How to Bring Brands to Roblox

[Music] welcome to the novic gaming podcast where it is our mission to explore the business and future of video games we bring together the industry's brightest Builders investors and thinkers to keep a pulse on current events dissect emerging Trends and games share Lessons Learned and have a great time this podcast is also part of novic growing ecosystem which ranges from free and premium research to Consulting and AD advisory services for more information visit [Music] www.nic.edu means either building complex infrastructure yourself or choosing among Legacy providers who's inexperienced in games or questionable

reputations pose real risk to your business luckily there's neon the dtoc platform built for games as a merchant of record with customizable web shops optimized for conversion and modern apis that let you use your existing liveops tools neon is trusted by some of the biggest names in gaming to help you sell direct without the typical overhead to start selling direct and finally take control over your full player experience simp L head to Neon pay.com or check out the link in the show notes and with that let's jump into the episode welcome to the novic gaming podcast I'm your host David Taylor and today we're diving into the fascinating growth area within the gaming World brand activations on Roblox over the last few years brands have been increasingly gravitating to platforms like Roblox as a way to reach younger audiences in 2023 alone we saw 240 brand activations on Roblox which was 100% increase from the year prior in terms of

Revenue this contributed over 80 million in brand spend making up roughly 10% of roadblocks developer earnings in 2023 from the brand perspective results can vary greatly depending on the execution for an Advertiser the cost per play session and a branded experience can range anywhere from as much as a dollar to a fraction of a cent critical decisions include whether a brand builds its own experience or integrates into an already popular one and Hell well that brand resonates with the Roblox audience and the game genre with such uncertainty around outcomes much of the spend so far has come from Innovation budgets rather than traditional marketing allocations to explore these Trends further and what needs to happen for advertising to further scale on Roblox I'm thrilled to be joined by three Veterans of the Roblox advertising space each with their own unique approach Matt Edelman president of Super League Gaming Harry bonck head of growth at Vex and Evan zerki CEO of Turning Tables welcome to the podcast guys

thank you so to kick things off maybe everyone can just go around introduce themselves um share you know what is what is your company's business model and and what game or branded game uh you're best known for maybe we can start start with Harry just because he's in the top right corner of my screen fair enough uh thanks David for the intro great to be here um I'm Harry I'm head of growth here at voldex I've been at a company for two years now I've been in games for about a decade uh I was in mobile games before I joined uh Alex for the team here at fex in the ugc gaming space I'm fascinated by it it's amazing the growth has been incredible um and yeah happy to be here uh both on the podcast and and in the industry uh in the space so uh a bit about Vex and what we do Alex founded the company back in 2015 at the r age of 14 years old which is incredible um fast forward to today Vex is now a 60 person team and we operate three of the top games on Roblox those games are driving Empire the

number one racing game and recent Innovation Award winner for best collaboration uh the second game is Ultimate Football which as of tomorrow will be renamed to NFL Universe football uh it's the number one American football game on the platform go a bit more into that if if' like to later David and uh we also operate the original Roblox Dundon crawler called dungeon Quest kind of similar to Diablo uh but the Roblox version of it um and so those are the three games that we live operate and our business model is acquiring top games from developers and then scaling them up we put an entire development team on it product manager analyst Dev is marketing all that all that great stuff and we and we uh fuel the growth of the games by live operating them um so a few examples of dby Empire we brought in licensed cars and and scaled the game from B initiative as well as others uh also football like I mentioned the NFL is coming in we expect a lot of growth from that and dungeon Quest just optim ations

onboarding of users technical stability uh different monation vectors all that great stuff awesome and this sort of brings up a um dichotomy you know there's licensing and then there's advertising and so it sounds like you guys have done more of the licensing stuff but I believe you guys also do some advertising well as well in these in these games to drive additional revenue is that correct that's right that's right yeah primarily we've been um primarily we've been operating the games that's that's our business model we acquire games operate games and we uh look at the games revenue from in game purchases premium payouts advertising on platform uh We've recently over the past year leaned more into Brands having brands in the game and brand Integrations um so that's a new growth factor for us and it's something that we've been doing a lot more of um but yeah traditionally uh yeah we we've done we've done we've done on both sides both the licensing side of things as well as the brand advertising side of things um so so yeah

happy to go into both awesome thanks Let's uh pass it over to Evan then uh yeah so I'm Evan I go by Evan bwan on the Roblox platform I have been on uh on roblox actually for over a decade at this point I joined as a player in 2013 um and then quickly over the next you know couple years uh around 2015 2016 uh started as an influencer uh creating content on both twitch and YouTube from there around um 2016 to 2018 I uh had a lot of interest in becoming a Roblox developer so I uh composed soundtracks for a lot of games like Tower of Hell miners Haven theme park tyon 2 uh and a bunch of others and then quickly got into doing um development of my own games so I've worked on games like jet Wars 2 avatar outfit Creator blobbing simulator uh and a bunch of other ones um so that's a little bit about me uh my my company Turning Tables we founded the company around two years ago uh with our first title avatar outfit creator

since then we have gotten about 200 million plays on that game and integrated about 25 Brands within the last like nine months just in 2024 so far so we've seen Brands like PGA Tour Sour Patch Kids um fresh cut Benny andelo a bunch of other brands as well integrate in and that's our our big thing that we do now is is integrating Brands into our existing portfolio of games uh Beyond to that we also create original experiences for Brands so like fresh cut and sour patch kids um we created a game called rapid Rumble with fresh cut and then partnered with a studio called poly count to make the Sour Patch Kids tycoon game on Roblox um beyond that we are also an a ugc agency so we have uh over 700 ugc items that we've created for brands in 2024 uh making us the largest Agency on the platform um then we're kind of still growing from there um yeah that's pretty much it awesome and I'm excited to sort of um ask you maybe a little bit later about um the ugc side

of things because I think that's a really interesting angle as well but let's pass it over to Matt uh for now sure uh thanks for having me on great to meet everybody I am the President and chief commercial officer of Super League uh our primary business is helping Brands and IP owners um get onto the platform uh we work on other platforms as well but Roblox represents the majority of our business uh we uh worked with I think about a hundred brands in 2023 and we'll probably Eclipse that this year uh and we do that through uh a number of uh sort of complimentary capabilities um one of the key elements is of course our development studio uh and and probably most recently we were um recognized for bringing the Olympics to life on Roblox so we were responsible for building Olympics World which celebrated the Paris Olympics and then the um par

