‘An influential seat at the table’: Why Target’s retail media business Roundel is one of the first to test ChatGPT ads

If ChatGPT’s move into advertising is to become a durable feature of its business rather than a short-term experiment, much will hinge on whether those ads can prove they drive real outcomes, not just impressions.

Target wants to be among the first to find out.

The retailer is one of the first wave of brands to start testing ads across ChatGPT’s free and Go tiers — a pilot which began on Feb. 9, having been delayed three days by OpenAI. It is promoting both its own business and select partners from its Roundel retail media network. The placements will align with specific keywords in user prompts, an attempt to mirror the intent-driven logic of search while adapting it to a conversational interface. Target did not share how much these placements cost, but Digiday previously reported that approached advertisers confirmed they had been told that the ads would be priced at $60 per 1,000 views.

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Ad Tech Briefing: A mid-term report card

The latest earnings cycle in ad tech and digital media was effectively telegraphed before a single quarterly call began. Liftoff Mobile’s decision to postpone its planned initial public offering on the Nasdaq crystallized a shift in Wall Street’s mindset: it won’t reward growth at any cost, particularly when it comes with heavy AI investment.

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The company cited “market conditions” after a sharp selloff across software stocks, with more than $800 billion wiped from the S&P 500 software and services index since late January. That retrenchment followed earnings from Alphabet and Amazon, which, while showing sizeable revenue gains, unnerved investors about the scale of capital expenditure required to fund AI infrastructure. The reaction underscored a broader re-rating: top-line growth alone was insufficient if accompanied by margin pressure and escalating compute costs.

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