Roblox is starting to take programmatic advertising more seriously

Roblox programmatic advertising

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After a gradual start in 2024, Roblox’s programmatic business is finally gaining steam.

At the moment, Roblox is hiring for eight advertising roles across the company that would support that endeavor, including ads-focused job postings on the Roblox website for a director of engineering, principal software engineer and principal product manager. Across the board, listed salaries for the jobs begin at roughly $200,000, going up to $440,000 for the most senior roles.

A Roblox spokesperson told Digiday that the company is continuing to fine tune its programmatic offering based on client feedback, and that the hires are intended to support Roblox’s ads team, “including in partnerships, product and engineering — both to build ad offerings, tools and partnerships, as well as to innovate in the new immersive media space.”

Roblox has been dipping its toes into the ad world over the past year, and this kind of hiring activity suggests that the platform is looking to level up further in 2025. Roblox is highlighting its user base in these job descriptions, touting a daily audience of “tens of millions” and a “mission to connect a billion people with optimism and civility.” The company’s daily user count reportedly reached nearly 80 million in June 2024.

The listing for the software engineer role, for example, makes no effort to downplay the scale of Roblox’s advertising dreams, as well as the responsibilities that come with them, including crafting robust and scalable backend services, processing vast amounts of data, and running a real-time advertising decision server to develop and expand Roblox’s advertising business.”

Another tell-tale sign that Roblox has big plans for programmatic is the recent changes to its Partner Program. After a period of testing and learning, Roblox recently revised the program to shift the onus for selling its in-game advertising inventory from developer partners to programmatic vendors such as PubMatic.

When it launched in 2023, the Roblox Partner Program included a commission system to incentivize participants to sell Roblox ads directly to their clients. In spite of this incentive, however, most developers in the Roblox Partner Program chose to focus on the more lucrative business of building custom-branded virtual worlds over the past year. Brands will often spend hundreds of thousands of dollars to develop a custom Roblox world, whereas the income from ads trickles in more incrementally and in smaller amounts.

Over the past year, Roblox has expected Partner Program participants to educate their clients about the benefits of both custom-branded worlds and in-game advertising inside Roblox. Over the past year, however, partners have largely prioritized the former due to its higher profits, leaving some of their clients relatively unaware about the in-game advertising opportunity.

“What they didn’t really have was that infrastructure to connect Roblox to SSPs, DSPs and so on,” said Nina Mackie, co-founder of the agency WeGame2. “As an advertiser, you’d have to go directly to Roblox, and I think that can be quite daunting for a lot of brands.”

Alternative methods are coming. At Roblox’s annual Developers Conference earlier this month, the company announced changes to the program intended to help brands feel more comfortable spending their marketing budgets on Roblox, such as a badging system that will more clearly delineate the specific skills and focus of each company enrolled in the Partner Program.

“There was a lot of unclarity before, both for the companies within the Partner Program and also for everyone else outside,” said Marcus Holmström, CEO of the Roblox development studio and Partner Program member The Gang. “What does it actually mean that you’re in the Partner Program, compared to working with someone else? That’s something they have addressed now.”

Partner Program members will not be selling programmatic media on Roblox and brands and agencies currently need to work directly with Roblox and PubMatic for programmatic media buying, said a Roblox spokesperson. However, Partner Program members can run other types of media outside of programmatic via Roblox’s Ads Manager tool.

Before Roblox launched immersive ads in November 2023, almost all of marketers’ spending went to in-game studios building branded worlds, not to the platform itself. Just under a year later, much of brands’ spending still goes to the studios, although a Roblox spokesperson declined to share specific figures. Programmatic ads represent an important revenue stream for Roblox because they divert brands’ marketing dollars directly to the platform, rather than to an intermediary or a third-party vendor operating within the Roblox ecosystem.

Earlier this year, Roblox partnered with PubMatic to begin offering programmatic video ads on the supply-side platform. For now, PubMatic remains the only ad tech platform to maintain an official relationship with Roblox — but the partnership is not exclusive, and some observers believe it is only a matter of time until other SSPs and DSPs take advantage of the opportunity. Other platforms, such as Netflix and Disney, have similarly expanded their programmatic businesses after reaching a certain scale in order to allow advertisers to effectively access their growing inventory.

“We are excited to pioneer this new kind of advertising experience with Roblox and help establish industry standards around 3D media units,” said PubMatic chief revenue officer for the Americas Kyle Dozeman, adding that the company “look[s] forward to scaling Roblox’s programmatic video offering with the demand that will come through future DSP partners.”

The writing is on the wall. Historically, when a platform cuts a deal with one ad tech vendor, that means more such deals are likely on the horizon. After Disney announced an expansion of its programmatic business in October 2023, for example, the company ultimately partnered with Google’s DV 360 and The Trade Desk earlier this year to launch an ad exchange. Based on past trends, it wouldn’t be a surprise if Roblox followed up its ad-selling deal with one of the biggest SSPs by signing an agreement — or agreements — with the largest DSPs to buy those ads.

“Competition is going to get quite fierce for Roblox inventory, and I think we’ll see a further rollout of Roblox programmatic ads to other SSPs, and eventually DSPs, helping to incorporate 3D gaming formats like billboards and video into existing media buying platforms,” said Nina Mackie, co-founder of the agency WeGame2. “I think most of the SSPs will be seeking some sort of integration with Roblox, and perhaps the agency holdcos too. I believe the demand is there and infrastructure is the only small hurdle right now.”

Partner program members, many of whom met directly with Roblox CEO Dave Baszucki at RDC, told Digiday that the platform had not yet confirmed if or when DSPs would be opening up Roblox inventory. However, they agreed that the entry of DSPs and additional SSPs could help supercharge brands’ spending on the platform.

“If they have something that is easy to tap into from those that are buying ads today on other platforms, then of course, it’s going to be a huge opportunity for those companies, and I would really think that they are looking into that,” Holmström said.

https://digiday.com/?p=556844

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