Olympics uh or par Olympics um and that was you know very successful our partners were both the ioc and visa and we were able to collaborate very closely with Roblox because it's such an important cultural um event for them uh as well on the platform we uh our development stud has built a number of of uh experiences we've we've got um uh I guess roster of an Eclectic mix so we built the first Broadway show inspired experience in Hamilton um we acquired a studio a couple of years ago that um had built and and were still operating experiences for Clarks DAV and Busters Chipotle um and uh we have a handful of others that are that are out there and pending we also have a proprietary uh technology and product piece of the business business um we have an SDK that

10,000 experiences on the platform have signed up to use uh those 10,000 experiences reach about 150 million monthly active users on on Roblox and so um this uh set of developer tools that's baked at the SDK gives us great reach and information um and data that we can bring as um you know a good asset uh for our partners and a variety of levels and one of those probably more than others is uh what we have as uh interactive content modules we call popup experiences that we are able to build and distribute um across multiple experiences and effectively um they are uh you know uh playable um drag and drop experiences that a developer can add to their game uh and we've done that with uh dozens of Brands ranging from Maybelline in the beauty space to Old

Navy as a retailer um to 7-Eleven we're also able to run brand LT studies for our partners through our SDK which which we've done with um just a wide roster of businesses um and so we've really tried to be both a product oriented company as well as a Services oriented company to you know help third parties access the Roblox audience in a variety of creative and Roid driven ways awesome yeah so I mean all three of you represent really interesting as angles of of the Roblox platform I mean Matt sounds like you guys are are very much invested in advertising tech and and um you know supporting Brands as they as they come into to advertise on the platform are you guys at Vex are focused on live Ops and and sort of growing games games and Evan you're sort of

sitting in between both you've got games and you've you know You' you're you're you're also you know enabling Brands to to advertise as well through both ugc as well as original experiences so I'm really excited to have you guys on all on the podcast I would love to just hop right into it and and you know the first kind of question that I have is why are Brands coming to Roblox like what is can you help us understand the brand perspective of what what's in it for them and and why should they why should they come and and maybe we start with Matt um given that you know you guys have an interesting advertising platform should clarify one thing you know so um a couple of years ago uh Super League through our SDK which is called super Biz we like using the word super um but we don't own the word super on Roblox there are a couple of actually pretty good games we would love to have on a portfolio that have the name super but no self luck good disclaimer yes so we um a couple of years ago through rdk we

had a uh what I would what I would call our um a series of of homegrown ad units that were very widely displayed um and available in games on the platform and so we were running our own video ads billboard ads animated gif um advertisements and that was all connected to our SDK and we're you know bringing in a fair amount of revenue for developers um and then of course Roblox determined that you know having more control around the ad ecosystem made sense for them both from a user safety standpoint from a revenue standpoint from a value you know proposition to Brands and so we became a partner uh with Roblox in helping to bring their ad uh product to Market deprecated um the ad products of our own that were duplicative to what is now um the Roblox imersive ads platform and so what we really have focused on instead is looking at ROBLOX as an experiential

and content marketing platform U so as to be distinct from a more traditional ad uh solution that really is represented quite well and um comprehensively by roblocks is you know native immersive ads um and and in that regard we we look at the reason Brands you know care about the space being that it is the most deeply engaging um place on digital platforms to connect with an audience um there is no equivalent on digital and it is the closest thing in digital to real life engagement uh and that's really why Brands get excited about a proposition there are a lot of things that brands are still um interested in seeing prove out longer term that I know we will start to cover uh but but to me that's really the Crux of it is there is a massive audience a highly engaged audience I think you know all of us know but maybe not all listeners know that the average member

of gen Z spends 156 minutes per day on Roblox and if you think a little more broadly about 3D digital spaces the amount of time the average member of genz spends on Roblox and fortnite combined is greater than the amount of time an average member of gen Z spends per day on YouTube and Tik Tok combined and and so there's just no equivalent uh to the kind of relationship you can form if if you're able to be a part of of that time spent um and so that's really what drives you know the highest level of Interest anything to add Harry and Evan yeah yeah happy to I think I think mat Matt nailed it um you know users are spending two and a half hours a day on Roblox which is more than any other platform more than Tik Tok more than YouTube and Brands since the beginning of time when they're advertising marketing they want to be where the attention is so users attention that the user base they want to reach or the audience they want to reach if they're on Roblox and that's where they need to be if they're on Tik Tok that's where they want to be so wherever they are so it used to be driving on a highway they put the Billboards up then it was you

know they're on listening to the radio so they had radio ads then it was watching TV so they got tv ads in there and and a certain point in time being on those platforms in front of an audience was the most impactful way to advertise to them there was less competition there was you know just people like everyone tuning in there was three channels back in the day so you you know people are watching one of the three channels at 800m watching a specific show so that's where we are today with Roblox there's a ton of users on that platform gen Z and gen Alpha audiences that's where they are that's where their attention is so Brands want to get the attention of those users those people that then that's where they need to go and a big difference between advertising to a user on Roblox versus on Tik Tok is that you know we say in gaming users are are leaned in right it's a leaned in audience because they're actually engaging they're active versus being on Tik Tok where they're just scrolling or YouTube where they're passively watching at times so on Roblox they're they're leaned in in gaming they're they're leaned in um so yeah that's that's that's a really big deal

um and I think um I I'd listened to that the the podcast um that you had recently with Eve from Spin Master and he was talking about how Roblox is all about you know self-expression and creativity and that's what this generation is all about so when you bring your brand to the space which she's done successfully um you know it's it's a recipe for Success which is is huge so nice yeah shout out to Eve yeah shout out to Eve I think something else I i' add too is that a lot of brands look at ROBLOX as you know a specific game right Roblox is not one game these are there's a lot of small communities on here and when I use the word small you know I I don't mean a thousand people actually what I mean is actually a few million but you know in comparison to something like Tik Tok you know there's there's these Niche communities uh that are on Roblox just like how there's subsets of of social media platforms and each one of these games whether it's an FPS game whether it's a princess roleplay game whatever it may be has a a very specific type of audience um as I'm sure all of us know

