Following years of concentrating their Roblox budget on custom brand activations, marketers are now focused on the platform’s programmatic advertising potential.
While Roblox studios see this as a positive development that will benefit everyone, they also expect their services to compete with Roblox’s programmatic offering as companies look for alternatives to immersive integrations.
Roblox companies have received hundreds of thousands of dollars from businesses in recent years to create and develop branded games like “Walmart Discovered” and “Barbie DreamHouse Tycoon.” An ecosystem of developer studios has emerged to satisfy the demand, with some studios becoming official Roblox partners last year. These custom-branded Roblox worlds have long been thought of as the default way for companies to contact players inside Roblox.
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Although Roblox has encouraged developers to establish their businesses there, the majority of the marketing funds that companies spend on immersive integrations went to studios rather than the platform. It should come as no surprise that Roblox has urged marketers to investigate the possibility over the past year through a number of strategic alliances and agency roadshows. Roblox’s programmatic video ad business, which was introduced in May of this year, represents a far more direct advertising revenue stream for the company.
Gareth Sutcliffe, the head analyst for the games industry at market research firm Enders Analysis, stated, “Given their financial status and the fact that there would be a very negative reaction from the market if they were to say that they’re ruling programmatic out of the gate, I don’t think that Roblox in particular has any choice at this point other than to offer it as an option.”
Through programs like the Roblox Partner Program, Roblox has enticed brands and outside developers to establish their presence on the site in addition to expanding its programmatic offering. According to the company’s executives, the platform benefits from a steady flow of fresh material.
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“Growing economic opportunities for our community developers remains a very important focus area as we continue to expand ways available for brands to connect with their key audiences on Roblox,” stated Ashley McCollum, head of advertising strategic partnerships at Roblox. “The success of our developer community and the growth of high-caliber immersive content are both critical to the Roblox platform’s long-term viability.”
The owners of Roblox Studios admit that, at least temporarily, the growth of their programmatic business may cause some marketers to shift their investments away from creating unique worlds. Roblox studios, on the other hand, are generally supportive of the platform’s growing programmatic advertising since they think it will draw more businesses to Roblox’s variety of marketing opportunities.
According to Ricardo Briceno, chief business officer of the Roblox studio Gamefam, “yes, there is a risk that some brands might decide to do a big programmatic campaign that might not optimize for their objectives.” However, the greater advantage is simply being. Because Roblox is too “new,” too difficult, and too daunting, I believe there is a lot greater danger for marketers to avoid using it. This reduces those obstacles.
Though less profitable than creating full-service branded worlds, programmatic advertisements also provide a viable new revenue stream for well-established Roblox studios with portfolios of already-released, well-liked games. “My company has had to increase its efforts to educate marketers about the advantages and disadvantages of both options,” Briceno told Digiday.
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“Brands will become more accustomed to the platform and comprehend the subtleties of activation once they begin to execute with a significantly lower barrier to entry,” he stated. “And I think there will be more integrations because you’ll understand it better now that you’ve got your foot in the door.”
In the upcoming year, Roblox developers expect some conflict between immersive integrations and programmatic advertising on the platform, but they think the ecosystem will eventually stabilize as businesses learn how to best utilize both alternatives. After all, a lot of marketers frequently utilize both the more specialized branded content and targeted advertisements that are abundant on other creator platforms like YouTube.
Working with leading agencies and brands has also made it abundantly evident that the kinds of advertisers and spending plans needed to create an immersive experience differ significantly from those for media buying or programmatic expenditures, according to McCollum. “These disparate budgets complement one another rather than conflict with one another.”
The conflict between Roblox’s immersive integrations and programmatic ad business is becoming more and more problematic as the company pushes to transform from a video game to a platform for all facets of virtual life. This underscores marketers’ relative lack of expertise with the platform. Brands will probably find that investing in both choices is the most successful course of action going forward.
Nic Hill, co-founder and head of interactive at Roblox Partner Program member Sawhorse Productions, stated, “There will be so many different ways to activate in the near future; it gives everyone more options.” He gave the example of his company’s recent “Beetlejuice Beetlejuice” experience, whose promotional campaign included Roblox Portals and other programmatic ads. “That’s one thing to remember: I’ve observed that campaigns that make use of everything work best.”
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