Shares of Roblox (RBLX) are up in today’s trading. This is after the gaming platform launched a new video ad format called Rewarded Video while also announcing a major partnership with tech giant Google (GOOGL) to expand its advertising business. The new ads let users opt in to watch up to 30 seconds of video in exchange for in-game perks like boosts or lifelines. Interestingly, early testing saw strong engagement, with over 80% of users finishing the ads, while some groups even hit 90%.
Through its partnership with Google, Roblox will integrate Rewarded Video into Google Ad Manager, making it easier for brands and agencies to buy ads and reach Roblox’s large Gen Z audience. In addition, more ad formats, including in-game billboards, will be added soon. This move will help Roblox diversify its revenue beyond gameplay and keep its users immersed in the platform.
Furthermore, in order to support the growing ad platform, Roblox has partnered with measurement firms like Nielsen, Cint, DoubleVerify (DV), Integral Ad Science (IAS), and Kantar. These collaborations will help advertisers track the effectiveness of their campaigns. Unsurprisingly, with 85.3 million daily active users—mostly over age 13—Roblox sees a lot of potential in immersive advertising.
Which Stock Is the Better Buy?
Turning to Wall Street, analysts think that GOOGL stock has more room to run than RBLX. In fact, GOOGL’s price target of $212.09 per share implies over 36% upside versus RBLX’s 16.6%.