you know our we have games in our portfolios that have a much uh larger you know us female audience or you know lar much larger uh Indonesian male audience or whatever it may be right and so I think when advertisers are coming to the platform that's one thing that they really have to know is that you can actually do a decent bit of targeted advertising as long as you are partnering up with the the right games right uh and that's what I think the power of Roblox really is is just how how broad it is across all of the games that are on the platform makes a lot of sense yeah and so just to and just to close the loop on things I think you guys are talking a lot about sort of uh brand exposure reaching audiences I think ultimately what what brands want is to close is to basically grow brand affinity and brand recognition right like be recognized but then also have a positive Affinity associated with their brand um just to throw in you know my experience over at Super social we did a we did a survey um

off of one of our branded experiences and admittedly I I've always been a bit of a skeptic of of branded experiences but we did show like off of the survey that after people played our game you know there was a almost doubling of of both brand recognition and brand Affinity from uh like willingness to purchase this Brand's products so uh you know even if the numbers might be lower for Branded experiences they're still appear to be impactful and and you know I think the last the last thing that everyone's trying to solve is is actually conversion but um I think that's still uh in the in the works um but um yeah so just to to sort of just yeah go ahead man you know David I just you know we run uh brand list studies every month um there are some months we run you know um you know more than you know double digit brand lift studies um and we also do research through our

brand lift study product uh and it and it runs across you know multiple games through our SDK so we're able to you know get thousands if not tens of thousands of responses in in a very in very short order and we're generally seeing um when it comes to Brand lift for a a marketer that puts themselves on the platform in some reasonable way so relative to the control group I mean we're seeing on the low end um 14% lift on a favorability level um but on the high end you know in the 20s and 30 perents when it comes to Brand preference um and awareness and so it is undeniable that there is a powerful impact um for a marketer in getting themselves on the platform um that will only take the industry so far to your point um Roi is going to be increasingly

important and that's what's going to move money from experimental budgets which you referenced to more um Regular you know media commitments marketing immedia commitments again I know we'll we'll likely get get into that dialogue as well but um the uh the opportunity just from affinity and awareness is clearly there awesome and yeah this sort of brings us to the the next question which is you know how are you each of positioned to sort of serve this need for Brands uh within within the Roblox space you sh a little bit in introductions but just wondering you know if you could give us an idea of you know if each if each if a brand were to come to to you and ask how can I activate in Roblox with you guys what would what would be the opportunity for them um so in talking to in talking to Brands when they come and talk to me or I'm talking to them it's about them wanting to get in front of this audience right so the best way for them to get in front of this audience is to go where the audience is so we can say that

players are on Roblox but they're in specific experiences within roadblox right so if an Advertiser wants to reach Sports enthusiasts that are primarily male aged you know 13 to 24 then Ultimate Football or NFL Universe football is the place for them to reach these players at or these users at right if they want to reach card enthusiasts or driving enthusiasts with a uh you know that are worldwide with a global presence then dvy Empire is the best place for them to be so generally that's where the ation starts is what is the audience that they're trying to get in front of and see if there's a match an audience match in terms of demographics Geographics all you know and interest and and all that great stuff so we see if there's a match first and foremost and if there is then we can talk about what type of opportunities or what they could do to that'll be know natural for the game both for the brand and for the game that that could make sense so um a good example is we had an integration with ship last July where we you know they have their a same day delivery service don't by Target and they Incorporated a minii game into driving

Empire and the mini game was you open up a cell phone you're you're the ship driver you take an order you pick up the goods at a at a store at a place and you deliver them to you know to to the person that ordered and it's like one of your friends and that's like a simulation of real life that's what they could experience inside of the real world so it wasn't a farfetched idea for ship to have this within driving Empire was very it was a very natural fit so the delivery guy has a Lamborghini right except the delivery guy has a Lamborghini that's right very real real istic extremely realistic um Lamborghinis were were this year so they were their last year for deliveries but yes exactly it's a great point it's a great Point um but yeah so just things that are natural things that are fit with with with with a given audience I think it's extremely important and like getting in front of an audience that already exists I I'll say that again and that's the point that I want to uh really h on here is that it's really tough for Brands they want to come to the plat platform get in front of an audience you can't just build it and expect people to come with like a new experience that's built from scratch you

need to build some a strong game a solid game a strong core Loop you have to Market it get users in have them share with their friends and have that word spread and that's not necessarily a recipe for Success um if you want your brand to be in specific types of users then just go to where they are which is in specific experiences within Roblox they're on Roblox but they're living within specific experiences and brand need to find them where they are I think that's a really great Point how about you Evan yeah I mean honestly I I agree with everything Harry said I I've worked with brands on original experiences I I have um I worked at gamef for a long time I actually worked with super social for a long time and you know from the learnings that I received there and learnings that I've you know gotten from running my own company now um you know nine I would say 99 out of a hundred times honestly uh it's always going to be more expensive for a brand uh and cost more per user for a brand to make an original experience on Roblox you know themselves uh you know if you are

meeting users where they are you're integrating into into games uh you know like both voldex and Super League do I think that's that's where a brand is going to see you know whether it's now or in the future you know that sort of Roi um we see it all the time in our in our game avatar outfit creator with with uh clothing brands integrating in you know we've had probably about uh five different clothing companies integrated into our game who are releasing their own ug youc on the platform or wanting to promote their their latest you know physical um you know shirts and and uh apparel uh with Insider Roblox and they're coming into our game because we have uh you know anywhere from 65 to 80% of our users that are you know female around the age of 13 and in in the US so you know if these brands are coming into our game and and um in integrating in it's it's perfect for them right they're they're meeting the community you know where they are and they're not having to

spend six figure budgets to to do that right they're have they're spending even sometimes depending on what they're doing you know low five fig budgets um you know to to be in our game and interact with these players you you should be charging more Evan oh yeah yeah we we have multiple levels right yeah this is yeah great this is the perfect place to for us to all share advice and and learnings one one question for you though Evan is one of the things that I've been sort of scratching my head about is I see a ton of brands that are interested in in ugc right but I you know I don't see the type of scale that you that you see on some of these experiences like you know driving Empire for example you know with a ugc you're entering a Marketplace that's very saturated it's hard to stand out there's a lot of you know items that look exactly the same as one another so from your perspective what's the opportunity that brands are pursuing when they explore ugc and just so it

