While hype around the metaverse is dying, some of the key players viewed as shaping the future of digital experiences continue to thrive. Roblox saw revenue increase 26% year-over-year in 2023, along with a 22% increase in daily active users and 60 billion hours of engagement on the platform. Those results fortify that the platform is an important emerging channel for brands seeking to connect with young consumers.

Roblox is taking the next step in reaching out to Madison Avenue by making immersive video ads available to all advertisers, the company 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 new partnerships with Integral Ad Science (IAS) and Kantar, and follows recent executive hires that point to the platform’s growing advertising ambitions.

The new video ads give marketers a scaleable way to reach Roblox’s Gen Z-heavy audience without the need to build custom 3D content, executives explained. The launch builds on the introduction of a portal ads format and new metrics, like cost per transport, that are relevant in a 3D gaming environment.

“We heard from a lot of brands [that] we have this really hard-to-reach, highly engaged Gen Z audience spending millions of hours on our platform, and they wanted to be able to reach them in a way with less friction,” said Stephanie Latham, Roblox’s vice president of global brand partnerships. “What immersive video ads allow us to do is really lower the barrier to entry and give them all access to this audience that they're trying to reach.”

Striking a balance

More than half of Roblox’s 71.5 million daily active users are Gen Z, a cohort notoriously wary of traditional advertising. Adding immersive video ads to a platform known for gaming and community building required balancing the needs of users, brands and developers. 

“We spent a lot of time innovating to make sure what we were creating would work in our unique environment but also translate in a way that advertisers have the assets, the 15-second videos, that they could also then take advantage of easily,” Latham said. “We have this thriving virtual economy and we want to make sure that we are mirroring the real world wherever we can back to Gen Z — they blend the two 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 advertise elsewhere, according to an audience impact and brand lift study the platform undertook with Latitude. Video ads on Roblox also delivered lift across a variety of outcomes, from awareness and consideration to generating social media posts and website visits, per the study.

“Video ads offer a unique opportunity for our clients to introduce their brands to Gen Z consumers globally within popular immersive environments in a safe 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 statement.

Behind the scenes

The new video ads are available today through Roblox’s self-serve Ads Managers and will soon be available through programmatic media buying. Advertisers can shape their buys with genre targeting, brand suitability and audience estimator features. Later this year, they will be able to buy completed 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 year, verifying that ads are driving real engagement. This a first-to-market integration, per press materials. 

“IAS is dedicated to supporting advertisers wherever they are, and that includes providing unique, effective ad measurement solutions across emerging mediums such as immersive 3D environments,” said IAS CEO Lisa Utzschneider in a statement.

Separately, Kantar’s Context Lab will serve as 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 that are table stakes for new ad platforms, no matter the success of tests and trials.

“Until you can prove it in a way that a brand can make investment decisions based on the results they’re seeing, I don’t think you have scale or product-market fit,” Latham said. “The measurement partners are incredibly important for us to make sure that we are proving the value of every dollar that's 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 vice president 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 continue drawing marketers to its platform even as investment in the metaverse shifts to other areas like generative artificial intelligence.

“The way that we’re seeing Gen Z, in particular, interact, communicate, play, learn … all of that is happening in real-time on Roblox. That confirms for us that this is the next big media channel for all of us as an industry,” Latham said. “The behavior there is only amplifying and that’s something that we all need to lean into together.”