Roblox marketers feel the tension—inside brands’ next challenge on the platform

For brands on Roblox, the platform’s staggering growth over the last two years—in which traffic has more than doubled to 70 million daily active users—is a clear validation of their early investments in the virtual world. But now, the real challenge begins. A key focus for brands heading into 2024 will be finding ways to keep young users interested in their activations amid a carnival of competing experiences and shifting expectations. New capabilities, such as generative AI and expansions to the platform’s growing virtual economy, must now be considered, while metaverse momentum—once the fanfare that fueled many brands’ debuts on Roblox—is no longer applicable. Check out the latest Ad Age events and award programs Marketers are starting to feel the tension. Brands and agencies that spoke with Ad Age addressed several manifestations of the challenge to retain users, from grappling over the duration of an experience to preventing that experience from devolving into an empty ghost town to facing the expensive and controversial advertising alternatives that Roblox offers. “You just have to keep feeding the beast,” said an executive at a brand that is active on Roblox, speaking on the condition of anonymity. Meanwhile, Roblox has turned its focus squarely on advertisers as a way to pave more revenue pathways. The platform launched a partners program in June with Dentsu, Vayner3 and other marketing organizations to streamline the onboarding of more brands. A bevy of new features, including in-game subscriptions and an expansion of items that can be sold in limited quantities, have also since been offered. Last week, Roblox announced more advertising products, including video functionality for portal ads that link directly to brand experiences within the platform. “Our goal is to be able to have a menu of ways to bring people in,” said Stephanie Latham, VP of global partnerships, who was hired in October to lead Roblox’s brand-focused operations. While these efforts cater to brands, they also demand from them more investment in their presence on the platform and, in turn, more pressure to get things right. Two years into the brand-Roblox experiment, excuses for meager engagement are wearing thin. To stay or to go Every brand that activates on Roblox has to decide upon the duration of its experience. Herein lies a tension for many marketers given the uncertainty that their activation will both garner initial success and maintain success over a long period of time. Brent Koning, executive VP and global gaming lead at Dentsu, unequivocally advises brands against short-duration experiences. “Gamers are the smartest group of consumers,” he said, adding that they have every reason to demand their communities be durable. But in order to provide this durability, Koning offered a familiar notion: “feed the beast,” or deliver a steady stream of new content to satiate existing users and attract prospective ones. IHeartMedia’s iHeartLand has hosted over 30 events, mainly virtual concerts and podcasts, since launching in September 2022. While these moments typically result in a surge of visitors, accounting for the bulk of the world’s roughly 1 million monthly users, retaining these users in between such events has been a challenge, said Gayle Troberman, iHeartMedia’s chief marketing officer. Related: Inside iHeartMedia’s metaverse plans as it enters Roblox The radio giant wants to provide more gaming experiences during this downtime, Troberman said, as well as integrate more of its franchises in order to appeal to a wider audience. Roblox contains numerous gaming models for brands to incorporate, such as tycoon games, which are task-oriented and focus on developing a project, and adventure games, which are more about exploring a unique map. Verizon, which launched a Roblox experience with The Metropolitan Museum of Art in the summer, is still deciding whether its world will be persistent or a short-term experience. “Every brand is looking for some kind of permanence,” said Mike Wente, VP of creative marketing and operations at Verizon. Yet a confluence of factors could direct a brand toward impermanence. The Met, for example, is constantly updating its physical exhibits, which could demand a lot of upkeep for a Roblox world intended to be a virtual extension of the real-life museum. Short-term experiences are doable if they can simulate the format of real-life pop-up shops, said Avery Akkineni, president of Vayner3. In these scenarios, a brand can jump in, quickly drive engagement and then jump out as it sees fit. Taking advantage of pre-existing worlds, what Roblox dubs “integrations,” is especially conducive for shorter plays. Foot Locker, for example, deployed its “House of Play” event last fall inside a popular game called “Club Roblox.” The tie-up, which lasted for two months, is reminiscent of how a brand might set up a booth at a site of heavy foot traffic, such as a music festival. A Foot Locker spokesperson declined to provide details on the number of visitors to the experience Home Depot in March opted for a similar strategy, building a small presence of children’s workshops within Redcliff City, another favorite space. The experience is still technically available, but its overarching effort, supported by a synchronization with real-life workshops, ceased after two months. Home Depot declined a request for comment. Haunted by ghost towns Perhaps the greatest fear in the metaverse is that of the ghost town, in which once-exciting experiences lie idle, abandoned by users and, in many cases, the brands themselves. Decentraland, another virtual platform, experienced this fallout when media outlets discovered last fall that it had fewer than 1,000 daily active users, despite a billion-dollar valuation. The Sandbox, which was consistently announcing brand partnerships a year and a half ago, has also shown little life. The lack of new entrants in the time since these reports is a testament to the damage done. But even though Roblox boasts over 70 million daily active users, brands are not insulated from their experiences becoming ghost towns. Forever 21’s “Shop City,” which launched in December 2021, is currently experiencing very few visitors. Upon multiple occasions in which Ad Age recently paid a visit, the world was virtually empty, seeing anywhere between zero and six users over 24-hour windows, as indicated by data on new badge activity. Forever 21 did not return a request for comment. Similar scenes were evident in Chobani’s “Oatmilk Cosmic Race” experience, which launched in June 2022, and Red Wing Shoes’ “Buildertown” experience, which launched in November 2022. The Met’s collaboration with Verizon is also seeing very little traffic as the two entities decide how to proceed. The cause of these ghost towns—all still available to play—is unclear, but a lack of “feeding the beast” seems a likely factor. The Met’s experience has