By Zaheer Kachwala
(Reuters) – Roblox has hired former Roku executive Louqman Parampath to help build out its advertising business, as the video-game platform bets on its lucrative young user base to draw marketing dollars.
Parampath will head the product development for advertising and commerce, overseeing teams that help brands reach audiences, Roblox told Reuters exclusively on Tuesday.
The two-decade ad tech veteran joins Roblox as the company seeks to diversify its revenue streams, aiming to stay ahead of competitors and reducing reliance on its in-game currency used by players to purchase digital items.
Roblox started testing video ads in late 2023 and now offers services including digital billboards and search ads. It has been positioning itself as an option for marketers flocking to platforms such as Reddit and TikTok in search for a large audience.
Brand activity, which refers to advertisements and campaigns, has grown 49% since last year, said Roblox partnerships chief Christina Wooton, adding that more than half of Roblox’s 89 million daily active users belong to Gen Z and are the top spending age group on the platform.
“They’re (brands) running video, ads integrations, launching an experience, and driving to their experience through traffic, driving ads and also testing commerce,” Wooton said.
For instance, Warner Bros Discovery partnered with a Roblox developer to promote “Beetlejuice Beetlejuice”, creating a game around the film that allowed ticket purchases. As of September, the game has garnered more than 25 million visits.
The ads have given a revenue boost for developers.
“It opened a whole new revenue stream for developers. Studios like my own, in integrating advertising into our games and using that to increase revenue and monetization,” said Yonatan Raz-Fridman, founder of Roblox development platform Supersocial.
Roblox expects advertising to meaningfully contribute to overall results by 2025 or 2026, it told Reuters last month.
(Reporting by Zaheer Kachwala in Bengaluru; editing by Alan Barona)
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