Key Takeaways
• Metaverse companies are experimenting with in-game advertising. These advertisements have attributes and qualities like the standard web.
• Whole experiences can be made as ads in the metaverse. Essentially these are worlds themed around an advertising campaign.
• Virtual goods themed around certain products can be bought and sold as collectibles.
• Skepticism from advertising is likely waning as big products experiment with metaverse advertising.
An Overview of Metaverse Marketing
The internet is changing. Two decades ago, users were inside World of Warcraft. This metaverse was a fascinating video game niche that broke into the mainstream as a popular subculture.
Fast forward from the early 2000s and to the 2020s, and the Metaverse is becoming ubiquitous within our culture right beneath your eyes. Are you letting your kids play on the iPad? Maybe they were talking about a game called Minecraft or Roblox, and you shrugged and thought nothing about it… well…
Those games are the metaverse. That is where your kids interact socially on the internet. It’s also where the money is still quietly funneling into after the early metaverse hype a few years ago.
We are at a similar crossroads that Google was at in the early 2000s. There are millions and millions of metaverse experiences. There are more than 8,000 experiences on Roblox that crossed over a million unique user sessions.
There are over 5.5 million active experiences as of 2024. And getting back to the younger generation, 60% of Roblox users are under the age of 16
The bottom line is that metaverses have a large set of eyes on them, and metaverses are starting to capitalize on the attention with advertising systems for developers to implement.
Types of Advertising in the Metaverse
Metaverse platform developers are experimenting with new methods of advertising in the metaverse. But some advertisements take from advertising methods we already see.
Native advertising takes the idea of a billboard and mixes it with traditional website advertising, to truly create something unique.
Native Advertising in the Metaverse
Native advertising is where brands can create immersive experiences that blend in with the environment. Roblox is starting to standardize these native advertisements for developers.
A virtual billboard in Roblox. Ad showing aspect ratio for developer.
A virtual billboard in Roblox showing an example ad.
Immersive Experiences
Back in the early 90s, Nintendo had games created around certain products. McDonalds had M.C . Kids, an interesting platformer for the NES.
M.C. Kids for the Nintendo
Jump into the 2020s, and brands have taken this concept to another level. Now, whole immersive worlds are built around brands.
For example, the Chipotle Burrito Builder Experience in Roblox allowed thousands of people play a restaurant simulation game together.
Wendy’s created a “food fight” mode in the metaverse, Fortnite. Wendy’s joined team pizza to destroy burger freezers in the Fortnite mode. This reinforced the companies brand message “Wendy’s beef is fresh, never frozen.”
McCain Foods created a Roblox experience around regenerative farming methods. Besides raising awareness of their brand, the simulation helped to educate the audience about issues around farming.
Finally, Gucci created a permanent experience in Roblox called Gucci town. User’s can buy virtual Gucci gear in the town and see the company’s history.
This experience worked so well, that kids will call nice things or good things “Gucci”. Gucci was able to capitalize on this cultural phenomenon with kids through this Roblox experience.
Metaverse Ad Revenue
We gave those metaverse examples to help you understand the explosive growth potential metaverse’s may see in ad revenue. Roblox already earned $749.9 million in Q4 2023 from their digital currency Robux which is used for in game purchases.
The ad platform was still in its infancy in 2023, but Roblox has rolled out detailed procedures for developers. We can estimate Roblox’s ad revenue potential if we use Google advertising as a baseline metric for our model estimates.
Back in Google’s infancy, Google made about $1.07 per user per year. This is a very rough estimate to start modeling Roblox’s ad revenue potential, but let’s start there. In Q4 2023, average daily active users was 71.5 million.
If Roblox could achieve just a small amount of the success that Google achieved in search ads, and if we assume 71.5 million is the worst-case scenario of active users for the whole year of 2024, then Roblox would earn about $75 million in 2024 in ad revenue! The daily active users grow about 20% to 25% a quarter.
Taking this growth into consideration and taking into account increased ad revenue per user as the ad platform develops and improves, and suddenly Roblox could be making north of $400 million in 2025! This growth would immediately make Roblox a profitable company, accelerating their growth potential.
