While hype across the metaverse is dying, a number of the key players viewed as shaping the long run of digital experiences proceed to thrive. Roblox saw revenue increase 26% year-over-year in 2023, together with a 22% increase in each day lively users and 60 billion hours of engagement on the platform. Those results fortify that the platform is a crucial emerging channel for brands looking for to connect with young consumers.
Roblox is taking the subsequent step in reaching out to Madison Avenue by making immersive video ads available to all advertisers, the corporate announced Wednesday. Immersive video ads were first announced in November and have since been tested by brands including E.l.f. Beauty and Walmart. The wider rollout is accompanied by several moves around measurement, including latest partnerships with Integral Ad Science (IAS) and Kantar, and follows recent executive hires that time to the platform’s growing advertising ambitions.
The latest video ads give marketers a scaleable way to reach Roblox’s Gen Z-heavy audience without the necessity to construct custom 3D content, executives explained. The launch builds on the introduction of a portal ads format and latest metrics, like cost per transport, which are relevant in a 3D gaming environment.
“We heard from numerous brands [that] we’ve got this really hard-to-reach, highly engaged Gen Z audience spending hundreds of thousands of hours on our platform, they usually wanted to give you the option to reach them in a way with less friction,” said Stephanie Latham, Roblox’s vp of world brand partnerships. “What immersive video ads allow us to do is really lower the barrier to entry and provides all of them access to this audience that they are trying to reach.”
Striking a balance
More than half of Roblox’s 71.5 million each day lively users are Gen Z, a cohort notoriously wary of traditional advertising. Adding immersive video ads to a platform known for gaming and community constructing required balancing the needs of users, brands and developers.
“We spent numerous time innovating to make certain what we were creating would work in our unique environment but in addition translate in a way that advertisers have the assets, the 15-second videos, that they may also then benefit from easily,” Latham said. “We have this thriving virtual economy and we wish to make certain that we’re mirroring the actual world wherever we will back to Gen Z — they mix the 2 truly frictionlessly.”
So far, Roblox’s efforts are working. Three-quarters of users said they were more likely to notice brands advertised on Roblox as compared to brands that publicize elsewhere, according to an audience impact and brand lift study the platform undertook with Latitude. Video ads on Roblox also delivered lift across quite a lot of outcomes, from awareness and consideration to generating social media posts and website visits, per the study.
“Video ads offer a singular opportunity for our clients to introduce their brands to Gen Z consumers globally inside popular immersive environments in a secure and scaled way, while utilizing video, social or display budgets to tap into Roblox’s premium video inventory,” said Cara Lewis, chief investment officer of Dentsu International, a test partner on the initiative, in a press release.
Behind the scenes
The latest video ads can be found today through Roblox’s self-serve Ads Managers and can soon be available through programmatic media buying. Advertisers can shape their buys with genre targeting, brand suitability and audience estimator features. Later this yr, they’ll give you the option to buy accomplished views, which is currently in beta testing.
Roblox also announced partnerships with IAS and Kantar around measurement. IAS will provide 3D in-experience Viewability and Invalid Traffic measurement in complex environments later this yr, verifying that ads are driving real engagement. This a first-to-market integration, per press materials.
“IAS is dedicated to supporting advertisers wherever they’re, and that features providing unique, effective ad measurement solutions across emerging mediums corresponding to immersive 3D environments,” said IAS CEO Lisa Utzschneider in a press release.
Separately, Kantar’s Context Lab will function an interim solution for brand lift studies as Roblox works to integrate with multiple brand lift partners. Roblox also recently teamed with PubMatic to boost programmatic media buying capabilities. The partnerships speak to advertiser needs around measurement which are table stakes for brand new ad platforms, regardless of the success of tests and trials.
“Until you may prove it in a way that a brand could make investment decisions based on the outcomes they’re seeing, I don’t think you could have scale or product-market fit,” Latham said. “The measurement partners are incredibly necessary for us to make certain that we’re proving the worth of each dollar that is spent on the platform.”
Roblox’s additions to its ad business are supported by recent strategic hires. Ben Fox, formerly of Yahoo and King Advertising, joined Roblox as vp of operations for partnerships and David Vespe, formerly the lead engineer on Google’s demand gen product, has taken on the role of head of ads engineering. Ramping up an ad business comes as Roblox looks to proceed drawing marketers to its platform whilst investment within the metaverse shifts to other areas like generative artificial intelligence.
“The way that we’re seeing Gen Z, specifically, interact, communicate, play, learn … all of that is happening in real-time on Roblox. That confirms for us that this is the subsequent big media channel for all of us as an industry,” Latham said. “The behavior there is only amplifying and that’s something that all of us need to lean into together.”
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