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Ad Tech Insights

Target's Balanced Approach to Retail Media

The story: Target is navigating a complex landscape as it expands its third-party marketplace, Target Plus, while carefully balancing growth with quality control—an approach that underscores the challenges retail media networks (RMNs) face when scaling their offerings without compromising the customer experience.

Target executives recently outlined plans to grow Target Plus from over $1 billion in gross merchandise value (GMV) to more than $5 billion within five years. While $5 billion in GMV is significantly less than competitors—financial statements reveal Amazon reached $156 billion last year—Target’s invitation-only approach to its marketplace could yield long-term benefits. 

"Rather than opening the doors to any seller, we're focused on building relevance and trust by working with partners that complement our assortment and also help us provide more of the breadth consumers are looking for," said Rick Gomez , Target’s EVP and chief commercial officer, during an earnings call.

Cara Sylvester , EVP and Chief Guest Experience Officer, added in the same call that Target plans to “test and iterate,” scaling up its marketplace offerings with “a wider array of brands, price points and products in a logistically feasible and cost-effective way.”

Other retailers appear to be following suit. Best Buy , for example, is preparing to launch its own marketplace this year and is similarly aiming to expand its assortment within existing product categories.

The takeaway: As retail media networks like Target Plus grow, they’re wisely prioritizing quality over quantity. This approach may require a robust partner selection process, improved data sharing practices, and innovative integration strategies, but by focusing on complementary offerings and strategic partnerships, RMNs can enhance the core shopping experience while expanding their reach. Striking this balance between controlled growth and maintaining customer trust will be crucial for long-term success in the increasingly competitive retail media space.

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Extra Industry Insights

• AI-powered ad buying tools are gaining traction. Ben Hovaness , Chief Media Officer at OMD , part of Omnicom , predicts that up to 80% of digital media buys will be directed by AI agents by 2030. These tools promise increased efficiency but raise concerns about transparency and control among marketers.
• Tech giants like Google and Meta are pushing for greater adoption of their AI ad tools, with Meta reporting a 70% year-over-year increase in the use of its Advantage+ shopping tool. However, some marketers are hesitant to relinquish control over ad placement and targeting.
• The Home Depot is introducing a new measurement framework called ROMO (Return on Marketing Objectives) to complement traditional metrics like Return on Ad Spend (ROAS). This initiative aims to provide a more comprehensive view of campaign effectiveness, focusing on long-term business objectives such as brand awareness and customer engagement.
• Zach Darkow , Senior Director of Marketing Measurement at The Home Depot , floated ROMO to a room of 350 suppliers in Atlanta at The Home Depot’s second annual InFronts presentation. While not exactly a new metric, Darkow told Digiday , ROMO offers a more robust framework and could help tackle the measurement challenge that has long plagued RMNs. 
• According to Digiday, despite the push for brand dollars, many advertisers remain cautious, often leveraging existing trade and shopper dollars committed to retail media networks rather than creating new budgets. The competitive landscape is intense, with over 200 retail media networks vying for ad dollars.

Kevel Catch-Up

📢 PARTNERSHIP: Lyft Teams Up with StackAdapt and Kevel for Programmatic In-App Ads

Lyft has partnered with StackAdapt and Kevel to launch programmatic in-app advertising within the Lyft app. This collaboration grants advertisers access to Lyft 's premium US in-app ad inventory, enabling brands to deliver targeted messages throughout riders' journeys. The integration of Kevel 's advanced ad-serving technology enhances StackAdapt 's programmatic capabilities, ensuring seamless execution and precision targeting for advertisers.

➡️ Learn more about this innovative partnership here.

🗓️ EVENT: Kevel to Join Roku and PriceSpider at Retail Media Summit

May 6th - 8th in Rosemont, Illinois, Kevel is taking to the stage at the upcoming Path to Purchase Institute 's Retail Media Summit, alongside experts from Roku and Wayvia (formerly PriceSpider) . The session, titled "Full-Funnel Strategies for Omnichannel Retail Media," will explore how retail media networks are evolving and integrating on-site and off-site media. Oscar A. I. , VP of Sales at Kevel, will share insights on maximizing ROI across the shopper journey. 

➡️ For more information on P2PI’s Retail Media Summit, click here.

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