Target Introduces Precision Plus

In a strategic move to enhance its advertising capabilities, Target has launched a new artificial intelligence feature called Precision Plus for its retail media network, Roundel. This tool is designed to optimize offsite advertising campaigns by utilizing Target’s extensive first-party data. With the increasing competition in the retail media space, this innovation aims to provide advertisers with better precision in aligning their campaigns with specific goals such as awareness, consideration, and conversion. The introduction of Precision Plus comes at a time when offsite retail media spending is projected to grow significantly. According to eMarketer, U. S. offsite retail media spending is expected to increase by 42.1% in 2025, indicating a shift in how businesses allocate their advertising budgets. This feature positions Target favorably within this growing market by enabling advertisers to adjust their ad placements across platforms like Google, Meta, and Pinterest based on real-time performance signals.

Importance First

Importance of First-Party Data. Target’s Precision Plus leverages the retailer’s first-party data, which is invaluable for advertisers looking for accurate insights into consumer behavior. This data is derived from various sources, including website visits, in-store activity, and engagement with off-platform ads. By using this information, advertisers can launch more effective campaigns tailored to their specific objectives, all while benefiting from greater flexibility and accuracy. The tool not only enhances campaign performance but also increases pricing transparency. Advertisers can see how their budgets are allocated between working media and associated fees, allowing for more strategic financial planning. This level of transparency is crucial in an era where businesses seek to maximize their return on investment in advertising.

Roundel’s Growth and Expansion

Since its inception in 2007, Roundel has significantly expanded, growing from just five employees to over 800 today. This rapid growth reflects the increasing importance of retail media in the digital advertising landscape. Roundel now connects brands to more than 165 million omnichannel guests, providing them with access to a wide audience through various platforms. Moreover, Target’s commitment to innovation is evident in the enhancements it continues to add to Roundel. The recent introduction of tools like the Second Price Auction bidding model and the Roundel Media Studio self-service platform demonstrates Target’s focus on providing advertisers with the resources they need to succeed in a competitive marketplace.

Impressive Performance Metrics

Early results from the implementation of Precision Plus have shown remarkable performance improvements. According to internal Roundel data, advertisers have experienced a 55% reduction in cost per thousand impressions (CPM), an astonishing 843% increase in click-through rates (CTR), and a 103% lift in return on ad spend (ROAS).

These metrics underscore the effectiveness of Target’s AI-driven approach to advertising, making a compelling case for brands looking to invest in retail media. In comparison, while Roundel has made significant strides, it still has a long way to go to catch up with industry leader Amazon, which is projected to generate $69.3 billion in retail media ad revenue by

2025. Nevertheless, Target’s growth trajectory in advertising revenue, which saw a 25.4% increase year over year to reach $163 million in Q1 2025, indicates a positive trend for the retailer.

Future Prospects for Roundel

Looking ahead, Target has ambitious plans for Roundel, including the testing of new in-store formats such as demos, sampling stations, and digital signage in

2025. The company estimates that Roundel currently generates nearly $2 billion in total value, encompassing direct ad revenue and contributions that offset sales costs and operating expenses. This value is expected to double over the next five years, reflecting Target’s commitment to scaling its advertising business. As the retail media landscape continues to evolve, Target’s innovative tools and data-driven strategies will be essential for advertisers aiming to navigate this complex environment. By effectively utilizing first-party data and real-time performance insights, Target is positioning itself as a formidable player in the retail media network space, ultimately benefiting both advertisers and consumers alike. In conclusion, Target’s introduction of Precision Plus is a significant step in enhancing the effectiveness of its advertising strategies. By capitalizing on first-party data and leveraging advanced AI capabilities, Target is setting a standard for what modern retail media networks can achieve. As offsite advertising continues to grow, retailers equipped with these tools will likely see substantial benefits in their advertising performance and overall business outcomes.