By Kimeko McCoy  •  June 2, 2025  •

Ivy Liu

But it’s not all doom and gloom for Target. Roundel, its retail media network (RMN), has continued to grow. In the first quarter of this year, Target’s ad revenue came in at $163 million, up from $130 million in that same time period in 2024. Last year, it raked in $649 million in ad revenue, up 25% from the $522 million in 2023.

Roundel’s growth trajectory speaks to retail media as the industry’s current golden child, in which marketers are expected to shell out $62.35 billion on the channel this year, according to eMarketer’s forecasting. At the same time, Target reported growth in its online business, thus fueling the growth of “profitable services like Roundel,” CEO Brian Cornell said on the most recent earnings call.

Roundel is more insulated from other parts of Target’s core business, which is dependent on in-store and onsite traffic. The retailer’s ad network operates on a data-driven model, monetization of shopper intent, behavior signals and first-party insights. Roundel also recently launched a second price auction for Target Product Ads (TPAs), its sponsored search tool, and announced the appointment of Matt Drzewicki, Roundel’s new svp. In doing so, Roundel has a buoyed its ad business to keep advertisers spending even Target’s troubling headlines.

“The audience data that Target can turn out is still highly effective and allows us to reach really key in-market shoppers,” said Anthony Costanzo, chief analytics officer at independent media agency Mile Marker, whose clients are not concerned over other areas of Target’s business. “If it’s working, they’re going to put more money in,” he said.

As advertisers continue to pay into RMNs, hooked on the promise of first-party data and proximity to point of sale, networks like Roundel see sustained demand — at least for now. By 2028, eMarketer forecasts RMN spend in the U.S. will reach $97.91 billion. Seemingly, RMNs are still riding the wave of the broader retail media gold rush and annual joint business planning (JBP) agreements that have dollars locked in for the short term. Even as marketers raise questions about tariffs and economic headwinds, the pitch from retailers remains unchanged. 

“We did reach out to them [CVS, Walmart, Target and Kroger] and ask about the tariffs,” said one agency executive who spoke on the condition of anonymity. “They’re not changing their roadmap.” That said, retailers seem more focused on reinforcing confidence in their ad business than addressing economic unknowns, per the exec.

And perhaps that’s for good reason. Annual JBP agreements mean ad dollars are locked in until contracts renew. Those agreements make it difficult for brands to pull out without jeopardizing long-term relationships with retailers (and perhaps more importantly, premium shelf space). 

Immune for now

While Roundel remains a bright spot in Target’s overall business, signaling that retail media networks are better positioned to weather tariffs and economic uncertainty, immunity isn’t certain. 

Marketers have long since sounded the alarms on retail media’s shortcomings, including fragmentation, lagging standardization in measurement, lack of fee transparency — especially as the push continues into off-site media. 

At this point in the RMN hype cycle, it’s been a few years and marketers have more year-over-year data to prove (or challenge) if the RMN juice is worth the squeeze — namely incrementality to determine if the sale would have happened without the retail media buy, according to Elizabeth Marsten, vp, commerce media at Tinuiti.

“Now we have data. Now we have patterns. That’s where we really start to see whether or not, from an insulation standpoint, is it actually [insulated],” Marsten said.

Two other anonymous commerce execs who work at the same agency echoed Marsten’s point: reduced foot traffic and lagging sales are unlikely to impact retail media spend. Increasingly, brands are pulling out of JBP commitments, pushing for self-service programmatic media buying and real-time bidding, and ultimately, “holding more retail media networks accountable for performance-driven results,” per the second anonymous exec.

The exec added that clients are starting to pull back ad spend for some retail media networks where incrementality and other performance goals aren’t being met. (The exec did not outline spend pullback specifics.)

For now, RMNs like Roundel are still doing what they were designed to do: offer advertisers scalable access to shopper data.

Per the first anonymous exec, “The [shopper] behavior might change, but [RMNs] know about the behavior because they’ll see the data and they’ll see the purchase intent, and then they’ll go from there and adapt [the pitch].” 

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