Roundel’s Sarah Travis on How the Retail Media Network Is Preparing for the Future

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.

How are you approaching measurement and metrics to ensure that you have the right tools for advertisers using Roundel?

Travis: I don’t think there’s a silver bullet. We are focused on developing a comprehensive approach to measurement that allows advertisers to be able to measure across different objectives. Incrementality is a great example. We’re investing in incrementality, we are actively experimenting with leading-edge capabilities with our bigger brands, but we’re thinking also beyond that.

We’re building solutions that help drive awareness and consideration for brands looking to do more upper funnel—measuring reach, frequency, new shopper acquisition. We are also making significant investments in our performance and insights team, which works really closely with our brands to do analysis, deliver insights on campaign performance and what a strategy might look like.

How is Roundel working to differentiate itself in an increasingly crowded RMN landscape?

Travis: Our No. 1 value as a company is to be centered on the guest. My No. 1 priority is to be additive to that. So, we’re going to take a more cautious approach from an advertising perspective at Target. We are not going to flood our properties with advertising to drive short-term impact for the business. We’re going to be thoughtful about the moments to show up on our properties and across our partnerships, to have the right moments with guests, and then drive the right moments with brands.

We have one of the largest free loyalty programs in the world. It is multicategory, and we’ve got over 100 million members. That is obviously valuable from a retail media perspective. We have logged-in users. We understand what’s happening with over 90% of transactions—that’s different than retailers that have a lot of cash transactions or don’t have a logged-in user base. We can deliver more personalization and optimize more effectively with better measurement solutions.

How is Roundel investing in in-store ad placements like digital screens and high-tech sampling?

Travis: We’ll be focused on evolving how we leverage QR codes to drive more engagement through what has been more of a static advertising experience. We’re going more full-scale with digital screens in the next couple of months as we head into holiday.

Experiential is an area that we’re really interested in, so things like sampling and bridging the digital experience that somebody has through advertising on our property and throughout their search journey into the stores. We’ve got a lot of people that use their phone in our stores. We’ve got 76% of people using the application or Target.com in stores, and 90% of Generation Z shoppers. Outside of adding more screens to the stores, we’re also looking for ways to take advantage of the screens that people have in their hands.