Thrive Market Is Building an Ad Business

The next time you buy organic crackers online, don’t be surprised if you also see an ad for organic soda before checking out.

Thrive Market, a membership-based online grocery store that focuses on healthy and sustainable products, is standing up as an ad business. To launch the platform, the company is using Instacart’s software to power and sell ad placements on its ecommerce website. Thrive Market claims to have 1.5 million members and brings in more than half a billion in sales, said April Lane, the company’s chief merchandising officer.

The retailer will begin to sell sponsored searches on its website this fall. Thrive Market will also start selling display and video ads in the coming months. Lane said that the retailer will sell some ads through its reps as well as through Instacart reps.

Plant protein brand Aloha and snack brand The Good Crisp are using the ad products.

Thrive Market is just the latest retailer to add ads to its repertoire. The space has seen an explosion of growth in recent years, with 200 retail ad networks already in the market, according to tech firm Mimbi.

However, Lane said that Thrive Market is trying to differentiate itself with its curated group of products from 850 brands as opposed to grocery stores that sell thousands of brands. Brands will be able to tailor campaigns to target niche categories of products like healthy snacks.

Ads are table stakes in online grocery

Lane said that the decision to launch an ad business came from brands who asked for new ways to promote their products online—similar to other grocers with ad arms. According to Lane, Thrive Market landed on Instacart as its partner because brands already worked with Instacart for other ad buys. The company also uses AI to recommend products to people, which will require Instacart to create custom ad products, Lane said.

“We need to build new ad experiences that can work in that environment, so we needed a partner who would be willing to get into the trenches with us and build,” she said.

Instacartalso sells technology to manage retailers’ ecommerce websites. The company pitches these abilities to retailers promising that they can manage ads in addition to ecommerce operations. However, Lane said that Thrive Market handles its own ecommerce operations.

Chris Rogers, chief business officer of Instacart, said brands’ existing ad budgets for Instacart can be extended to include Thrive Market. Ad campaigns can also be targeted to only run on Thrive Market. Regarding optionality, campaigns can be run either manually or through a self-serve platform that shows brand metrics like attributed sales or return on ad spend.

Rogers said that advertisers will also be able to use Instacart’s broader swath of grocery data to personalize and target ads.

“Because of our scale, we have a deep understanding of how consumers shop for groceries across the entire journey—that means we have all the knowledge to show relevant products at the right time to high-intent customers,” he said.