just so the audience knows ugc are these uh cosmetic items that you're able to bring across experiences they're basically attached to your avatar and they can they can be brought um to to any experience that you you go to so um you know players definitely value them there's just a ton in the market like you know I don't know are there billions of of of cosmetic items you know out there that you could choose from so how does a brand stand out um in the in the ugc space right so how we usually see ugc especially when it's promoting either an original experience or an integration is we use it as an advertising mechanism we're not having these Brands spend you know six figures using Roblox as advertising dashboard to run sponsored ads or portal ads or things like that um typically those have much higher uh cost per plays what we're typically doing is we're giving away for ugc to um to players by by completing some sort of quest in the game whether

that's a scavenger hunt where they have to run around at the map and find a soccer ball or you know that's completing a a much uh more complex Quest like an obstacle course or um or get a certain amount of kills in a game if if that's you know the objective right so we use ugc as basically way to drive players to these these original experiences and Integrations and that works extremely well for us um because you know you're actually rewarding players for for coming in and doing something uh not only is that really good for your metrics but Al it also makes players more engaged with whatever it may be that you're wanting them to engage with a great example is we had a glasses company called zeni integrated into avatar outfit Creator and player's goal was to run around the map and try to find these five glasses that were hidden around and by doing so you know you would see the glasses and you'd be able to see all the different kinds of designs of glasses that you can buy from their website and so it was kind of

getting people used to seeing those uh and then at the end uh they would get one of those five glasses that they found as a free ugc item that they can have on their Avatar and we've seen uh that a large percentage of those users are actually still wearing those glasses on their Avatar um you know because they got them for free and it it encourages them to um you know go and complete this Quest but even beyond that they look cool and they uh they're an item that players actually would want otherwise so when you're creating ugc and and you're a brand that's coming under the platform you you can't just create random things it needs to um make sense for the platform right you can look at some of the top items that are are bestselling on the marketplace and say okay how can we make our brand fit into that uh don't just slap your logo on it Zen's logo was was barely on those items just kind of on the side like they naturally are on their glasses in real life um you know but even even for Brands like fresh cut we released a lot of ugc items with them

that didn't have their logo at all but it you know allowed people to uh feel like it was an item they want and they interacted more with the brand because of that I could just say I mean I think David if you if you um if you know the data is pretty pretty powerful 47% of gen Z expect to discover a brand for the first time in a gaming environment that's how much time they're spending there that's the volume of people who spending time in gaming environments and a lot of that brand Discovery does come in a place like Roblox from ugc so the opportunity to bring ugc items that have your brand attached to them to that audience one out of every people is probably discovering that brand for the first time is a pretty profound um entry point and to evans's evans's you know point the notion there becomes the user walking around with a billboard with your bread attached to it and that is exactly what happens in real life look think of every you know um piece of

clothing or accessory that you have ever seen somebody else wearing or carrying and saying to yourself I want that this happened to me at RDC in fact I saw an awesome pair of shoes and I went home and I bought them and they were real life shoes not virtual shoes um and and so I think that's that's kind of what ugc serves for a brand today it is not a revenue opportunity of consequence yet um it is a Revenue opportunity of consequence for top ugc creators and it is a part of how the creative class that has emerged through the ugc gaming world are making a living and that's exciting uh but that doesn't yet translate you know um to a brand opportunity in terms of Revenue um so I think I think those are some you know important uh considerations around ugc if if you don't mind I do want to touch upon your your earlier question which is um just how you know marketers uh are are

thinking about or could be thinking about Roblox and there's a number of parallels that are constantly drawn because of the concept that ugc gaming platforms are very much like ugc content platforms outside of gaming and the most you know prominent of course being YouTube so uh you know we just started thinking a little bit more about well what does that framework you know really mean for a marketer and and some terrific parallels not just in the ugc side of it but in terms of how marketers can engage so if you think of YouTube um I always use Nike because it's an easy you know brand that everybody knows if you're Nike you might create um your own channel on YouTube but you know that that is not the place where you are likely to get the most engagement on the platform it's a beach head you need to be there you're definitely interested in having a place where your videos can show up and be promoted if you have a budget or something important that you want to say through video content But ultimately it's not going to be easy to

compete with Native creators on the platform so then you go to the next stage how do you engage with Native creators and on YouTube there are really two high level ways you do that you engage a Creator to create a custom video you invite an influencer to go up to the Nike sneaker Factory and do a video on how sneakers are made they put that on their channel it's there for three months and it gets an enormous amount of viewership based on that u a Creator's existing audience you don't have to buy any advertising to promote it the next layer down is you're working with a Creator in a lighter way it's a Creator shout out at the beginning of one of their natural videos they're talking about the great Nike sneakers that they're now wearing that Nike sent them that are super cool and that you as a viewer should check out to possibly purchase and check the link in the description of the video and in the comments and maybe one other time during that video you'll see the Nike sneakers because the influencer will put them on you know on camera the last layer of engagement on YouTube is buying ads and you can buy YouTube specific ads and you

can buy IAB standard ads on YouTube in their closed ecosystem that's plugged into the entire programmatic stack that just replace YouTube with Roblox and you have a very similar situation you can build your own experience on Roblox if you want it to get substantial um audience engagement you are going to have to spend money to promote it um Harry mentioned that very clear but it is important you want to have a beach head your Beach head might start ugc items your Beach head might start with an event-based experience that's only meant to get attention for a weekend or a month and you're not trying to be in the live Ops business out of the gate otherwise you're going into creators and you're doing incredible Integrations with you know um with voldex games or or with Evans game or you know one of the 10,000 games in our Network and you're asking to be incorporated into those games in a very organic way and that that integration is baked into the gameplay and it feels natural and feels authentic I guess is

is the overused word but it's true um and you might have that integration live for two weeks two months or a year depending on the budget you can also go one layer down this is where our our popups are one of you know sort of the interesting solutions that we think are out there where the developer doesn't have to do any work just like a Creator on YouTube does very little work to do with shout out you drag and drop an interactive content experience into your game and it's a light you know content module that players can enjoy and connect with the brand through that and then the last way is you can now buy ads you can buy ads on Roblox you can buy Roblox specific ads you can buy um IAB standard ads and they're working their way towards you know adding in all of the product and measurement features so that the full programmatic stack you know sort of applies um in in in the same ways that it applies to a platform like YouTube yeah I mean I I guess I I I see what you're saying and I think on the Branded experience side like the the parallel I draw to yoube you would be like would you go watch Coca-Cola's

