Measure what matters: selecting the right advertising KPIs for Instacart advertising - Episode 230

INTERVIEW WITH MATTEO BIZON

DESCRIPTION

In today’s podcast, we are doing something a little bit different: Kiri is replaying a presentation that she and Matteo Bizon, a PPC Specialist at Bobsled Marketing, gave at an event organized by firstmovr, an education company for the e-commerce industry. The focus of the presentation was specifically about Instacart advertising and measuring what really matters.

Make sure you tune in to find out more!

Matteo Bizon has a background in marketing management, and before joining Bobsled, he worked for Amazon as a PPC specialist for the Italian marketplace. During that time, he learned the foundations of Amazon advertising and improved his ability to communicate with clients by evaluating their business goals and by transforming this information into strategic opportunities. Matteo has brought all his knowledge and skill to Bobsled Marketing where he is a PPC specialist.

“By working on accounts for hundreds of clients, hundreds of brands across the retail media channels, we really have learned that there is a tradeoff between profitability and growth.”

— Matteo Bizon

KEY TAKEAWAYS

Last year in February Kiri published a book called Instacart for CMOs with Stefan Jordev. It’s a hard text to keep up to date, and a year later a lot has changed. Some predictions came true, for example, Instacart wants to display ads and more content capabilities for brands.
A lot of the fundamentals from that book are the same, particularly around the discipline required to track business fundamentals and metrics and act on them.
Introducing the concept of “measure what matters” as a metric framework, looking at the main objectives of growth and profitability, a KPI framework around Instacart.
Measure What Matters: OKRs: The Simple Idea that Drives 10x Growth by author John Doerr - objectives and key results (OKRs) originally by Andrew Grove.
Key results - usually a mix of inputs (or processes) and outputs (outcomes of said processes); to the best of your current knowledge, the way to achieve the objective.
Growth is not a strategy, it is the outcome of a strategy. This is one of the traps that brands fall into.
Simplify what your company’s commercial objectives are going to be around - growth or profitability; other corporate objectives exist, but from a commercial perspective, these two relate to most others and are usually the main objectives of any brand selling on any platform.
There are tradeoffs between those two objectives particularly around advertising performance.
Profitable growth - results will be diluted across the profit and growth objectives.
Different objectives for different assortment and channels - a mix of the two objectives.
What are the main KPIs that influence growth and profitability to get the desired results:
- Growth - mostly achieved through our ability to increase market share consistently and in relation to advertising efforts, it’s tightly connected to advertising incrementality.
- Profitability - achieved through a high lifetime value of each of our customers and the ability to have a strong total ROAS.

The framework has been developed by analyzing the key levers that we utilize at Bobsled to drive results for our book of clients. We studied all the main metrics that it is possible to get data on, analyzed the main cause-effect relationships and determined which metrics influence the others and how these metrics can be better controlled and improved.
This is an example of the analytical approach that we apply to advertising as an agency. Apart from applying the best practices to campaign management and creation, we strive to be as data-driven as possible to guide our clients reach their business objectives.
In order to understand the information, we need to take a step back and understand the data behind the ad placements on Instacart. Instacart Featured Product ads are served at the top of the page before the organic search results, then also in the rest of the page mixed with organic results. Based on data shared by Instacart, you may see that 40% of all clicks in search results come from the first 3 ad placements on any search results page.
Objective: market share, KR: managing budgets:
- There is a basic relationship between the available budget and the total sales. Advertising incrementality on Instacart is determined by the combination of search volume and a healthy distribution in stores.
- If a category in the market presents the right level of advertising incrementality, our growth is only limited by the level of ad spend that we are capable of investing into advertising.
- The main points here are that by that having an appropriate budget:
  - Our campaigns do not exhaust their daily budget early in the day and then go dark, leaving all the best placements to our competitors
  - We are able to be more aggressive with our bids, thus making sure that we always stay competitive in the auction for the most important placements to achieve visibility, traffic, and first time buyers

Objective: market share, KR: share of voice:
- In order to achieve growth through advertising, we need to be consistently appearing in ads and, preferably, more often and in better placements than our competitors.
- A good way to understand this is to run a periodic Share of Voice analysis. In order to do that, at Bobsled we partner with Pacvue, an amazing reporting and optimization tool that integrates directly with the Instacart advertising platform and is able to pull very interesting data for us.
- This is extremely useful to understand how we are performing compared to our competitors for specific keywords and to guide our actions as far as our PPC strategy is concerned.

Growth vs profitability - two approaches for two brands - highlights the importance of attributing the right bids in your campaigns:
- If the main goal is visibility and growth, we need to make sure we are winning the premium placements and the most impressions we can through high bids.
- If our main goal is profitability, to achieve it we might have to trade off visibility and share of voice for ROAS by applying lower bids to our ad groups and keywords.
Objective: customer lifetime value, KR: repeat purchase behavior:
- In order to achieve a higher level of profitability, we need to maintain our customer loyalty and increase their repurchase rate.
- A person who has liked our product and remembers our brand name will highly likely use the brand name to search for what they need.
- Since Instacart does not restrict competitors from bidding on branded keywords, like our brand name, we need to make sure we have a campaign running that is protecting the first ad placements associated with our branded keyword.
- Additionally, Instacart has launched a new campaign type called display ads. For now it is only available to select accounts as a pilot, but it will be available for all accounts in the future, most likely by the end of Q2 this year.

Growth vs profitability - two approaches for two brands - In order to achieve a higher level of profitability, we need to maintain our customer loyalty and increase their repurchase rate.
What to do now:
- Identify objectives for each product/brand and shopping channel.
- Identify key results that are coherent with those objectives.
- Educate.