Roblox is planning to introduce advertising to its platform — and this is going to be particularly interesting.
Roblox is a video game enormously popular among children.
Players use building blocks to construct places, characters, objects, and more.
The platform currently has over 200 million players, making it one of the most successful video games of all time.
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Roblox went public in 2021. COVID-19 lockdowns sent video game usage soaring, and the stock climbed to an all-time high of $134 per share in November 2021.
Since then, the stock has plunged sharply and currently trades at around $40 per share.
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To boost revenue, Roblox is considering embedding advertising directly into the platform.
Because the game features a fully realized virtual world, billboards will be placed along Roblox's "streets" — just like in the real world — and ads will be displayed on them.
Is it right to target young children with advertising?
It's a question that makes many of us uncomfortable, and apparently the company as well — which has announced it will restrict ad viewing to users aged 13 and older.
Who would want to pay for advertising aimed at young children?
The psychology behind such advertising is about building a relationship with consumers from an early age, so they become loyal customers in the future. It's reasonable to assume that companies like Coca-Cola — brands built more on *brand identity* than on *product* — would be eager to reach young consumers as early as possible.
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Another way to advertise on Roblox is by building a virtual product line within the game world, mirroring the real world.
Nike, for example, could hire Roblox players to build bags, clothing, and fashion items bearing its branding — products that would then be sold to consumers within Roblox's virtual world in exchange for virtual currency.
In 2021, Gucci sold a virtual "bag" on Roblox for 350,000 Robux — the platform's virtual currency — which translated to approximately $3,400 in real money. More than the price of an actual Gucci bag!!
That said, video ad placements are more accessible for advertisers, since they require no dedicated team to build virtual products — they simply leverage a company's existing marketing strategies and creative assets.