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Behind the Numbers: an EMARKETER Podcast
Redefining Commerce Media Through the Eyes of Shoppers | Behind the Numbers Special Edition
00:20:01
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- [00:05]
A
Hello and welcome to a special edition episode of the eMarketer podcast, behind the Numbers. I'm Marcus Johnson and today I'm introducing a special episode from the eMarketer Virtual Summit Commerce Media 2026 kickoff. In this episode, eMarketer Principal Analyst Sarah Marzano sits down for a conversation with Sean McGahey, senior director of Performance and Insights Roundel. Together they explore audience value, why Target guests are brand believers, measurement strategy and incrementality, off site retail media strategy, and more. Enjoy the episode.
- [00:40]
B
Hey Sean, it's a pleasure to have you with us.
- [00:42]
A
Thanks for having me. Good to be here.
- [00:44]
B
So you've just wrapped up your first 100 days at Roundel. Coming off of six years leading retail media at Google, you've gone from partnering with retail media networks like Roundel to actually being inside of one. And I'd love to hear what surprised you most about your experience so far.
- [01:00]
A
Yeah, I'm happy to share with my role at Google leading retail media across the U.S. for the organization, Roundel always had a special place in my heart and so I was very excited for the opportunity to join them and they had three specific differentiators that really stood out to me in that role. Number one was the care that Roundel takes when it comes to their guests. To say it really simply like Rowdell doesn't spam its guests. We really focus on curated messaging that's integrated within the guest experience and so that it feels additive to that experience as opposed to like an add on to the experience or disruptive to where they're going. And we take a lot of care and a lot of focus in making sure that the experience is additive to the guest experience within Target. Secondly, it's the size and the breadth of the Insights organization. Rodell has an outsized insights team that's really focused on complementing the self service solutions that we have in the measurement and reporting space with experts with deep expertise not only in media but in the Target enterprise and is partnering with our advertisers to help them bridge the gap so they get optimal performance out of their campaigns with us. And then lastly it's the way that Roundell approaches the full funnel, the full guest experience and the guest journey of a Target shopper. Many retail media networks prioritize their on site inventory because it's good for their margins, but Target and Roundell always took the guest first approach. This translated into during my time at Google, Roundell was the largest investor in offsite media with Google shopping for across the US industry and it's really reflective of the guest journey, that we know that the guest is shopping within Target's walls and outside of Target's walls. And we orient our campaigns to meet the guests where they are.
- [03:01]
B
Yeah, no, that's. That's great. And I think that paints a really compelling picture of sort of how Roundel is differentiated and why it stood out to you. And I think it's going to make sense to dive deeper into many of the attributes you just mentioned. And let's, let's start with the fact that, you know, the retail media landscape as we know it is only becoming more crowded. And you mentioned that Target's guest insights are often cited as a key differentiator. Can you tell us a little bit more about how that understanding of Target's guests then translates into meaningful value for your brand partners?
- [03:31]
A
Yeah, I think one of the core things we know about Target guests is that they're not just shoppers, they're really brand believers. They refer to their Target as my Target. They have the brands that they go to and love within that experience. And that insight that we have has translated into our loyalty program with Target Circle. We have over 100 million members in this program. We just gained 13 million members just this past year. And Target Circle members are shopping three times more than a non Target Circle guest. And so that insight that we know about their loyalty has translated into joining that Target Circle program. And for our advertiser, it means that we have an expansive, reachable, contactable audience that we can execute campaigns and advertising with. That we have not only the scale for the physical footprint of our Target stores, but a cross category view that is second to none when it comes to the industry. And, and that knowledge that we have of our guests and their loyalty to the Target stores has translated into reachable, contactable, addressable audiences for our campaigns.
- [04:47]
B
Right. So you've got this really sort of clear picture of how the Target guest shops. And I wonder if we could pivot that into a perspective of discussing measurement. Right. Which in retail media is very top of mind for brands and certainly I think top of mind for the networks themselves. So can you tell us more about how Roundel is thinking about measuring those behaviors of your guests in ways that drive real value for advertisers?
