Increasing Spending Patterns In Online Grocery Shopping And Shift In The Digital Advertising

Increasing Spending Patterns In Online Grocery Shopping And Shift In The Digital Advertising

The online advertising industry can be considered a huge success with many digital advertisers using online marketing tactics for their products. Despite online advertisement potential online grocery shopping has been a relatively slow-growing industry until 2020.

According to eMarketer, Online food and beverage sales grew by 63.9% year over year (YoY) in 2020 with predicted sales of $243.67 billion by 2025. As of 2021, there is an estimated 142.9 million consumers (51.5%) of the US population.​

With the changes seen with the COVID-19 pandemic, the online grocery shopping industry is predicted to grow at a compound annual growth rate (CAGR) of 24.8% and hit USD 11116.96 billion by 2027, according to MarketWatch. With the number of consumers shopping online there has been a positive impact on online grocery shopping leading to higher online traffic and conversion rates. In addition, the COVID-19 pandemic has caused online food delivery companies such as Instacart and GrubHub to have a massive amount of success and growth in the number of users.​

Increasing spending patterns in online grocery shopping and shift in the digital advertising

Through this period digital advertising spending has grown tremendously. Digital ad spending in the U.S. reached $183.1 billion in 2020 and it is predicted that in 2022 advertising spending will amount to $214 billion. The growth of the online grocery industry and digital advertising are intertwined. It is imperative for future growth and development that sound strategies that improve profitability should be applied.

In terms of regions, North America holds the largest share of the online food and beverage market followed by Europe and the Asia Pacific respectively. 2021 U.S online grocery sales amounted to $98 billion. The major players that have added significant growth to the online grocery shopping market in the United States are Walmart, Amazon, Kroger, and Albertson’s companies. While e-commerce foods and beverages still have a long way to go before they overtake traditional retail channels, the growing demand for healthier food options drives the growth of online grocery store sales as consumers seek more convenient ways to shop for groceries. Online supermarkets including AmazonFresh are expected by Financial Times to lead global market revenues with U.S., China, and Japan leading markets respectively due to their favorable demographics, high internet penetration rates, large populations within each country resulting in increased consumer adoption & awareness online. Online grocery shopping is expected to account for 21% of online retail in 2022.

Food, online grocery, and consumer brands are projected to have spent 32% on different social media platforms according to research by eMarketer This is a great opportunity for digital advertising platforms such as online advertising campaigns via social media platforms such as YouTube, Facebook, TikTok, and Google Display Ads. Additionally, these online grocery shopping platforms are making ad inventory available on their platform. They are selling ad spaces for display as well as search ads. This has provided the platforms an opportunity to generate ad revenue. Earlier in 2021, Walmart announced in August of 2021 that the ad network and ad platform that they had set up had doubled in revenue. With the rapid growth in the online grocery shopping sector, the need for contextual targeting is only going to grow. Advertisers and brands are going to engage their customers on their respective platforms at every given moment.

According to eMarketer, spending on platforms such as YouTube, Google Ads, TikTok ads, and Facebook ads will only continue to grow year over year. In 2022 alone it is expected that $42 billion dollars will be spent just by online grocers targeting their audience with contextual relevance. This means more people will be looking for food items and recipes through online searches, which will lead to more food brands and online grocery shopping platforms wanting to reach their relevant audience set.

According to a study conducted by the “Journal of Product and Brand Management”, online ads have helped online grocers in increasing brand awareness and promoting online sales. The online grocery sector has found online advertising platforms such as Google AdWords especially beneficial to increase brand awareness, drive traffic, and generating leads. Also, online grocery ads have been found to have a high click-through rate (CTR) and online grocery ad clicks account for almost 42% of online food and grocery searches. The online grocery sector has welcomed online advertisements as they help online grocers in increasing traffic, generate leads, etc., which eventually helps increase online sales.

A number of marketers and brands use Google Ads to advertise their products. Google Ads is the largest ad-serving platform in the world. According to, Google Ads made 181.69 billion dollars in revenue in 2020. Online grocery platforms are using Google Ads to get their message across to their relevant audience. Through Google Ads a user has the ability to showcase a display, search, and YouTube ads. If you are new to advertising and checking this blog for the first time we would highly recommend to you read about Google Ads and its application for different marketing campaigns. It is important to optimize your budget when you are running a google ads campaign and ensure that you are targeting a relevant audience. At AdSkate we ensure that we keep the privacy of the user in mind, additionally, AdSkate’s contextual targeting solution– allows retailers who sell niche products or services an opportunity to speak directly to their specific audiences so as not to miss any potential consumers out there waiting patiently. In other words, we provide a hyper-targeted method for Google Ads users to reach out to their audience.

In conclusion, the online grocery store industry is going to keep growing at an exponential rate and this is going to lead to a significant increase in digital advertising spending. Brands and grocery platforms have to ensure they are targeting their audience set with relevant information and using AdSkate’s platform they can derive relevant contextual targeting data that can be easily applied to their Google ads campaign and notice instantaneous success