Roblox looks to be the closest to monetizing advertising revenue on a metaverse platform. Their ability to monetize gaming views could revolutionize how Roblox makes money.
Metaverse advertising worldwide is estimated to reach $1.8 billion in 2024 per statista. The reports also estimate a CAGR of 26.86% through 2030. Based on our estimates with Roblox, this likely is the low end of the worldwide advertising estimate.
Challenges in the Metaverse Advertising Space
Many of the challenges faced by advertisers early in the web’s development are reoccurring in the metaverse. Intrusive and poorly designed ads will likely be the main roadblock Roblox must fight against as it builds its new ad platform. Roblox already faces the pressure of poorly designed Robux purchases. Some of these issues include intrusive pop-ups, bugged experiences, and overly priced virtual goods.
An example of a metaverse ad, source: adage.com.
Roblox ad policies from 2023 explicitly states a ban on advertising to users under the age of 13.
Metaverse’s will face the challenge of poor or inappropriate ads as they build out their platforms; however, what’s different in the 2020s versus Google’s work in the early 2000s is the advent of AI technologies.
Finding inappropriate content is significantly easier thanks to image checking tools like Google’s Cloud Vision API.
One issue that Roblox has likely overcome is skepticism from advertisers. Thanks to ad campaigns from Gucci, Vans, and even the NFL, advertisers have been shown that large companies are already taking a chance on the metaverse.
Final Thoughts
Investors should follow the money, and money is pouring into the metaverse. Microsoft and Roblox look to be the big players in the metaverse, as their platforms continue to attract millions of users to Minecraft and Roblox experiences.
It looks like 2024 will be a proving ground for advertising in the metaverse, with Roblox leading the charge. If Roblox can prove that advertising will work in the metaverse, Roblox will unlock a huge revenue stream that could potentially overtake its current revenue stream of Robux.
There are still big risks ahead for metaverse advertising. If Roblox cannot control the quality, appropriateness, and relevance of ads shown to its users, this experiment could be setback for years to come.
But ultimately, the estimates that metaverse advertising could top over $1 billion in 2024 looks very real based on the growth the metaverse is having in terms of users, activity, and engagement.
Image Source create.roblox.com
Key Takeaways
• Metaverse companies are experimenting with in-game advertising. These advertisements have attributes and qualities like the standard web.
• Whole experiences can be made as ads in the metaverse. Essentially these are worlds themed around an advertising campaign.
• Virtual goods themed around certain products can be bought and sold as collectibles.
• Skepticism from advertising is likely waning as big products experiment with metaverse advertising.
An Overview of Metaverse Marketing
The internet is changing. Two decades ago, users were inside World of Warcraft. This metaverse was a fascinating video game niche that broke into the mainstream as a popular subculture.
Fast forward from the early 2000s and to the 2020s, and the Metaverse is becoming ubiquitous within our culture right beneath your eyes. Are you letting your kids play on the iPad? Maybe they were talking about a game called Minecraft or Roblox, and you shrugged and thought nothing about it… well…
We are at a similar crossroads that Google was at in the early 2000s. There are millions and millions of metaverse experiences. There are more than 8,000 experiences on Roblox that crossed over a million unique user sessions.
There are over 5.5 million active experiences as of 2024. And getting back to the younger generation, 60% of Roblox users are under the age of 16 The bottom line is that metaverses have a large set of eyes on them, and metaverses are starting to capitalize on the attention with advertising systems for developers to implement.
Types of Advertising in the Metaverse
Metaverse platform developers are experimenting with new methods of advertising in the metaverse. But some advertisements take from advertising methods we already see. Native advertising takes the idea of a billboard and mixes it with traditional website advertising, to truly create something unique.
Native Advertising in the Metaverse
Native advertising is where brands can create immersive experiences that blend in with the environment. Roblox is starting to standardize these native advertisements for developers.
A virtual billboard in Roblox. Ad showing aspect ratio for developer.
A virtual billboard in Roblox showing an example ad.
Immersive Experiences
Back in the early 90s, Nintendo had games created around certain products. McDonalds had M.C . Kids, an interesting platformer for the NES.
