Similar to how YouTube brought video broadcasting to the masses, Roblox is doing the same for video game publishing — and that includes advertisers.
In fact, advertisers are more a priority now than ever.
After all, Roblox has been a public company for only four months. And in that time questions have emerged as to how it will consistently monetize 42.1 million daily active users. Naturally, media dollars are top of the list.
“The events of the 18 months have opened an opportunity for marketers to see that the metaverse is something they need to lean into more,” said Christina Wootton, vp of brand partnerships at Roblox. “We’re not seeing the emergence of specific teams dedicated to the idea of the metaverse yet but we are hearing more say they’re building one just like they did for social media several years ago.”
For the uninitiated, Roblox isn’t a video game, it’s a platform where people go to create and publish video games that are often free to play. In effect, Roblox outsources game development to its users, and there are around 20 million games otherwise known as “experiences” currently available.
People come to these games, or “experiences” as they’re known, for all manner of entertainment, from watching a concert from their favorite performer like Lil Nas X to doing a virtual flash mob in a scene from their favorite film. So much so that users spent a total of 30.6 billion hours on these types of experiences in 2020, at an average of more than two and a half hours per day. For context, Netflix viewers watched 3.2 hours on average of streaming video per day in 2020.
“Roblox enables an owned, always-on interactive experience where any brand can accessibly build any metaverse-type shared experience — this is a compelling motive to get involved,” said Sam Cox, creative technologist at digital agency We Are Social. “It’s paving the way for a new era of branded gaming; but it’s more than a game, it’s an entire gaming platform.”
Put another way: these experiences can be a lot more engaging than when someone scrolls through their news feed. Unsurprisingly, Roblox has already piqued the interest of many marketers.
From Nike to Disney, Warner Bros. to Gucci, some of the world’s largest advertisers are already trying to reach Roblox’s audiences, which historically has had a very young demographic though that is changing.
Warner Bros. is a case in point. Roblox and the movie studio created a virtual rendition of the Washington Heights neighborhood in New York that serves as the setting for its new musical “In the Heights.”
Launched at the start of the month (June 4), players can explore the environment for collectibles that teach them Spanish as well as meet characters from the film including its creator — Lin-Manuel Miranda. Think of it like a fully realized version of a fan forum, a concept Roblox is pushing hard.
On June 10, fans will be able to attend a virtual watch party for an exclusive clip of the movie followed by a Q&A session with some of the cast.
It’s the first time a launch party like this has been held in Roblox for anything other than a music artist like Swedish singer Zara Larsson. The day after the party there will be a virtual flash mob in which players can take part in a choreographed dance as it happens in the film.
“Ten years ago there might have been a Reddit group for ‘In the Heights’ so we wanted to demonstrate what a fully realized spatial version of that would look like,” said Morgan Tucker, senior director of product for social at Roblox. “It’s a space where you could have people coming to talk about their favorite scenes from the movie.”
Partnerships seem to be the way forward. Roblox chief financial officer Michael Guthrie said as much on the company’s earnings call when he told an analyst: “We expect [Roblox] to be different than just a CPM kind of a business.”
Of course, marketers can buy the more traditional native placements, which include banner and promoted game placements to drive traffic to their games. But in many ways, the Warner Bros. campaign serves as a glimpse into what larger, brand-focused advertising in Roblox could look like in the future.
That said, Gucci has shown there can be opportunities for direct response marketing in Roblox as well. Last month, the luxury fashion company ran the “Gucci Garden Experience” where players could try on and subsequently buy certain products. Most of the items on offer were collectibles priced from 120 to max 900 Robux (note: conversion rate is roughly 1 USD to 100 Robux).
“Some brands are coming to the platform because they see a business opportunity,” said Wootton. “We’re seeing different types of categories reach out right now.”
But it’s not all inbound traffic. Increasingly, Roblox is proactively pitching marketers. Indeed, its brand partnerships team has a team of four employees including Wootton — and there will be more hires over the coming months. The company’s total headcount swelled by 403 people to a total of 1, 054 employees over the first quarter.
“My team is working mainly on entertainment, fashion, and sports but we’re seeing more interest come from other areas too,” said Wootton. “We’re working with a lot of brands that are treating these experiences within Roblox like a channel in that they’re updating them frequently to encourage people to spend more time there.”
Even so, current efforts are more often than not one-off campaigns leaving Roblox with work to do to turn media dollars into a larger, recurring revenue stream. The reality is that most marketers are still trying to figure out how to fund Roblox.
“Marketers will often say they’re interested in working with us but then they’ll tell us they have to go and find the budget,” said Wootton. “Right now, those dollars are coming from different budgets whether its theatrical interactive gaming or even licensing.”
Furthermore, virtual environments aren’t exactly scaleable in the same way banner ads are. Still, it’s cost-effective for marketers to build them given they use the same developer tools as users do. Once built, these environments can be used in perpetuity.
Update: this piece was amended to better clarify numbers around Roblox and the way it works with advertisers.
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