Target quietly rolled out a new way for advertisers to buy ads as it tries to win bigger budgets from brands.
Target’s advertising arm, Roundel, is launching a program called Roundel Media Studio that allows brands to buy search ads directly from Roundel’s sales reps. Search ads appear as sponsored products when people search for a keyword — such as “snacks” — on Target’s website and app.
A spokesperson for Target said the new program aims to give advertisers more ways to run campaigns. They added that Roundel Media Studio is intended to be a one-stop shop for advertisers buying search ads.
Until now, Roundel has outsourced selling these ads to Criteo, one of the largest retail-media adtech firms. The firm’s technology packages and sells ad space across retailers for advertisers to buy campaigns.
The move shows how retailers are increasingly taking big parts of their ad businesses in-house to better sell to different types of advertisers. A smaller consumer-packaged goods, or CPG, brand may want help from Criteo to buy ads, but CPG giants such as Procter & Gamble or Unilever are increasingly asking for direct access to retailers’ ad platforms. Amazon runs its own ad business in-house, and retailers, including Walmart, Kroger, and Albertsons, have also recently taken parts of their ad businesses in-house.
“It shows that they’re listening to where the industry is going if you want to stay competitive,” Briana Finelli, the head of US commerce at Wavemaker, said.
Roundel will continue to offer an option for advertisers to buy search ads through Criteo, but ad agencies said that advertisers are incentivized to buy ads directly from Roundel. Buying directly from Roundel will eliminate the fees that adtech firms, including Criteo, tack on to ad prices. These can increase ad prices by up to 20%, a high percentage that can add up for advertisers, Elizabeth Marsten, the VP of commerce strategic services at Tinuiti, said.
Finelli said that buying ads directly from Roundel would also help advertisers hit the required amount of ad spend that brands promise to pay retailers in exchange for selling their products through deals called “joint business plans.” When advertisers buy through Criteo, only a portion of that spend goes toward those distribution deals.
A spokesperson for Criteo said the firm would work with Target on the new program, “allowing advertisers new ways to meet their marketing objectives on top of already existing services.”
Target’s new program does not include other ad formats, such as display and programmatic ads that the retailer also sells. But a landing page for the program hints that Roundel may eventually include and sell those ad formats directly. “Roundel Media Studio brings together many of Roundel’s solutions and tools, starting with our sponsored product ads, Target Product Ads by Roundel,” the landing page says.
US advertisers are expected to spend $60 billion on retail media this year, with $37 billion going to search ads, eMarketer said.
Even as Target looks to grow its ad business, it’s still a small player in retail media. Target reported that Roundel made $1.5 billion in 2023, a 20% year-over-year increase, while Amazon made $47 billion and Walmart made $3.4 billion from ads in 2023.
Marsten said Target needs to roll out other self-service tools to better compete with Amazon and Walmart.
“What’s really holding Target back is their ability to scale if there’s so much manualness in the process,” she said.
