Measuring Incrementality in Advertising

Welcome to another episode of The Ecommerce Braintrust podcast hosted by Director of Retail Operations, Jordan Ripley.

In this episode, we’re joined by Instacart experts Juan Munoz and Robert Benlloch to tackle some key retail media questions: 

Is my ad spend cannibalizing my organic sales? 

How should I be assessing my investment for growth? 

And what are the right measurement frameworks and metrics to use when having these conversations and providing guidance to our clients? 

Through the lens of Instacart, we’ll explore its unique nuances and advantages for measuring and understanding incrementality.

Make sure you tune in to find out more!

KEY TAKEAWAYS

In this episode, Jordan, Robert, and Juan discuss:

• Defining Cannibalization:

• Two types of cannibalization: traditional (ads taking credit for sales that would have happened anyway) and placement cannibalization (paid ads replacing organic placements).

• Understanding concerns about ad investments cannibalizing organic sales.

• Instacart-Specific Metrics:

• Overview of metrics unique to Instacart such as Halo Sales, New to Brand, and market share.

• Importance of the Customer Insights tab for tracking market share and competitive positioning.

• Sales per Instacart Weighted Distribution (SDPI):

• Explanation of how this metric isolates sales velocity by excluding changes in distribution.

• Importance of controlling for shifts in product availability across stores.

• Determining Optimal Ad Spend:

• Discussion on metrics like market share and total sales as better indicators of ad spend efficiency.

• How Instacart allows correlation of ad spend to market share growth against competitors.

• Developments in Instacart:

• Announcement of new metrics like "Share of Digital Shelf" which shows your position relative to competitors.

• Introduction of "Inspirational Ads" for targeting users looking for specific recipes.

• Speculations and Insights:

• Speculation on why Instacart is more transparent with data compared to other platforms.

• Reflection on Instacart's commitment to providing detailed analytics for better business decisions.

• Future of Instacart Innovations:

• Excitement around new ad placements and features like the recipe-based ads.

• Taking advantage of new developments on Instacart.