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Target's sales may be down, but it's helping other brands secure new customers.

The Minneapolis-based corporation experienced a drop in merchandise sales in 2023--the first time it's experienced a dip since 2016, CNN reported in March. But another part of the business is thriving. Roundel, Target's in-house ad business, grew more than 20 percent in its fiscal year that ended on February 3, Reuters reported. Target shared that Roundel grew more than 60 percent and delivered more than $1 billion in value in both 2021 and 2022.

Launched in 2016, Roundel says it boosts customers' visibility by using consumer data from more than 165 million people to run ads on the platforms of more than 150 publishing partners. For example, a dog owner might see a commercial for pet food while watching a show on Roku streaming stick or a baking enthusiast might come across a display ad for a new kitchen tool while scrolling on Pinterest.

This year, Roundel launched the Roundel Media Studio, a digital hub that gives its merchants tools to manage and view the metrics of their Roundel marketing campaigns. While Target doesn't give its merchants individual shopper data, a Target spokesperson told Reuters, it does share aggregated customer information. Results are promising: In a campaign with sausage retailer Johnsonville, Roundel says it was able to identify and target light buyers and lapsed shoppers with ads, in addition to offering discounts to loyal Johnsonville shoppers. Roundel says the campaign led to a 4.4 percent rise in online sales and a 7.9 percent rise in in-store sales.

Roundel is not the only in-house ad business of a large retail brand. Walmart Connect is Walmart's marketing branch that helps advertisers reach its shoppers in-store and online. The platform helps advertisers promote sponsored content on social media, place ads on the Walmart website, and view analytics on their Walmart ad campaigns.

As brands contend with increased digital advertising costs--as third-party cookie restrictions have made it harder and more expensive for them to target potential new customers--this kind of platform may help them get in front of their target audience. And, of course, the Target audience.

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