M.C. Kids for the Nintendo
Jump into the 2020s, and brands have taken this concept to another level. Now, whole immersive worlds are built around brands.
For example, the Chipotle Burrito Builder Experience in Roblox allowed thousands of people play a restaurant simulation game together.
Wendy’s created a “food fight” mode in the metaverse, Fortnite. Wendy’s joined team pizza to destroy burger freezers in the Fortnite mode. This reinforced the companies brand message “Wendy’s beef is fresh, never frozen.” McCain Foods created a Roblox experience around regenerative farming methods. Besides raising awareness of their brand, the simulation helped to educate the audience about issues around farming.
Finally, Gucci created a permanent experience in Roblox called Gucci town. User’s can buy virtual Gucci gear in the town and see the company’s history.
This experience worked so well, that kids will call nice things or good things “Gucci”. Gucci was able to capitalize on this cultural phenomenon with kids through this Roblox experience.
Metaverse Ad Revenue
We gave those metaverse examples to help you understand the explosive growth potential metaverse’s may see in ad revenue. Roblox already earned $749.9 million in Q4 2023 from their digital currency Robux which is used for in game purchases.
The ad platform was still in its infancy in 2023, but Roblox has rolled out detailed procedures for developers. We can estimate Roblox’s ad revenue potential if we use Google advertising as a baseline metric for our model estimates.
Back in Google’s infancy, Google made about $1.07 per user per year. This is a very rough estimate to start modeling Roblox’s ad revenue potential, but let’s start there. In Q4 2023, average daily active users was 71.5 million.
If Roblox could achieve just a small amount of the success that Google achieved in search ads, and if we assume 71.5 million is the worst-case scenario of active users for the whole year of 2024, then Roblox would earn about $75 million in 2024 in ad revenue! The daily active users grow about 20% to 25% a quarter.
Taking this growth into consideration and taking into account increased ad revenue per user as the ad platform develops and improves, and suddenly Roblox could be making north of $400 million in 2025! This growth would immediately make Roblox a profitable company, accelerating their growth potential.
Roblox looks to be the closest to monetizing advertising revenue on a metaverse platform. Their ability to monetize gaming views could revolutionize how Roblox makes money.
Metaverse advertising worldwide is estimated to reach $1.8 billion in 2024 per statista. The reports also estimate a CAGR of 26.86% through 2030. Based on our estimates with Roblox, this likely is the low end of the worldwide advertising estimate.
Challenges in the Metaverse Advertising Space
Many of the challenges faced by advertisers early in the web’s development are reoccurring in the metaverse. Intrusive and poorly designed ads will likely be the main roadblock Roblox must fight against as it builds its new ad platform. Roblox already faces the pressure of poorly designed Robux purchases. Some of these issues include intrusive pop-ups, bugged experiences, and overly priced virtual goods.
An example of a metaverse ad, source: adage.com.
Roblox ad policies from 2023 explicitly states a ban on advertising to users under the age of 13. Metaverse’s will face the challenge of poor or inappropriate ads as they build out their platforms; however, what’s different in the 2020s versus Google’s work in the early 2000s is the advent of AI technologies.
Finding inappropriate content is significantly easier thanks to image checking tools like Google’s Cloud Vision API.
One issue that Roblox has likely overcome is skepticism from advertisers. Thanks to ad campaigns from Gucci, Vans, and even the NFL, advertisers have been shown that large companies are already taking a chance on the metaverse.
Final Thoughts
Investors should follow the money, and money is pouring into the metaverse. Microsoft and Roblox look to be the big players in the metaverse, as their platforms continue to attract millions of users to Minecraft and Roblox experiences.
It looks like 2024 will be a proving ground for advertising in the metaverse, with Roblox leading the charge. If Roblox can prove that advertising will work in the metaverse, Roblox will unlock a huge revenue stream that could potentially overtake its current revenue stream of Robux.
There are still big risks ahead for metaverse advertising. If Roblox cannot control the quality, appropriateness, and relevance of ads shown to its users, this experiment could be setback for years to come.
But ultimately, the estimates that metaverse advertising could top over $1 billion in 2024 looks very real based on the growth the metaverse is having in terms of users, activity, and engagement.