YouTube channel probably you know probably not Coca-Cola is probably better off you know putting their your products in you know an influencer who's a big fan of of Coca-Cola who you know maybe would do it anyways or maybe drinks Coca-Cola and is already doing the advertising for them so I think that's where I'm I think like I agree that it is it does seem to follow YouTube very closely and in that way my sense is that brands are learning that building your own experience isn't the you know the best way to drive engagement if that's what you're after and I I hear your point on it's sort of just you know you want to have a your you want to own your channel but if that channel is only reaching you know 0 Z one% of the platform and you're spending you know dep to seven figures on it then right it depends right like if you're you know if you're an entertainment company and and are launching a movie you know it's you know

Roblox experiences kind of taken the place of what used to be movie based websites they went away for a while and entertainment companies were really only marketing on social platforms they now see Roblox as a place where it's a little bit more interactive and in-depth and engaging than what you can accomplish on a social media platform or a digital video platform and so it's kind of become the new website for launching a movie for that demographic um and so there are times where a marketer you know can have an effective presence um but you're absolutely right you have to be prepared for a long-term investment um and you know that money might be better spent uh working with an existing experience an existing Creator I'm curious about the shoes Matt what what shoes were you inspired to buy I want to see them just like that you're talking about the Nikes on the flashing on the screen they're a pair of I have a pair of on- running shoes right now I'm actually wearing them I'm not going to kick them up because I'll probably hurt something but um uh uh it's a different pair of on-running shoes that that I I'm waiting waiting to

be delivered and maybe the next time we're all on video I will I will hold them up nice I thought it was Richard Sims splashy n keys that he was rocking they were they were fresh they looked really good during his talk yeah I I can't pull those off are you kidding me shout out to Richard um yeah one one thing to add on I know this this topic are on ugc items and and ugc wearables I think it's really interesting that there are some items that exist on robot that are just worth a crazy amount of money right now right like that that Adidas item that limited that dropped that's like that's like worth like $20,000 right I'm skeptical about that I feel like this is nfts all over again where you know they just buy their own product and then make a well I'd love to provide some context there uh there there were two there were two items uh or two quantity two you know two that were minted whatever you want to call it of that item uh it was two Roblox developers that bought it Simon blocks and someone named coffee nerds that

works on um works on simple simple games so these are creators that earn all their roblo from from their Roblox games so in terms of the roblo p uh purchase rate right so when you when you ever you're buying it with USD and buying the buying the Roo yeah it's $20,000 but on the on the flip side when you're actually dexing it it's about $77,000 so the value to the two creators it was about $7,000 that they were spending you know of money would have received from Roblox so it's still a pretty significant amount um you know I would argue if they had increased that to maybe 10 or 15 people uh or mint mint 15 of them probably wouldn't have sold out or at least sold for that much um so inherently I think it's because you know I I mean in my account I've got a few million Roo I I could afford to go buy that effectively but I think it's all about uh you know how much uh clout you'll get on Twitter compared to anything else Evan you nailed it right there right you just you

just I mean it's kind of like put a nice button on what we were discussing because yeah there are only one class of people who can buy that type of item and those are developers who have earned Roo by having games that earn money from Roo transactions in their game uh maybe some ugc creators have earned enough but even then I'm not so sure they could afford easily a 20,000 item and yeah you know you can't even if you're a user and you see an item go on sale for that many roo you can't even buy enough roo you if you wanted to spend $20,000 on Roo using credit cards to buy you couldn't do it it's not actually possible and so but what what it says is there's a place where you know Brands see a level of opportunity that is Meaningful if they put items on the mark in the marketplace that have that level of value what they're

basically saying to successful Roblox Creator is you are important to us we want to do something special for you the Creator class and that's not easy to do on other Creator class platforms you actually have to go you know do something very specific and choose the Creator you want to work with on Roblox you can put something out there that only creators can afford that's super cool that raises their profile makes them you know special in the community and whichever Creator grabs it grabs it it's a really interesting way for a brand to connect to this increasingly valuable um set of creators I I think the big question I have around that is what's the value in return to the brands uh you know are they actually getting something out of this and I I think the answer is yes they're getting the Press about it for sure I think that's that's probably the main reason that Adidas did that is because they also launched their original experience at the same time and so it was a big marketing push for them

and I think that was that was really great but I think my my big question is is could another brand come along could Nike come along and do a similar thing and and could they get as much attention around it um I don't know that answer but I I think that's my my question is is is that a one-time thing that Adidas was able to pull off and nobody else will be able to use that strategy again or is that truly something that Brands could do again in the future yeah and I think I question is who are they trying to Market to are they trying to Market to the B2B world and say hey we're on Roblox look how much this is worth it's cool or just to the creators or is it to the users are they trying to Market to all all the players right so and I think to touch on that another thing too is uh for the last you know 15 years on Roblox there's been this very well-known item called called the Dominus it actually if you you can see that purple little thing on my shelf back there there's one right there but a Dominus is an item on Roblox that is worth you know potentially hundreds of thousands of US dollars that Roblox created way back in like 2009 and

you know people are still spending millions of roo you know tens of thousands of dollars purchasing these items um and you know that's that still has value to players they still find players and developers they still find that it's worth it to to buy those because of that that clout right so I think you know in one sense um you know there is a big market for you know creating these high value items because yeah as as you said Matt you know someone looks at your profile and they they see you as that premium that premium user uh they see you as somebody that's you know has higher Prestige um so it just depends on if a brand can kind of replicate that again awesome well I want to keep us I want to keep us moving so um let's start to to look to the future you know uh Roblox has been uh you know investing in ad Solutions over the last year or so they brought on uh they brought an in real real world Commerce allowing people to purchase

