Roblox wants to be brands’ conduit into the metaverse.
During last week’s quarterly earnings call, Roblox executives were reticent about the company’s marketing and advertising plans. During yesterday’s Roblox Investor Day event, they made up for it. The annual presentation was chock-full of updates about every aspect of Roblox as a platform and business — including its plans to grow as a marketing channel.
“This generation merges virtual and physical all day long, and so the challenge, for brands, is to figure out how you tell that story and take them along with their friends,” Roblox vp of global partnerships Stephanie Latham told Digiday in an interview prior to the event. “Part of the fun of this is building the road map, and leaning into what’s working and uncovering some of the new opportunities — and I think marketing is going to change as a result of this.”
Here’s a breakdown of the most important updates announced during Roblox Investor Day.
The key numbers
- Ahead of yesterday’s event, Digiday received some metrics from Roblox indicating the current size and reach of the platform. As of Q3 2023, Roblox has over 70 million daily active users, with over 34 million of those users in the Gen Z cohort. Gen Z is the top-spending age group on Roblox, and a Roblox representative stressed that 17–24 is the platform’s fastest-growing demographic. As of Q3 2023, 57 percent of Roblox users are over 13.
- There have been over 240 cumulative brand activations on Roblox to date, including both bespoke branded worlds and integrations into pre-existing experiences. Of the 2.5 hours per day that users spend on the platform, an average of 11 minutes are typically spent inside branded experiences.
- Roblox’s Ads Manager, a self-serve tool for marketers to create in-game ads, is still in beta testing. As of now, however, Roblox’s Immersive Ads programmatic product is in full rollout, and no longer considered in beta.
Stepping up brand discovery options
Yesterday’s announcements included a number of incremental improvements intended to make branded experiences easier for users to encounter on the platform. In 2024, brands using Portal ads will gain the option to layer 16×9 video over their ads. Roblox is also planning to offer more brands the opportunity to pay a fee to get their experiences featured on the platform’s home page, a product Roblox calls Sponsored Experiences.
“A third of all brand-new experiences are using Portals to drive traffic to them, and that’s bringing about 90 percent of brand-new traffic to their experiences,” Latham said.
Roblox is also planning to enable age- and genre-based targeting in Q1 2024, allowing brands to specifically target users interested in topics such as sports, action or shopping.
“Discoverability and time-spent — i.e. engagement — are different, but related objectives that brands care deeply about. Roblox has an extraordinary audience of 70 million daily users, but also millions of experiences for them to choose from on the platform,” said Matt Edelman, the president and chief commercial officer of Super League, a Roblox Partner Program member. “For a brand to be excited to invest in creating their own Roblox experience, they need to know and regularly ask how their experiences can be discovered more easily. Better discovery tools and more targeted media solutions will make a material difference and only increase advertiser enthusiasm.”
Introducing video ads
In addition to video portals, Roblox is currently testing a full-fledged video ad format, which Latham told Digiday she believes was yesterday’s most important announcement.
“Digital video is the lens of our commitment to making Robox accessible to all brands, to learn and take advantage of this amazing audience we have together,” she said.
For months, programmatic image ads — essentially billboards, signs or banners placed inside in-game experiences — have been available on Roblox. As of November 1, some experiences are also serving Roblox-created video ads in the same locations to users above the age of 13.
Later this month, and through the month of December, Roblox will start rolling out brands’ video ads, and the format will become available via Roblox’s Ads Manager in 2024. (Imagine video ads playing on virtual screens, much like the multitude of screens blaring ads in Times Square.)
“I don’t anticipate a full rollout until sometime toward the end of the second half of next year, because we want to be very intentional about the value of a digital video running in our immersive experience — what does that look like?” Latham said. “You’re going to see more testing on that through the next half.”
Real-life commerce is coming soon
Perhaps the most exciting aspect of yesterday’s event was Roblox’s announcement of its plans to implement real-life commerce. Brands are already selling virtual items inside Roblox, but as of yet, it hasn’t been possible for users to purchase physical items and have them shipped to their doorstep through the platform. This will change in 2024, although Latham declined to provide a specific timeline for the product.
“It’s a natural step for Roblox to move into real-life commerce; almost every single brand or sports organization we speak with, they want to have that connection,” said Marcus Holmström, CEO of The Gang, a Roblox studio participating in the Partner Program. “Not only to do it as a brand play, or to reach a lot of people — but they also want to do something that’s actually directly connected to their monetary goals.”