- [05:11]
A
Yeah, I'm happy to. I would say the center of how we're thinking about our measurement strategy is all oriented towards the guest experience in retail media. You have the benefit of having a lot of different metrics and a lot of data. And it can also be a curse of having a Lot of different metrics and a lot of data and and so we really orient towards what measurement is telling us the story of how our guests are moving through their target experience. And then two, which metrics and what performance is helping our advertisers understand the bottom of the line impact of their investment. And so a few of the measurement solutions that we have to do both of those things is one, our orientation towards holistic closed loop measurement in the social media space. We know that social is a very big part of the shopper journey. We have lots of partnerships with social platforms like TikTok, YouTube, Pinterest, Meta and we are looking to fully close the loop across all of those platforms. We have had a roadmap that we've been executing for the past year and I'm happy to say that we have closed loop measurement for each of those platforms, all in the space of helping us understand the guest experience and how that guest experience is driving sales for our advertising partners. The second thing I would call out is how we're approaching incrementality. We are taking a very portfolio approach to incrementality so that we can answer fast incrementality questions that are needed closely after a campaign has closed out to more robust, more longitudinal analysis to understand the longer term impacts of how our advertisements are changing behaviors. And so for us that means three primary approaches. One, a synthetic control approach to answer those quick fast questions while maximizing the value for the advertiser. Two, randomized controls within specific channels. And so if you want to know specifically what's the incrementality of Meta or Pinterest or channels such as that we're able to execute randomized controls to tell you about specific channels of performance. And then lastly, our match market test is our more robust, more comprehensive solution that does GOX holdouts the benefit of that it's comprehensive across channels, but it's more robust. And so it takes more time. But we focus our incrementality on meeting our advertisers where they are and providing the right solutions to answer the questions at the moment that they need it. And then lastly, in that spirit of incrementality and showing additional value, we've expanded our new guest metric so that you not only understand the new guest roas of your campaign and how you're gaining category, market share or influencing new guests to buy your brand, but also a per channel view so that you know specifically what tactic is moving the needle on that new guest metric. And so overall focusing on being robust in the journey and providing closed Loop measurement, not just on our on site activations, but across our social partners. Being robust in how we're approaching incrementality and providing a deeper view on new guests is how we are ensuring that we're focused on that guest experience as opposed to just every. Every metric that's available to you.
- [08:39]
B
Yeah, no, that makes a ton of sense. And I think as pressure continues to build in the retail media landscape, we're going to see incrementality continue to be considered more and more important. So I think that makes sense as an arena to sort of double down on and make sure that you're being able to provide those credible results to your brand advertisers, but also sort of expending the scope to include metrics like new to brand. So you're delivering on sort of that holistic package that I know advertisers are really going to be looking forward to in 2026. So thank you for describing all of that. You're welcome. Just to switch gears a little bit because I don't think we can have a conversation at the end of 2025 without talking about AI. So in the spirit of looking forward to 2026, how is Target and Roundel thinking about leveraging AI to do things like reduce friction for both guests and brands while preparing for what's to come?
- [09:34]
A
Yeah, the way you structure that is exactly how we're thinking about it. Like what's our guest facing experiences in the application of and what's our advertiser focused experiences in the use of AI? And from a guest standpoint, we recently announced a partnership with OpenAI where we're bringing the experience of Target, a similar experience that you would have if you were in the Target app, into OpenAI, into ChatGPT, so that we can really bridge that gap because we know that's continuing to grow as a shoppable space. We know our guests are leveraging on that platform and their discovery. And so we want to bring the Target experience into that platform. And so we're very excited about the recent announcement in that space. And then also we've really leaned into digital holiday experiences. And so we've created the Target's gift finder AI where you can take a picture of your Christmas list and then Target will translate that picture into a shopping list within the Target app. My daughters have been a very avid user of this. Well, they've been avid user in creating the list and I've been a user in using the AI to find out what the heck they're talking about. But that experience is another way that we're trying to bring the target magic, reduce friction for our guests and give them delightful experiences during this season. And from an advertiser standpoint, the two things that come to mind are our machine learning based audience capabilities. We've been leaning into AI for audience development to really help us identify the audiences that aren't as just readily understandable, just our basic understanding of our audience segmentation. We're using AI to find bespoke audiences for us and that has driven 70% increases in ROAS for our advertisers that have leaned into that solution. And then we're also optimizing our on site inventory with AI, which has realized a 62% drop in inventory crunch, leveraging our proprietary AI approach on target.com and so we're thinking about it both from a how do we create delightful guest experiences with AI, then also how can we make our Roundels campaigns perform stronger for our partners through the application of these tools?
- [11:51]
B
I love that. I think that there's so many good examples there, right. Both from a sort of efficiency and utility standpoint and reducing friction standpoint, but also really sort of creative applications. Right. I think. I love the wish list piece. I think parents and aunts and uncles far and wide can really relate to the use cases there. You mentioned earlier in the conversation the importance of closed loop measurement when it comes to off site platforms. We know that most retail media ad spending still goes to on site ads, but off site retail media is growing really fast. According to our forecast, offsite is going to grow at more than double the rate of on site ad spend in 2026. So let's talk more about that. How is Roundel continuing to bolster and adapt its off site strategy to meet the evolving shopper journey?
