2025 State of Mobile is Live!
Sensor Tower · Abraham Yousef · March 2024
MMM: Target Advertising Business Trends; UMG Pulls Catalog From TikTok
Target's 4Q23 revenue fell short of expectations due to a slowdown in consumer spending on non-essential items. Moving forward, the company highlighted its advertising business, Roundel, as a key growth driver. Universal Music Group removed its music catalog from TikTok in February, leading to a slight decline in user engagement on the platform.
Key Takeaways:
Target’s 4Q23 reported EPS exceeded estimates while revenue missed the mark. The company struggled to drive sales in discretionary items during FY23, a trend reflected in its reported comparable store sales (-4% YoY). Per ST data, Target MAUs fell -1% YoY in 4Q23, compared to +5% for Amazon and +10% for Walmart. From 1Q23-4Q23, Walmart MAUs increased an average 11% YoY, per quarter, compared to 6% for Amazon and flat for Target, as Walmart’s exposure to groceries likely helped buoy growth
Although Target mobile app user growth and comparable store sales have slowed, its advertising business (Roundel) has been a fast growing prospect for the company. Per ST data, the top ten categories of advertisers (by total impressions) on Target’s retail media network saw impressions soar an average of 340% YoY in 2023, indicating a material increase in advertising activity on the network
Target’s fastest growing advertising channel in 2023 was TikTok, with the retailer’s impressions served for various advertisers on the network up more than 585% YoY
As TikTok deals with the recoil from Universal Music Group pulling its music from the platform, negative reviews for the app have increased materially with 27% of US reviews in Feb’24 being two stars or less, up from only 18% in Feb’23
Music was the third most popular term included in reviews for Feb’24 and is attached to reviews that averaged 1.5 stars
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