CPG Retailers Expand Online Grocery Advertising Platforms

COVID-19 has fundamentally changed the way all Americans live their lives, and the legitimate fear of public spaces that has accompanied the pandemic has had a dramatic impact on the way people buy food. In the first half of 2020, nearly half of all shoppers bought more groceries online, causing sales in the category to increase by up to 40% this year. Brick-and-mortar retailers have had to step up their online presence, and brands once focused only on Amazon have begun to branch out into other online grocery advertising options.

In the online grocery scene, as it is in virtually every online segment, it’s still Amazon versus the field. Amazon Advertising is now the gold standard for advertising in ecommerce, with targeted ads delivered at the point of sale, directing potential customers to product pages with customizable enhanced content. But other CPG retailers have seen how effectively Amazon has implemented their advertising wing and are looking to replicate success for themselves with their own online grocery advertising platforms.

Online grocery advertising

One thing that sets Amazon apart though, is that none of the other top online grocery sites offer the ability to create content through the site itself. Brands selling on Amazon can customize their basic and enhanced content through a preexisting brand account used to sell their products, but anyone hoping to create unique product content on Walmart, Kroger, Albertsons, or any other similar retailer must go through a syndicator like Syndigo or Salsify. There are benefits to using syndicators, of course: The same content is served to a large number of online retailers, so it reaches lots of potential customers, and if something needs to be changed, the content only needs to be updated once, and the edits appear across all channels. For grocery sites, syndication services are also widely used for disseminating core product information and nutritional facts.

Unlike Amazon’s enhanced content, syndicated content isn’t actually hosted on the product page, but instead is just a line of code that activates when a user scrolls down to it. The layout and functionality of syndicated content and Amazon A+ content are quite similar though, with both options offering bold imagery and customizable templates. Here’s an example of Campbell’s enhanced content syndicated to Target.com:

Online grocery advertising: Campbell's

How is Online Grocery Advertising Changing?

Many of Amazon’s biggest competitors in grocery are now attempting to implement their own version of Amazon Advertising catered to manufacturers selling on their sites. Here are the most significant newcomers to the online grocery advertising scene.

Kroger Precision Marketing

To create their self-service advertising platform, Kroger 84.51° (the company’s data analytics arm) partnered with Microsoft PromoteIQ on the back end to offer brands hard data for better transparency into their ad spend. The program “dives headfirst into Kroger’s customer-first strategy by providing you with precise, targeted communications that reward shoppers and drive incremental purchases.” Kroger advertising solutions include reaching out to digitally-engaged customers on Kroger’s online properties such as Kroger.com and email, and co-branded digital media campaigns across the web.

In theory, these co-branded campaigns are more ambitious than anything brands can buy with Amazon Advertising. Kroger advertising claims to have developed personal relationships with more than 500 leading social influencers, with “added access to an additional army of 4,500+ micro-influencers when activations require an amplified voice and scale.” Word of mouth, even when it is artificially concocted, can be a unique and powerful avenue for acquiring new and loyal customers.

On the Kroger.com site however, it’s hard to see exactly what advertising on their channel gets a brand outside of a small “Featured” tag and preferred product placement.

Online grocery advertising: Kroger

Kroger contends that the 84.51° branch is a “strong performer” with “industry-leading” return-on-ad-spend. Perusing through their featured ads though, I was unable to find a single “Featured” item with enhanced content, even though enhanced content is served to the site by multiple syndicators. A featured Tostitos product on Kroger.com only linked to sparse text, while the same product on Amazon had expanded A+ content (not especially good content, but enhanced content nonetheless).

Kroger:

Online grocery advertising

Amazon:

Online grocery advertising

Albertsons Performance Media

Partnered with Quotient as its platform tech provider, Albertsons is attempting to leverage its retail loyalty card programs into an advertising and attribution engine, as those already in the system can be tracked over time and retargeted online by advertising technology. With shopping information on hand for over 30 million verified users (Albertsons also own Safeway, Vonns, and many other stores) they have quite a bit of data to work with. For brands, their online grocery advertising platform focuses on creating omnichannel experiences that bridge ecommerce and brick-and-mortar, driven by real-time data.

Their “Quality Media Delivery” options include:

  • Exclusive Albertsons-owned media placement (.com, email, app messaging)
  • Brand pages on Albertsons.com
  • CPG contextually relevant inventory
  • Brand-safe and viewable off-platform inventory

They also offer paid social advertising, but do not go into specifics about how many influencers they currently have in their pockets. Like Kroger, Albertsons is insistent that their enhanced metrics will allow brands to clearly see how digital advertisement campaigns directly affect sales and purchase behavior. Also similar to Kroger, I was unable to find a single piece of enhanced content on their site, even though they are served by Syndigo and Salsify. Unlike Kroger, the paid promotions on their site weren’t just relegated to sponsored products, as the top of the page featured a large, eye-catching ad. Additionally, the entire top row of products were sponsored content, not just a few ads peppered in here and there.

Online grocery advertising: Albertsons

Advertising with Instacart

“Instacart is the North American leader in online grocery delivery with a marketplace spanning 25,000 brick-and-mortar stores across more than 5,500 cities in the US and Canada.” The coronavirus drove a massive number of new customers to the service, with a reported 74% surge of users in the month of April. Now a major player in the ecommerce grocery game, Instacart has also unveiled their own self-service advertising platform.

Though their site doesn’t lay out page after page of reasons why brands should choose to advertise with them as Kroger and Albertsons did, Instacart’s pitch gets the important points across effectively enough. Using their advertising platform, brands can choose which products they want to promote, set budgets, and only pay when users engage with the ads. They claim that every one of the world’s top 25 CPG brands advertises in their marketplace.

The advantage that Instacart holds over virtually all other grocery retailers is that they essentially work with all of them simultaneously, as users of the service can choose from any number of stores in their area that are part of Instacart’s network. In this way, advertising with Instacart is a bit like using an advertising syndicator service: With so many users and stores aligned with Instacart, promoting your product on their site disseminates your ad across a variety of disparate retailers.

There aren’t explicitly “sponsored” products on the front page of a grocer on Instacart, but instead “Coupons” and “Sales.” It isn’t until you click on a specific product on an Instacart product page that customers are shown “Featured Products,” “Related Items,” and “Often Bought With” sections, and all of these have to be scrolled past to reach the product information. Despite a lot of scrolling, I was also unable to find a single piece of enhanced content on this site, though Safeway had a buy 2 for $5 deal on Ben & Jerry’s that was pretty enticing. The same product on Instacart via Fred Meyer was $5.59 for a single pint. That kind of deal is almost tempting enough to pay a stranger to bring me some ice cream.

Online grocery advertising: Instacart

 

The Takeaway

Amazon’s top rivals in online grocery are making big strides to stay competitive, with unique social media offerings and unrivaled access to years of shopping data. But even though they are convincing some of the largest brands in the world to invest in their new platforms, they are still neglecting a key component: content. Combining targeted advertising with best-in-class product page content has been shown to significantly increase conversions. Syndigo guarantees a 12%-36% lift in conversions when brands use their enhanced content syndication services, and many brands are already aligned with the company to handle basic content and nutritional info.

Amazon makes it especially easy for brands by offering content and advertising solutions under one roof, but when content and advertising become separate obligations, one can’t be neglected to focus solely on the other. Kroger, Albertsons, and Instacart are aligned with syndicators who can serve enhanced content to their product pages. Brands who invest in these self-service advertising platforms need to remember that a smart content strategy should go hand-in-hand with product promotions.