- Target is testing a new ad program that measures if people bought a product after seeing an ad.
- Advertisers have to spend at least $75,000 on an ad campaign that runs for four to six weeks to participate in the program, according to three ad buyers and a sales document viewed by Business Insider.
- Target is among retailers trying to grow its share of online advertising, and its move closely follows rival Walmart's launch of a dashboard that also claims to show advertisers the return on ad spend.
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Target wants to prove to advertisers that ads get people to buy products.
The retailer's advertising arm — called Roundel — is pitching advertisers on an alpha program that shows how programmatic ads drive sales, said three media buyers familiar with the program.
Retailers like Target, Walmart, and Walgreens are trying to offset thin retail margins by selling advertising on their properties and third-party websites. Target's pitch has centered on its retail sales data and its ability to run programmatic ad campaigns on external publishers' websites.
A Target spokesperson acknowledged that the retailer was testing the program but declined to comment on specifics.
The program is available to advertisers that spend a minimum of $75,000 on an ad campaign that runs for four to six weeks, according to buyers and a sales document viewed by Business Insider.
The way it works is that each user gets an ID based off Target's first-party data that anonymizes them. The ID is then plugged into ad-buying platforms to determine if the person linked to the ID bought a product after seeing an ad for it.
Target sends advertisers reports to show them if they're driving sales as well as estimates of how many people bought with cash a product previously advertised to them in a store, though those estimates is less precise than sales data for online purchases or those made with credit cards.
This chart from a document that Target is using to pitch ad buyers shows how the program works:
Target's beta program comes after rival Walmart rolled out a similar measurement dashboard in July that tracks the performance of digital ad campaigns.
Target is trying to differentiate itself from other retailers' advertising businesses through self-serve ad products, which lets advertisers build audiences based on the retailer's data, said Briana Finelli, director of search and e-commerce media at IPG-owned Reprise Digital. Walmart, in contrast, requires advertisers to work directly with a sales rep.
Read more: Target's top advertising exec is leaving just as the retailer is assembling its attack on Amazon's ad business
Target doesn't break out its advertising revenue but has said that that 16% of its sales came from digital. To make up for its small percentage of e-commerce sales, Target creates campaigns for advertisers that don't sell their products at Target.
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