real world items in experiences they announc that uh you know that's going to be an integration with Spotify so any Creator can basically link to or Shopify not Spotify uh any Creator can link to Shopify in order to uh sell you know products from their website as long as it's linked to Shopify they're also investing in adte which uh would love for for you know you guys to explain so what what are some of the things that you think are the biggest opportunities for roblock when you look at at all the investment they're doing uh in ads and and what's the opportunity for creators as well I mean I can touch on that to start I think this would be a fun discussion point so um most important is uh Roblox is moving towards being able to present an ad product that is on par with other AD products that LE the same audience elsewhere and frankly that's

their that's the only goal that that matters because if they can't get to parody in terms of targetability measurement attribution then their ad products will always be priced more cheaply than the others that are out there but still maybe not valuable enough to um compel a brand even at that discounted rate and so ultimately that's that's their road map I mean I don't know it specifically but I I got have to believe that their road map and uh takes into account that a programmatic buyer is looking at very specific targeting and specific metrics and specific Roi measurement um outcomes and as soon as Roblox can check the box in all three of those buckets they will have as successful and add product as the ROI

um turns out to deliver so so from that standpoint you know advertising is is I think pretty straightforward the the other piece is well mat can I just double click on that what's so can you you know could you give us an example from both the user experience perspective and the brand perspective of what they need to see like how do you connect what do you envision the the uh the experience of these ad products would be uh within Roblox well I don't know that the user experience will have to change that much because the the presence of a billboard or most importantly and prominently a video can be similar I think even to what it already is on the platform now um and it's really what's happening under the hood and on the back end that an Advertiser cares about and so you know it's everything from some of the things that you know measurable today you know completion rates um and and so so

targeting there are certain types of targeting where you can Target by age you can Target um by uh um gender um genre game genre I think that you'll start to see the opportunity um to Target by uh category um you'll start to see the opportunity to Target by interest level um you'll start to see the opportunity to Target on a state level instead of just a country or Regional level um you'll start to be able to Target based on user engagement levels and so if you're only interested in an ad showing up where the video is likely to be watched all the way through for 30 seconds there will be user types who are typically watching the video longer compared to user types who are typically watching the video for three seconds and they're turning away um and and and all of those areas of targeting

Exist Elsewhere uh in terms of measurement um the the critical measurement is really about attribution and and that's a tough one uh it's a tough one because as soon as you allow a user to click out of the platform all of your policies have to change um around user privacy and safety and and it may take quite some time before that happens and frankly that is exactly why on platform Commerce is so important to robloxs uh which I have other thoughts about that that that maybe will come up but I don't want to keep talking as I'm sure um har and Evan have you know other perspectives here but I think e-commerce inside Roblox has the potential to address a part of attribution U but at the end of the day Roblox needs to be a performance driven ad solution and right now it's it's not um but that's what

they're striving toward and they' made a ton of progress since they first launch most events so for what Roblox ouns what they've been doing on the platform and what I believe that they need to continue to lean into to be successful in the space is rewarded video it's the ads in the ecosystem but the rewarded video rewarded video in particular I mean we see mobile games how successful rewarded video is both like Publishers could thrive in that model advertisers can Thrive and like the the ad networks in between could Thrive there just a thriving model that's been proven out already so Roblox right now they implemented rewarded video this past this past year they're starting to get advertisers on board which is great we're starting to see more Demand on the platform more adill which is which is great but we need more of it um there's a lot of Supply that exists there's a lot of eyeballs there's a lot of players we talked about all the Dow and you know 79.5 million users that are on the platform daily um that kind of you have to slice it up into 13 plus and lot of it is you you know us audiences what's going to be targeted and all that but

still there's a lot of available eyeballs that just there isn't enough filth for so Roblox needs to keep bringing advertisers whether it's through direct reach outs or through plugging into ad networks whatever it is but they need to start bringing more more more advertising dollars through the rewarded video uh through through that Vector um that's that's where the advertising R is going to come from it's not like an image billboard it's through a worded video it's through users actually watching the video and them knowing that they watched it um what M was saying with that type of attribution um you want to go yeah yeah the only the only thing I would I would say there um and and I agree with you by the way it's a fantastic product release um that that is important if you look at the performance reward video off of Roblox Mobile is the you know most prominent place it it performs well however brand recall for a video that is not a reward video is higher and that's because for a

reward video the viewer of that video ad is only paying attention to the reward they get when the video completes they're not paying attention to the video itself and so it it is a uh it a hook that advertisers like but I don't know if it's going to get advertisers the results that they need in order to open up the budgets that make Roblox an equivalent platform to other places where these brands are chasing the same audience yeah yeah um yeah I mean if we're talking about budget unlock from advertisers I think um Performance Marketing just has so many so much access to to dollars compared to you know brand marketing or you know immersive you know experiential experimental marketing or experiential marketing dollars um so yeah I think uh performance performance dollars are you know quite a significant part of the budget I come from PLO where you know Performance Marketing was a big deal of what we did and you know the the amount

of dollars that flowed through you look at you know the financial statements of any public know gaming company or even any company you see how big of a component the marketing marketing is to that so that is a huge unlock I actually feel like this brings up an interesting question and and sorry for interrupting we can come back to it but I just want to want to um uh put a bookmark which is that you know in Mobile advertising a significant portion of that advertising is coming from other games uh that are advertising so when you think about growing the overall P I'm curious do you guys have a perspective on whether Roblox will follow a similar suit or Roblox is more suited to attract more brand dollars than mobile advertising does today so I think there's a reason that's actually uh demographic based but in a way that you know not everybody um always thinks about um and that has to do with the buyers of advertising and if so if you think about um one one statistic the average

incoming age of the CEO of a US company is 54 years old let's say a CMO is five to seven years younger on average that means that CEOs and CMOS are still in Generation X Generation X did not grow up gaming they certainly didn't grow up with multiplayer gaming Millennials started to experience multiplayer gaming when they were teenagers so it became enough of a fabric of the way they spent their time and interacted with peers and and and strangers that um it is it is connected to how Millennial uh Executives think and and I believe that what will happen over the next three to five years as Millennials become the CMOS much less the CEOs is that gaming will naturally become a much more prominent consideration in marketing budgets and advertising mix and the advertising mix that that a that a brand spends and it's just going to be because

