Dwanith kotian Target’s Roundel ad unit sees strong growth, delivering $2B in value as the retailer braces for challenges in 2025, including consumer sensitivities and trade tensions.
Target’s digital advertising business, Roundel, has emerged as a vital revenue stream for the embattled retailer, delivering $2 billion in value in 2024. This figure represents a 24% year-over-year increase in advertising revenue, totaling $649 million. Roundel, which now comprises the bulk of Target’s advertising segment, is expected to continue its growth, with projections indicating the business could double in the next five years.
Roundel’s success is particularly evident in its Q4 performance, which saw a nearly 14% increase in revenue compared to the previous year. While these results exceeded analysts’ expectations, Target faces a complex 2025 ahead, marked by increasing consumer sensitivity, potential trade war impacts, and a backlash over its diversity and inclusion policies.
Despite these challenges, Roundel has proven crucial in driving profitable growth during an otherwise difficult year. Its integration with other Target initiatives, including the social commerce and third-party marketplace teams, positions it to further capitalize on its growing presence.
Key to Roundel’s success is its ability to offer unique insights into Target’s customer base, which is perceived as more trend-sensitive compared to rivals. The popularity of sponsored product ads on Target’s app and website—up 35% year-over-year—illustrates the effectiveness of this approach. Furthermore, Roundel’s small business segment grew by over 40%, demonstrating its appeal across a broader advertiser base.
As Target navigates the uncertainty of 2025, Roundel’s continued expansion and innovation will be critical in helping the company remain resilient amid shifting market conditions.
