Now that the ad market is booming again, all sorts of businesses are doubling down on their investments selling ad space.
Why it matters: Media companies used to be the biggest sellers of advertising globally. Then tech giants took that title. Now, in a post-pandemic world, every industry that has a digital presence is trying to build an ad revenue line.
Driving the news: Instacart on Thursday said it poached a key Facebook executive, Fidji Simo, to be its new CEO.
- Simo, who has been with Facebook for a decade, headed up Facebook’s app and was behind many of Facebook’s biggest product pivots — most notably, building out Facebook’s mobile ad suite.
- In an interview with CNBC, Simo said she’s strongly bullish on the $1 billion ad business Instacart is aiming to build, as detailed in an Insider report last month.
Industries are aggressively pursing advertising:
- Delivery: Instacart has competition. Gopuff, the $9 billion food delivery startup, is launching its own ad network, Axios reported last month. DoorDash is reportedly looking to hire a head of advertising.
- Retail: All of the retail giants, like Walmart, Target, Best Buy and Home Depot, have built their own ad networks that connect companies to people when they shop. Amazon is by far the largest retail ad giant, with a roughly $20 billion annual ads business.
- Grocers: Kroger, Albertsons and even discount grocers like Dollar Tree have all launched their own media networks in the past few years.
- Pharmacies: CVS and Walgreens have both launched their own ad-placement programs.
- Gaming: A first-of-its-kind in-game ad platform launched last week, giving marketers that are used to running TV ads the ability to target younger demographics with similar types of spots that will run in console video games.
How it works: Every company sells ad space differently.
- Delivery apps will sell sponsored search results for different items a user wants.
- Retail stores may sell sponsored search results on their apps or websites, as well as in-store branding at their different physical locations.
Be smart: For companies that sell goods, advertising isn’t just a financial opportunity, but a chance to make their operations more efficient. For instance, grocers, retailers and pharmacies can monitor their inventory and push products they need to move quickly.
The big picture: The ad industry was clobbered in spring by pandemic-driven budget cuts. But a quicker-than-expected economic recovery has analysts forecasting that ads will return stronger than ever in 2021 and beyond.
- Looking ahead, the experts expect the ad market will continue to diversify amongst different industries, but particularly retail.