not been updated since August, around the time it launched; Chobani’s has not been updated since February. Red Wing Shoes’ was last updated just over a month ago. Supersocial, a company that develops Roblox experiences with brands, recommends that its clients update their persistent experiences at least every two weeks, according to Yonatan Raz-Fridman, Supersocial’s chief executive. Spokespeople for both Red Wing and Chobani said their experiences were initially launched alongside campaigns that have since ended. While keeping an empty experience online comes at no additional cost, a brand runs the risk of experiencing unwanted public attention, as in the case of Decentraland and The Sandbox. An alternative, Raz-Fridman said, is to switch the experience to private mode, which disables users from entering—also at no cost. Another issue may be that some experiences are being unintentionally buried by Roblox’s discovery algorithm. Neither Chobani or Red Wing Shoes’ worlds appear when searched for on Roblox’s website, regardless of the keywords used. Roblox told Ad Age that it is aware of the issue and looking into a solution. Negative reception could be another hindrance. Forever 21’s “Shop City,” which hasn’t been updated since July, has only 35% positive reviews—indicated by a “thumbs up”—and 65% negative reviews, or “thumbs down.” This picture is remarkably different from that of most branded experiences on Roblox, which tend to boast between 75% and 90% positive reviews. Of 16 brand experiences that Ad Age assessed, only two others maintained “thumbs up” percentages below 70%: Verizon and The Met’s world, at 69%, and Chipotle’s “Boorito” experience, at 66%. Chipotle did not respond to a request for comment. Look back: Chipotle has Roblox experience for National Burrito Day The takeaway is that most brands seem to be scoring well with users, and avoiding becoming ghost towns in the process. Mattel’s “Barbie Dreamhouse Tycoon” has amassed over 65 million visits since April and boasts 89% positive reviews. Walmart’s “Discovered” world, which launched in May, has brought in over 8 million visits and has 95% positive reviews. To be sure, some brands entice users to give a “thumbs up” in exchange for rewards, so the metric is not entirely reliable. But it does provide a glimpse into how users are looking for quality in branded worlds. Common ingredients for a successful experience are a satisfying and repeatable gameplay loop, the potential to grow through new content and offerings and, most importantly, a clear set of objectives, according to Raz-Fridman. “Within one minute of entering a world, the user has to know what they need to do,” he said. Just because a brand is getting things right, however, doesn’t mean they aren’t haunted by the prospect of becoming a ghost town in the future. The brand executive who spoke about “feeding the beast” said that their brand feels the need to update its world almost weekly in order to avoid user attrition. This means new games, giveaways and characters that are constantly flowing into the experience, requiring not only significant time and energy but money, too. According to Raz-Fridman, costs to upgrade an experience can range between $10,000 and $100,000 a month. These numbers do not represent Supersocial’s quotes, but rather platform standards more generally. Tricky advertising alternatives Roblox has been ramping up opportunities for brands to activate on the platform without having to build an entire experience. One such offering is through virtual items, which brands can create and sell via Roblox’s virtual economy. Young users are eager to participate; nearly 1.6 billion virtual fashion items were purchased on Roblox in the first three quarters of 2023—a 15% increase from last year, according to company data. Dentsu’s Koning sees the virtual economy as a key factor in retaining consumers, even after a notable event has passed. “If you can bridge the gap in the spending loop, that’s where Roblox is different,” he said. But going this route can be an expensive one, with costs for a single collection ranging between a few thousand dollars and upwards of $50,000, per Raz-Fridman. According to the anonymous brand executive, “[Brands] need other reasons for being there.” They said that high costs in developing, distributing and marketing these virtual items, as well as low margins—given that young users don’t have much money to spend—have caused challenges for their brand. AI marketing blog How brands are using ChatGPT, DALL-E 2 and other tools Read more here IHeartMedia has sold virtual items, but not with the goal of generating revenue, Troberman said. Wearables have become a means of spreading awareness of the brand’s presence, although smaller brands may be less willing to shell out for promotion that may not even reach users. A more predictable way of promoting is through in-game ad placements, which has become a key focus in Roblox’s bid for brands. The platform unveiled so-called immersive ads last fall, which include billboard space and portals that take users from one experience to another. This month, Roblox announced that it is testing video functionality for portal ads. According to Koning, brand experiences typically cost at least $100,000, plus the price of a supporting media strategy. An ad-only approach, on the other hand, is less expensive, in the range of tens of thousands of dollars. Still, these costs pile up, especially if a brand wants to stick out amongst the crowd. The brand executive said their company has had to weigh the cost-effectiveness of such placements when considering its wider budget. Moreover, traditional advertising is not Roblox’s bread and butter, and the platform has previously fallen into hot water when pursuing this interest despite its primary status as a virtual playground for kids. Last year, ad watchdog group Truth in Advertising (TINA) filed a complaint with the Federal Trade Commission alleging that Roblox was improperly advertising to children. The platform has since updated its advertising standards, but TINA claims that numerous brands may now be in violation of these new policies. In response, a Roblox spokesperson told Ad Age: “We have strict guidelines for developers that want to promote or use ads within their experiences … and it is a creator and brand’s responsibility to determine whether their content is an ad.” Nonetheless, Roblox only seems to be heading further in the direction of mixing advertising materials with non-advertising content. In-game paid subscriptions officially launched this month, and the platform announced that it is testing the ability for brands to use web-linking technology in their experiences to guide users to their websites. Whether these features will make life easier for brands, or only present more challenges, is a verdict to be reached in 2024.

Roblox marketers feel the tension—inside brands’ next challenge on the platform

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