"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. 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. "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." "They are very unapologetically pro-player," said Brent Koning, executive vice president and global gaming lead at Dentsu. 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. "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. Roblox Chief Partnerships Officer Christina Wootton. ![]() 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. 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. Brands can already pay to sponsor experiences and virtual items. ![]() Other popular brand experiences include Vans World, Sunsilk City, and the My Hello Kitty Cafe. A Gucci virtual handbag was notably resold on Roblox in 2021 for more than $4,000. The company has said it intends to share its advertising revenue forecast at its November investor day.Īlongside Immersive Ads, marketers can work with Roblox to create their own virtual experiences in the platform. In prior earnings statements, Roblox has said that advertising and licensing agreements make up an "insignificant" proportion of its bookings. It's also expanding the agency partner program it announced in the summer, whose founding members included the ad agencies Dentsu and Vayner3. 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. Roblox has said it plans to open up the Immersive Ads self-service ad platform to more advertisers later this year. Roblox developers earn a portion of the revenue generated by Immersive Ads in the form of Robux, Roblox's in-game currency.Īdvertisers including NARS Cosmetics, H&M, Spotify, and Nascar have been among the early brands to test Immersive Ads. 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 introduced Immersive Ads earlier this year with two initial formats. "2023 was a year of testing and learning, 2024 is our year of scale," Wootton told Insider. This story is available exclusively to InsiderĪnd start reading now. TikTok announced earlier this week it was also exploring an ad-free subscription tier on its platform, but it's a small test limited to an undisclosed single market for now.Account icon An icon in the shape of a person's head and shoulders. Most notably, the social media platform X offers a Premium plan that does not entirely remove ads, but users see 50% fewer ads on their X feed and receive other incentives. In recent years, social media apps have begun finding alternative ways to increase revenue streams that are not heavily reliant on ad revenue, offering users the option to ditch the ads for a monthly fee. Meta's revenue relies heavily on advertising, with the company reporting in its second-quarter revenues in July that out of the $32 billion it generated in that quarter, $31.5 billion came from advertising. Users can continue to use either app for free but must give Meta permission to show the user personalized ads. Some of the pricing reported included $14 a month for ad-free access on Instagram on their phones or $17 a month for ad-free Instagram and Facebook on desktops. ![]() The WSJ notes that Meta officials had elaborated on the plans in meetings held with EU regulators last month.
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