Target introduced a new artificial intelligence (AI) feature for its retail media network, Roundel, as part of ongoing efforts to grow its advertising business.
It designed the new tool, called Precision Plus, to help advertisers optimize offsite campaigns using Target’s first-party data, according to a company blog post. The feature, now live, uses AI to prioritize and adjust ad placements across platforms, including Google, Meta and Pinterest, based on specific campaign goals and performance signals.
Target is No. 5 in the Top 2000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales. Target is also No. 64 in the Global Online Marketplaces Database, which ranks the 100 largest global marketplaces by third-party gross merchandise value (GMV). Digital Commerce 360 projects Target’s total online sales in 2025 will reach $21.63 billion.
Target web sales by year
Why Target brought new AI features to Roundel
Target said it began rolling out the AI tool for Roundel earlier this year.
“Built on Target’s first-party data and real-time shopping behavior, Precision Plus makes it easier to launch campaigns aligned to specific awareness, consideration and conversion goals with greater accuracy and flexibility,” the company said.
The launch comes as more retailers enter the retail media space. While most retail media spend still goes to onsite placements — such as a retailer’s own website or app — offsite spending is growing faster. U.S. offsite retail media spending is projected to grow 42.1% in 2025, compared with 15.3% growth for onsite, according to data from eMarketer. And by 2027, U.S. offsite ad spend could reach $29 billion, representing 6.1% of total U.S. ad spending, according to Advertiser Perceptions.
Precision Plus aligns with offsite media growth
Target said more than 30% of Roundel’s partner media spend now happens off its owned platforms, including placements on social, streaming and other digital channels. That compares with a 15% industry average for offsite spend in 2023, per Advertiser Perceptions. Offsite is projected to account for more than 25% of total retail media spend by 2027, the data shows.
Precision Plus could help capitalize on that shift. Target said advertisers can use the AI tool to build offsite campaigns around specific goals in three areas — awareness, consideration, and conversion — with the system automatically selecting platforms and adjusting performance in real time. Target also said the tool increases pricing transparency by showing how budgets are divided between working media and associated fees.
According to Target, early results from internal Roundel data showed:
- 55% reduction in cost per thousand impressions (CPM)
- 843% increase in click-through rate (CTR)
- 103% lift in return on ad spend (ROAS)
Roundel expands reach as Target scales up ad tech
Target said Roundel launched in 2007 with five employees and has grown to more than 800 team members across the U.S. Since 2018, the team has expanded by nearly 50%, according to the company.
Today, Roundel processes billions of shopper signals daily, including website visits, in-store activity, and off-platform ad engagement. The retail media network now connects brands to over 165 million omnichannel guests, with data drawn in part from Target Circle, the retailer’s loyalty program, according to the company.
Target said the platform now supports over 2,000 vendors, including brands like Apple and Mars Wrigley, with placements appearing on platforms such as Pinterest, PopSugar and NBCUniversal. A consumer sentiment report released in 2024 claimed that guests were five times more likely to trust ads from Target than from brands they hadn’t purchased before.
Despite the growth, Roundel remains a relatively small part of Target’s overall business.
Target reported $163 million in advertising revenue in Q1 2025, up 25.4% year over year. That is compared with $23.85 billion in net Target sales for the quarter. The scale also lags far behind Amazon, the dominant player in retail media, which is forecast to generate $69.3 billion in retail media ad revenue in 2025 — accounting for 39.8% of all U.S. retail media spending, according to eMarketer.
Looking ahead
In addition to Precision Plus, Target said it added several new tools to Roundel. These include:
- Target Product Ads, which saw over 35% sales growth last year
- A Second Price Auction bidding model
- The Roundel Media Studio self-service platform
- Digital out-of-home (DOOH) ads tied to Roundel Kiosk for closed-loop measurement
Target expects to test new in-store formats in 2025, including demos, sampling stations and digital signage. The company estimated Roundel now generates nearly $2 billion in total value, which includes direct ad revenue and contributions that offset cost of sales and operating expenses. The retailers expects Roundel’s total value to double over the next five years.
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