated, everyone comes in, hey, you're up, you're up, you're up. Yet my sales are flat. So how, how can it be So I think, I think, you know, there's, there's again we'll go back to, we've seen this movie before any new technology, there's a massive proliferation, right? And then we go into this consolidation phase. I think we're solidly into the consolidation phase that folks are waking up and saying, I either don't want to be in this business, I can't offer best in class capabilities. Brands can't manage all these. Agencies can't manage all these. So I think what we offer is a simplification of this whole ecosystem where from one point you can access 1800 retailers, you can access another 240+E commerce sites, you can get in store on caper. So if we can add, of course you're going to work with big partners, but if we can add one point where you really get the full marketplace, especially down the long tail, and add that simplification across not only our marketplace, but partners like Thrive and Hy Vee and others, I think it's just simpler for brands and agencies to manage. And then if we can prove that incrementality and driving the metrics they need, then that's a winning combination.
- [38:15]
B
And it helps, I would just add it helps retailers participate in a way that fits within that simplification. So in our carrot ads platform, which is what we call our platform that extends our ad solutions to E commerce players and retailers, it is possible for retailers to also prioritize Their individual relationships with brands in a way that's cohesive with this larger ecosystem so brands don't have to bid against themselves or look at multiple ways into the same inventory. It's all part of a unified system. And so we really tried to think through how does this benefit the ecosystem overall where retailers can play, they can take advantage of their own e commerce sites, whether built by Instacart or built by them. And brands can get that ability to reach more broadly consumers wherever they are and still have that easy single point of access, single point of measurement, consistent technology and self service tooling. And so we're really excited about the potential to keep growing this ecosystem.
- [39:07]
A
And sree one thing too. I'll add to that. One of the things I love about being at this company is because it's a technology company first, it's not a media company or retailer. So and if you get your arms around that, that our role is to really help retailers grow, help brands grow and we can build. The amount of product and engineering talent in this place is so far superior and substantial. And the way that we're using it to help this ecosystem gain more efficiencies and help brands and retailers grow, it's just, it's an exciting role I think we play and a unique role that we can play to help everybody win.
- [39:39]
D
No doubt about it. What a terrific conversation. There are three things I'm going to reemphasize. One is cannot be more clear. Instacart is not a retailer. I'll repeat it again. Instacart is not a retailer. Second is think of Instacart as a great measurement partner, incrementality, new to brand. We discussed that quite a bit at length over there. And the third is the use of AI in both creation of new products for advertising as well as in measurement. Those three stand out to me. Let me thank our audience for listening to this wonderful episode. Leave us a rating and review on Apple podcasts, Spotify or your favorite listening platform. It informs us how we're doing as well as if we're having the right conversations with the right folks. To all of you, thank you from Peter and me who make the show happen to all our sponsors, whether this podcast or parties, events, hosted dinners, having us at panels. Thank you, thank you, thank you. Ali and Tim, thank you for circa 2 and working with Peter and Sri on idiosyncrasies. Thank you for joining us on the CPG guys.
- [40:35]
A
Thank you, thank you guys.
- [40:36]
B
Thank you so much for having us. I'm so thrilled this worked out.
- [40:39]
D
That's a wrap of this episode of Wait for It First CPG Guys.
- [40:47]
B
Foreign.
- [40:54]
C
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