that's a comfort zone for the people who are making the decisions typically you buy what you know why is there so still so much advertising on television a it's easy and B it's what today's CEOs and CMOS have been buying for you know 30 years and it's what they grew up watching and engaging with in terms of content um and so I think there is a demographic shift that's coming on the buyer side I also would say that um ads in Roblox are are much closer to marketing messages that you might encounter in the physical world because you're in this 3D space and you're moving around and you're socializing as well as playing and leaning in and and you know behaving in a focused way as Harry was talking about to me that means there is a wider um array of Brands who a user will pay attention to and not just pay attention

to a brand that is marketing another Roblox game I I want to just kind of follow up on that as well is I think Matt touched on that perfectly that yeah exactly all the executives at these you know large companies are not genz themselves right they're they're not they're used to these other mediums and I think even even further on that is that Roblox is not like these other mediums um right now we have image Billboards we have video Billboards we have this rewarded video we've been talking about um I'm jenz you know as as a player on Roblox that have been has been here for what what now 11 years like I think the problem with how a lot of brands are advertising on the platform is that it is still very traditional in how it's it's being done it's it's Billboards it's it's like exactly you would see in the real world but um you know inside of a game that you're playing and I I don't think it

feels incredibly organic to a lot of the players that are actually playing on the platform I think if you talk to a lot of uh a lot of the actual gen z um you know players that are playing Roblox now they would tell you like yeah I don't really care about that billboard that's in a game and something like you know what voldex is doing with the the Integrations of the car brands into into driving Empire is a perfect perfect example of how you should be doing advertising on the platform right so I think Roblox is struggling with that where they're saying hey we want to build up this you know advertising you know dashboard to allow these Brands to to easily advertise to players but I think you know for the most part those ways that Roblox is is doing that right now are the least effective ways right uh the most effective is working directly with games you know to to bring an experience to players that they'll actually remember U some of my my favorite branded experiences on the platform are some of the first ones to be honest uh when I say experiences I

don't mean individual you know original games I mean integration so I remember one of the first ones back in you know probably 2014 or somewhere around there was Jurassic world when that game first came or that movie first came out they integrated into a game called the quy and they redesigned the map all around you know Jurassic world and there were dinosaur bones you had to find and all these different things that felt super organic and that's you know now 10 years later something I still remember but I don't remember that billboard that you that I saw on the platform you know in 2016 right and so that's that's where I think brands are GNA start figuring that out over the next you know hopefully sooner but over the next 10 years is that traditional advertising does not work on Roblox you have to do something that's more immersive something that players care more about and that's what's going to be most effective nice F Evan I just got to mention that word immersive that iess I'm engaging with the content on the platform absolutely that's that's what it's all about it's

more impactful than seeing a billboard or watching NAD it's actually having that brand having your brand inside of the game and having players engaging with it that's that's where that stins in those long-term memory banks like that's where it really registers um like 10 years ago it's amazing the challenge there though is you can't make that programmatic right you got to work in right and I think that's what Roblox is struggling with the most is they are trying to create that tool to you know to be honest get their cut you know of the brands that are coming onto the platform and I think by having the Shopify integration to kind of tie it in you know back to that uh they're trying to do that right I I I don't know what they're planning with that but I would not be shocked if they you know are asking to take a percentage of any sort of sales that are are gotten through that yeah I mean look I think um first of all yes they will definitely be taking a piece of of the transaction

through Shopify but I think that you know that's okay right if if it's working and you know they're the platform they deserve a piece they they created essentially a free way for you as a Creator to have people shopping in your in your space so so I don't know that that's you know I I don't think the motivations to get a cut I me motivations frankly to create more opportunities for creators to make money um and ultimately they're going to want to bring Shopify solution out to Brands but I think that that's a little bit further out um and I don't know that that there's any timeline associated with that you know the the Creator solution for Shopify is I think I I don't know if they gave us a firm date at RDC but I don't I don't know that it's prior to 2025 but but I I'm uh Creator testing it I know but roll out later the going back to um immersive uh engagement on the platform I mean we do uh we do get excited about everything you guys are saying because we agree with it and that is that um engagement

in play based on how the platform really drives user behavior in the first place it's all about play um so engaging through play is is the the only tried andr way to you know create a longl lasting and enduring impression with the player base that's why our uh our popup content modules you know we we see a 14% um higher engagement rate than what's measured outside of Roblox on on platforms like Tik Tok with sort of comparable budgets um and and you know when when we have done engagements and some of these numbers may or may not you know compare to what you guys have achieved in the games that you own but you know we did a a promotion with um Liftopia and uh and Mattel for Barbie and we got 60 million visits to the Barbie Dreamhouse in 30 days um we ran a a popup for war music with BB rexa and we had that popup content experience in

two games for two weeks and we got two million visits to it and and so the and those were visits that you know were in the you know 10 11 plus minutes of of time spent and if you think about Tik Tok every video on a Tik Tok is less than a minute and so you know the the engagement numbers are just they're not comparable you know Roblox has so much to offer you're not going to get that in um in a standard ad unit uh but I still think that there is a place for advertising in the form of IAB Solutions on on Roblox particularly if uh Roblox is able to achieve and I might get this wrong David you can hold me to it but one of the things that was mentioned at RDC which is the goal of having 20% of time spent on Roblox not being about play um over I don't remember if it was five years or 10 years but um you know they are really moving towards uh the idea that this is a place where um the

people on the platform are going to spend time socializing learning shopping you know doing things that they are currently doing um to some degree elsewhere I don't know that they're socializing as much elsewhere in fact I think more real-time communication happens on Roblox probably anywhere other than Discord um but uh if they can achieve that you know there is a place for you know for these ads because they seem to work effectively when that is the primary behavior um in other places yeah I think that makes a lot of sense and I mean there's the ability to track conversion there's the lower entry point I think there's a lot of reasons why you know these these ad units would would make a lot of sense even if they don't have the same impact as like an integration into Avatar catalog Creator or driving Empire or what have you so um I want to wrap up our conversation by talking about RDC uh you know what were some of your your best takeaways but before we do that Evan could since

you're sort of the the OG robloxian uh here could you just give us a sense of like what does what does the Roblox developer conference what does it mean for the Creator base yeah yeah absolutely yeah so I've been going to uh RDC Roblox developer conference since 2017 and it's evolved a lot over the years uh this was a year seven or whatever for me and um especially nowadays is I think it's ultimately the place where you learn about what's going on in the platform uh you you meet a lot of other creators on the platform um you you know share what you've learned and and I think from there um it's it's a great place for whether you're an indie developer or a large studio like super league or Vex to um you know Network and make friends and uh meet Brands and you know work on your next next projects together uh but even beyond that um you know RDC has always been a great place um to connect with Roblox about you know any of the things

