Instacart’s ad revenue was up 18% in the final quarter of 2023 to $871 million.

The online grocery shopping app also reported modest growth in orders, which rose to 70.1 million – a year-on-year increase of 5%, as well as a 5% year-on-year growth in growth transaction value (GTV).

Driving success. Instacart attributed its ad revenue success to the popularity of its shoppable display and video ad formats, coupled with effective initiatives that highlight value to advertisers.

Why we care. The success of Instacart’s shoppable display and video ad formats suggests that advertisers are getting good results, so it may be worthwhile considering implementing these ad products into your campaign strategy. However, be aware that as Instacart gains more popularity, ad prices could increase.

Investment rate. The advertising and investment rate remained steady at 3.1% compared to the same period last year. However, it’s important to note that the rate increased by 47 basis points in the previous year due to the introduction of shoppable display and video.

Takeaways. Additional key findings from the report include:

• GTV of $30,322 million, up 5% year-over-year.
• Orders of 269.2 million, up 3% year-over-year.
• Total revenue of $3,042 million, up 19% year-over-year, representing 10.0% of GTV.
• Transaction revenue of $2,171 million, up 20% year-over-year, representing 7.2% of GTV.
• Advertising & other revenue of $871 million, up 18% year-over-year, representing 2.9% of GTV.
• GAAP gross profit of $2,278 million, up 24% year-over-year, representing 7.5% of GTV and 75% of total revenue.

What Instacart is saying. Fidji Simo, Chief Executive Officer, described Instacart as “the best advertising platform.” He said in a statement:

• “Customers rely on us for recurring large basket orders delivered in minutes, and brands use Instacart to connect with those high-intent customers. As a result, we’re able to command upwards of $3 per order in on-platform advertising & other revenue and on average, we deliver more than 15% sales lift for brands, which allows us to keep costs low for customers and retailers.”
• “Nearly half of our customers report having discovered a new brand on Instacart, and nearly 8 in 10 of them went on to purchase that brand. Now we’re using our data and insights to build a retail media network and expand that footprint to off-platform surfaces.”
• “By partnering with Google, The Trade Desk, Roku and more, we’re helping brands create more performant and targeted campaigns across channels like search, social, programmatic, CTV, and linear TV.”

Deep dive. Read Instacart’s full Q4 2023 earnings report in full for more information.