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Who needs 12-foot-tall skeletons when you can sell ads?
Walmart and Target both told investors this month that their billion-dollar retail media networks were doing just fine, and had grown by double digits in the most recent quarter.
Open the books: Walmart’s ad business grew 26% globally in Q2, while its US business, Walmart Connect, grew 30%, the company reported last week. In February, Walmart said its advertising business grew to $3.4 billion in FY 2024.
Meanwhile, Target’s Roundel media network, which has been valued at roughly $1.5 billion, saw “double-digit growth” in the quarter and should end the year by growing in the “high teens” after the ads business grew more than 20% last year, Target CEO Brian Cornell told investors Wednesday during the company’s Q2 earnings call.
The company’s ad business has benefited from data collected by Target’s rebranded loyalty program, Target Circle, Chief Commercial Officer Rick Gomez said.
“Because of the invaluable insights we gained through Target Circle, we were able to offer four times more personalized offers as compared to a year ago,” Gomez said. “Those same insights fuel our Roundel media network.”
So what? Business is booming for retail media. It’s responsible for one-fifth of all digital media spend this year, and the category is expected to grow to a $166 billion business by next year, according to eMarketer. Amid the growth, it’s an increasingly crowded category, with competition from other retailers like Costco, services like Uber, and financial service providers like AmEx.
FWIW: Neither Home Depot nor Lowes, which both operate retail media networks, broke out their advertising businesses in their quarterly earnings 😔.