going on so this year they had like the the booths at RDC where you could go and talk to different teams from Roblox about you know challenges you're facing uh they even had a brand Booth as well about how you can connect with Brands better and um in in general RDC is just a great place for um you know to to connect with all all different types of people totally nice one um when when I started in the space two years ago my first then my first two weeks it was RDC and Alex he was like yeah come to RDC you'll you'll like get an idea of what this like ecosystem is all about and it really was eye opening it gave me a good sense of the creators the other developers out there the the agencies and the the folks working on Roblox too um it was it was quite eye openening and this is my third year there and um yeah this time around some things that really stood out to me were being able to work were have a lot of my colleagues out

there so about 30 V xers that were out there I think um people spotted the purple bulld shirts from miles and way were like this purple army um I think the Roblox the Roblox team got a little bit scared when they saw us walking by the booths because we were just going and drilling them with questions so um yeah might be a bit of PTSD on on on their side of things but um yeah being being with with all the VX folks was great um meeting with developers meeting with the Roblox teams people that I talk to often it's just good to see them in person um same thing with the brand Partners um and every you talked about sharing knowledge I think that in Roblox like de developers are very open to sharing and like what's been working well for them even though you know they're in competition at the same time it's like a collaboration as well which I find really really cool um even for myself I shared I I I was invited uh during one of the talks on on a panel talk about how to grow your game you see analytics and I shared a bunch of real world world examples exactly what we did you know what we tested and what worked and why it worked and um you know

hopefully creators are able to take some of that away and um uh and implement it um because I think um what just saying that um the rising tide lifts All Ships right so um yes we're all competing against one another but at the same time if want to make the platform better place for users to play and stick around then it's better for everybody so yeah um it was great I thought it was awesome uh wellex wanton an award we're nominated for five we won one so we're happy um and everything is good uh we enjoyed it Harry it was my third year as well and uh it was also my third year of seeing the same voldex shirts marching around my one request is like what try a new try a new t-shirt guys come on so so you know year one we went with black t-shirts and it wasn't as memorable so uh we went with purple uh last year we went with a different purple it was a dark slightly slightly darker purple this year the logo was on the side of the chest out of the middle of the T-shirt all right all right glad to know you guys are mixing it up a little

bit I guess um you know to me there were two highlevel uh observations one um it is very similar to to what both Evan and Harry have said Harry did say the rising tide lifts All Ships I think it's ships in Canada boats in the US but um the uh that was so impressive to me it really was this is a group of um enterprising creative individuals who are unabashed in their ambition and really only limited in what they can accomplish by their imagination and skill and this was a place where they gathered as a community a powerful tight supportive Community for the very purpose of advancing their knowledge and advancing their skill and hopefully each Creator's unique imagination then gets EXP expressed in a way that helps them continue to be successful as enterprising young generally young

people in addition to some of the commercial Studios like voldex and and super league but enterprising young people who are trying to create a career and make a living and you know make this something that they can do every day for as long as they want throughout their life and and it it was that um that sense of community and the fact that look everybody there everybody there who creates content on Roblox competes with everybody else who's there and yet that level of competitive spirit that you would often find in other forums didn't theme like a prominent theme at all it felt collaborative it felt cooperative and that is rare and you got to give both the community but also Roblox a lot of credit for being able to cultivate that um emotion as as the prevailing sort of um uh you know expression of of you know people's enjoyment while they were there and and it kind of leads to

the to the other observation which is Roblox of course was created as a ugc platform so the Creator and developer Community is really the lifeblood of the organization and it's just not easy for a company who relies upon such a a diverse group of creators from all over the world you know with varying ages varying interests multiple languages it's not easy easy for a company to be good at showing that Community how important they are and I think Roblox did a spectacular job of that um they really emphasized the the the how critical developers and creators are to Roblox to their success and how much Roblox is focused on giving creators more of what they need there will always be tension between platforms and creators when it comes to economics can't avoid it there's been tension on YouTube since the very beginning but Roblox really did a very

admirable job in my view of showing the Creator Community how how important they are and how much respect Roblox has for them yeah I couldn't agree more I mean this is my it was my third RDC my first RDC I was also like Harry you know just getting started and didn't know a single person at the at the show and you know found myself just by Happ inance talking to some creators who had you know tens of millions of Da in their games and who were more than happy to share you know I think like it's a unique platform you know kudos to Roblox kudos to all the creators for for also cultivating such an inclusive community um kudos to Evan who's our staple uh Creator on the on the interview um and you've been here for for over 10 years so you've been had a front row seat and and also been a participant that uh over the years so yeah it's been it's been awesome so just to just to wrap up like you know how can

everybody you know follow you guys stay in touch what's the best way for people to reach you for me it's uh it's look me up as Matt Edelman on LinkedIn um I have the unique distinction without specifically um revealing my age although I really don't care I'm one of the first 100,000 people to have ever joined LinkedIn so I got my name clean and so you can find me as Matt Edelman on LinkedIn you're like the Evan zerki of LinkedIn yeah if I if I could have been so lucky Evans far surpassed my level of success by the time uh but from when I was his age by the time he turned 20 exactly awesome how about you Evan uh yeah you can find me on LinkedIn uh Evan zerki uh clean LinkedIn uh LinkedIn link uh also got uh Twitter it's evanz uh and you can check out our company at turning

tables. games well for me my last name is probably too hard to remember it's Harry beanock but uh you could find me on LinkedIn Harry just type in Harry voldex there's actually two Harry's there so I'm I'm one of the two on the one with the long last name that's me awesome guys well thanks so much for being on the podcast this was a great conversation I think a lot of people are going to find it interesting to just you know wrap their heads around all the angles for Brands to to come onto the platform um I'll see you guys around if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a festar review and if you want to reach out or provide feedback shoot us a note at podcast nov. or find us on Twitter and Linkedin plus if you want to learn more about what navic has to offer make sure to check out our website www.n . there you can sign up for the number one games industry newsletter novic digest or contact us to learn about our

wide-ranging Consulting and advisory Services again that is www.nic.edu [Music]