Retail media networks are slated to be one of the key themes at this year’s Cannes Lions Festival. Retailers’ buzzy foray into the ads business is building out a new revenue stream for the historically thin-margin businesses—but it’s not without challenges.
Roundel, Target‘s RMN, is headed to Cannes alongside numerous other major RMN players as they vie for relevance in an increasingly crowded landscape.
As Sarah Travis, president of Roundel, packs her bags for a trip to the Riviera, ADWEEK caught up with her to discuss how the business is riding the wave of growth while doubling down on points of differentiation.
This conversation has been edited for clarity and brevity.
How is Roundel driving revenue growth for Target?
Travis: We’re a key growth driver for the business, and the fastest-growing part of Target. In 2023, we grew at 20% year-on-year and delivered over $1.5 billion in ad revenue, and we’re well on our way to deliver $2 billion. But we see retail media as much more expansive than just revenue. An advertising business delivers higher-margin revenue than a retailer is used to, but if you do it the right way, it can also be really additive to the overall guest experience.
About 35% of our advertising runs off-property through partnerships, and about 65% is on-property, which allows us to reach guests more broadly. Offsite media delivered about 250 million visits to Target’s properties via Roundel in 2023.
We’ve heard a lot about the internal challenges that retailers face when building out a retail media business, because the goals of the RMN can sometimes conflict with—and overlap with—the merchandising and sales teams. How is Target navigating those organizational challenges?
Travis: To build a retail media offering, you need all the incentives to be aligned internally. You need to build tech, bring in talent—you need to invest to drive growth. We’ve now got over 800 people working on the Roundel business, and our product and tech resources have grown over 50% over the past couple of years.
Our digital, tech and product teams are in lockstep, and our sales and account management teams are in lockstep with merchandising. We want to bring a “One Target” approach to any brand that we’re working with. To do that, the team that’s covering Procter & Gamble at Roundel needs to be in lockstep with the teams in merchandising working with P&G to go out to market and work with P&G on one approach for their business with Target.