Roblox announces new ad format, Google partnership to boost advertising business

By Zaheer Kachwala

(Reuters) - Roblox on Tuesday launched a new format of video advertising on its gaming platform and announced a partnership with Google to help boost the growth of its nascent ad business.

Gamers can choose to watch video advertisement, up to 30 seconds long, in exchange for boosts, lifelines or resources in a particular game through rewarded videos.

In the coming weeks, brands and agencies will be able to purchase this new form of marketing either directly or through Google's ad platform, making Roblox's offerings more widely available to a larger set of advertisers.

With Roblox's main videogame platform seeing strong engagement and monetization, the company has been looking to expand its overall business with advertising to take advantage of its large Gen Z user base.

Roblox had 85.3 million Daily Active Users on its platform as of its quarter ended December 31, with the majority these users being above the age of 13.

"Because gamers are so entrenched in the experience itself, traditional ad formats haven't always been the right choice for app publishers, because they don't want to pull their audiences out of those games," Scott Sheffer, vice president of sellside monetization at Google said in a roundtable briefing.

Amid stiff competition in the gaming industry, the advertising business has allowed Roblox to diversify revenue streams and position itself as an attractive option for marketers in search of a large audience.

Reuters reported last year the company hired former Roku executive Louqman Parampath to aid its advertising business.

Roblox has also partnered with data measurement firms such as Cint, DoubleVerify and Nielsen to help brands track the performance of their campaigns.

Over the coming months, other ad formats such as billboards will come to Google Ad Manager, the company said.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore)