Despite the waning hype around the metaverse, Roblox, a key player shaping the future of digital experiences, continues to thrive. In 2023, the platform reported a 26% increase in revenue year-over-year, alongside a 22% growth in daily active users (DAUs), reaching 71.5 million. With users spending 60 billion hours on the platform, these metrics solidify Roblox as an emerging channel for brands aiming to connect with younger audiences.
Immersive Video Ads Open New Avenues
Roblox is taking a significant step forward in reaching Madison Avenue by introducing immersive video ads to all advertisers. First announced in November and tested by brands like E.l.f. Beauty and Walmart, the wider rollout is bolstered by new measurement partnerships with Integral Ad Science (IAS) and Kantar, and recent executive hires reflecting the platform’s growing advertising ambitions.
These 15-second video ads provide marketers a scalable method to reach Roblox’s Gen Z-heavy audience without requiring custom 3D content. The rollout builds on existing portal ads and new metrics like “cost per transport,” which are tailored for a 3D gaming environment.
“We heard from many brands that they want to reach our highly engaged Gen Z audience in a way that’s frictionless,” said Stephanie Latham, Roblox’s VP of Global Brand Partnerships. “Immersive video ads lower the barrier to entry, giving all brands access to this audience.”
Striking the Balance Between Ads and Engagement
Over half of Roblox’s DAUs are Gen Z, a cohort often skeptical of traditional advertising. Introducing immersive video ads to a platform known for gaming and community building required balancing user experience with brand and developer needs.
“We innovated to ensure the ads would fit our unique environment while also translating assets like 15-second videos into something advertisers could easily leverage,” Latham said. “We have a thriving virtual economy, and we aim to mirror the real world wherever possible.”
These efforts appear to be successful. According to a brand lift study conducted with Latitude, 75% of users are more likely to notice brands advertised on Roblox compared to those advertising elsewhere. Additionally, the ads generated increases in brand awareness, consideration, social media posts, and website visits.
“Video ads provide a unique opportunity for our clients to introduce their brands to Gen Z consumers globally within popular immersive environments,” said Cara Lewis, Chief Investment Officer of Dentsu International, a test partner on the initiative.
Behind the Scenes: Partnerships and Hires
Roblox’s new video ads are accessible through its self-serve Ads Manager and will soon be available via programmatic media buying. Advertisers can tailor their campaigns using features like genre targeting, brand suitability, and audience estimators. Later this year, completed views will be available for purchase following beta testing.
To enhance measurement, Roblox partnered with IAS and Kantar:
- IAS will provide 3D viewability and invalid traffic measurement to verify ad engagement in immersive environments, marking a first-to-market integration.
- Kantar’s Context Lab will conduct brand lift studies as an interim solution until Roblox integrates with multiple partners.
Roblox also teamed with PubMatic to strengthen programmatic media buying capabilities. These partnerships address advertisers’ needs around measurement, which are essential for new ad platforms to prove their value.
“Until we can provide measurement that helps brands make investment decisions, we won’t have true scale,” Latham said. “Measurement partners are crucial in proving the value of every dollar spent.”
To support its expanding ad business, Roblox made strategic hires:
- Ben Fox, formerly of Yahoo and King Advertising, joined as VP of Operations for Partnerships.
- David Vespe, previously the lead engineer on Google’s demand gen product, now leads Roblox’s ads engineering team.
The Future of Advertising on Roblox
Even as investment in the metaverse shifts toward generative artificial intelligence, Roblox remains focused on attracting brands to its platform.
“The way Gen Z interacts, communicates, plays, and learns is happening in real-time on Roblox,” Latham said. “This confirms that Roblox is the next big media channel for the industry. The behavior is only amplifying, and we all need to lean into it together.”
Source: MarketingDive
