Roblox Hires Meta Exec for Partnerships Team, Preps Ad Network Launch

“2023 was a year of testing and learning, 2024 is our year of scale,” Wootton told Insider.

Roblox introduced Immersive Ads earlier this year with two initial formats. Image Ads are non-clickable static images that appear within a Roblox experience, while Portal Ads are images with a door that teleport users to other Roblox experiences and games. Roblox developers earn a portion of the revenue generated by Immersive Ads in the form of Robux, Roblox’s in-game currency.

Advertisers including NARS Cosmetics, H&M, Spotify, and Nascar have been among the early brands to test Immersive Ads. Roblox has said it plans to open up the Immersive Ads self-service ad platform to more advertisers later this year.

Wootton said Roblox is currently in the process of working with third-party measurement partners and producing brand lift studies as it seeks to bring more marketers to the platform. It’s also expanding the agency partner program it announced in the summer, whose founding members included the ad agencies Dentsu and Vayner3.

In prior earnings statements, Roblox has said that advertising and licensing agreements make up an “insignificant” proportion of its bookings. The company has said it intends to share its advertising revenue forecast at its November investor day.

Alongside Immersive Ads, marketers can work with Roblox to create their own virtual experiences in the platform. A Gucci virtual handbag was notably resold on Roblox in 2021 for more than $4,000. Other popular brand experiences include Vans World, Sunsilk City, and the My Hello Kitty Cafe. Brands can already pay to sponsor experiences and virtual items.

The company said in August that more than 200 brands have worked with Roblox to date and Wootton said visitors to branded experiences spent an average of 11.7 minutes there as of July.

Wootton said a key early indicator of Roblox’s success with marketers is that brands are starting to build their own internal teams dedicated to Roblox.

“We’re seeing budgets shift from ‘innovation and experiential’ to ‘media and marketing’ as more and more brands and agencies are being educated on this space,” Wootton said.

With many marketers’ budgets squeezed this year and an array of new ad platforms — from Netflix to Uber — vying for dollars, Roblox is entering the ad market with a fairly limited offer at a highly competitive time.

“They are very unapologetically pro-player,” said Brent Koning, executive vice president and global gaming lead at Dentsu. “That’s refreshing as someone who has been in video games a long time, but that could be frustrating as an advertiser because you want to be able to open the floodgates.”

Roblox offers an enticing combination of scale — with 66 million daily active users as of July — and a destination for brand building that lives in the platform permanently, said Nilesh Ashra, CEO of the Pragmatic Futurism consultancy.

“The main challenge for brands is if your eyes light up at the size of the audience and you try to market, you’ll be found out really quickly,” said Ashra. “You’ve got to make stuff that feels almost exactly tonally what the mainstream culture is inside Roblox.”

Correction: October 3, 2023 — An earlier version of this story incorrectly described the seller of a virtual Roblox Gucci handbag. The Gucci handbag was resold in 2021 for $4,000; Gucci did not originally sell it for this amount.