- [12:41]
A
Yeah, happy to. As I mentioned, in my role at Google, I got a front row seat into how Roundel was disproportionately leveraging Google Shopping specifically and its off site strategy. And now that I'm within the halls of Roundel, I'm seeing that it's a competitive advantage and it's like a strategic decision in our approach. Overall, round Dale, about 30% of our campaign activations are off site and our understanding is that the industry averages about 21%. And so we already kind of over index in the leveraging of off site, of finding those guests outside of the halls of targets to drive performance and incrementality for our partners. But one thing we did about four months ago is really marry the importance of off site and AI with our product that we call Precision plus by Roundel which is all oriented towards how are we using the best of AI across our partners of Pinterest, Google Meta so that we can optimize the offsite campaigns of our partners with the great data that we have as Target with the strong capabilities and AI of our partners. And so we've been seeing that this type of activation is driving stronger engagement. It's driving a 404% lift in click through rates, it's improving ROAS 63% versus our non precision plus activations. But it's all in an effort to meet the guests where they are leaning to the value of our partnerships and use the applications of AI in a practical real way.
- [14:16]
B
Great. Yeah, those are really compelling results as well. If you think about off platform innovation, really extending your reach and how some of those platforms work to sort of drive guests to your owned properties, how are you thinking about evolving the experience on those owned properties? So anything from Target.com to your app to the in store experience to then better translate that connection to to guests and brands.
- [14:41]
A
Yeah. And of course all of the off site placements drive to target.com activation. And we saw in Q3 alone a 21% increase in site clicks driven from off platform into our applications. But we really focus our orientation around the guest. And one thing that we see is that we have the quintessential omnichannel guest at Target and that oftentimes in retail media the conversation is this is the in store and then this is the on site, this is the as if they're silos. And one thing that we see with our guests is that it's a very seamless transition between a digital in store offline experience. I think a good example of that is in store mode, which is a new application that we have within the Target app. But we recognize that 76% of Target shoppers have the app or the target.com up while they're in the store. And so we've created a in store experience that makes that experience easier for the guests that is incorporating brand messaging in that experience. And because we recognize that the in store moment is is not exclusive from the digital moment, but those two things work together. We we are continuing to expand our in store touch points with our in aisle screens and our service hub so that we are complementing the shopping experience with placements such as that. But we also have a very unique behavior at Target of Drive up where a lot of our guests may make a digital purchase and use Drive up to receive their purchase, but they go park their car and then go walk into the store experience. And so we're working to create seamless brand messaging experience throughout that full experience. And so before they came to the store, they received relevant messaging either on site or off site. If they use drive up, they're receiving appropriate messaging for the brand. And then within their in store experience through digital screens and within the app, we're seamlessly tying that experience together.
- [16:53]
B
Yeah, no, I love that. And I think that builds really nicely on the theme that you've mentioned of like understanding how Target customers shop and building tools that increase that utility from a guest perspective. And then I can only imagine how exciting it is for brands to be able to have the opportunity to say reach customers while they're shopping in stores with more dynamic messaging. So I love how that kind of knits those pieces together in a way that again, still feels really guest centric. So we're kind of coming up on the time we have for today. I wonder if you could share what are the key kind of takeaways that you'd like the audience to leave with as they think about 2026 and the future of commerce media over?
- [17:34]
A
Yeah, I would say number one, I think as a retail media industry, we have all come to terms that while ROAS is a helpful metric that you need more than ROAS to understand the impact on our bottom line. And so I would just continue to iterate that incrementality is our North Star and that we're taking a very robust approach to incrementality to answer quick, fast, short term incrementality questions and long, longer, more robustly studied, geographically based incrementality questions but. And everything in between. But as Rondell, we're really orienting our focus on incrementality so that you not only know that the campaign was beautiful, but you know that it was effective. I would say the second thing is the recognition that that omnichannel guest is at the center of everything we do. Sarah, you said it will like every, every connection point, every decision that we're making is oriented to be additive to the guest experience and not a advertising distraction. And we are bringing that to life through our enhancements from Target.com and our sponsored product solutions, to our app experience, to our drive up modes, to our service hubs. We're holistically going, using, leveraging that deep understanding of the Target guests into holistically connected guest experiences across our, across our enterprise. And then lastly is that partnerships I hope you also heard throughout our conversation how many different types of partners that we're leaning into to bring this to life. We're definitely taking a more networked, partnered oriented approach to deliver toward our guests because we know our guests are experiencing the world in a integrated fashion. And so we want to bring that both to bear for our technical tech partners, platform partners, and also for our advertisers that they feel that we're in partnership towards their growth and we're added into their business.
- [19:38]
B
Wonderful. I think that's such a good vision for 2026 and what should be kind of top of mind for all of us as we head into the next era in commerce media. Sadly, that's all the time that we have today. But thank you so much, Sean, for joining us and taking us through what your journey at Roundel has been like so far and what you guys are on focusing, focused on moving into2026.
- [19:57]
A
Happy to. Thanks for having me.