How the Digital Ad Industry Is Grappling With Ad Views in the Metaverse

When Roblox's product team first set out to build an ad placement system on the gaming platform, it faced questions that could end up setting precedents for a nascent form of digital advertising: What qualifies as an impression when a billboard is viewed solely by 3D avatars? Would basic targeting practices spoil the collective sense of a shared space at the heart of the metaverse concept? Roblox is still in the process of settling on answers as it moves into a trial phase for a self-serve ad platform that it's hoping to launch early next year. But the company isn't the only metaverse platform that will have to grapple with these issues; Facebook parent Meta is also in the midst of testing monetization options for its Horizon Worlds platform, and Microsoft and Sony are also reportedly in the process of adding more in-game advertising. While in-universe ad placement options for other major metaverse platforms are still mostly handled by a cottage industry of smaller ad-hoc companies, more scaled automated ad systems are likely in the cards if the emerging industry is to reach the $5 trillion in market value McKinsey has predicted for it by 2030. "There are all these really interesting problems that we have to solve on behalf of our advertisers, because it's a totally different canvas that your ads are showing up in and there's a there's a little bit of unpredictability," said Richard Sim, senior product director for monetization at Roblox. "But we're trying to put in the controls and the reporting so that advertisers feel very safe and comfortable advertising in the metaverse." Until around a month ago, the digital ad industry's biggest trade group had little up-to-date guidance on these questions. But the Interactive Advertising Bureau (IAB) recently finalized new guidelines on measuring in-game advertising for the first time since the category was introduced in 2009. The effort will serve as a foundation as the industry seeks to tackle best practices and standards for metaverse worlds. "The intention with the updates that we just released was to bring gaming on par with the rest of digital media," said Zoe Soon, vp of the IAB's Experience Center. "And if you think about the metaverse, gaming has been the primary entryway into metaverse environments right now...And gaming has had to solve a lot of the problems that that metaverse is coming up against, like latency and how how to include multiple users and different perspectives." Ads vs. experiences As hype around the concept of the metaverse has exploded in recent months, brands have flocked to build replicas of their stores, products and other virtual brand activations in these spaces. But these experiences are mostly experimental, and their ultimate purpose in terms of commerce revenue or brand awareness isn't always clear. In-game ads differ from these branded experiences in that they are smaller bits of product placement placed among another non-branded world. In Roblox, brands will soon be able to buy portals that will whisk users into a branded experience they've built or a simple billboard-like image embedded into the landscape of an already-popular world. An avatar views a portal ad for Vans in a Roblox game. As brands determine clearer goals for what they want out of metaverse spaces, these ads could help boost discoverability of branded experiences or ecommerce stores, which would in turn effectively serve the same sort of purpose as a website landing page or social profile. "Right now, success [in the metaverse] could be anything like from, you just want a cool article written about you. Or, if you want to reach Gen Z, you want your brand to be perceived as cool," Soon said. "Or maybe you want to count the number of users who have seen or interacted with your metaverse experience. Or the number of people that have coined an NFT with you...I think there's a bunch of different metrics that are going to become standardized in terms of how you measure a metaverse activation. But I think I think the necessary first step is like defining, 'Okay, what is success? Like, what are we trying to do?'" As for Roblox, the company said it is looking to these kinds of industry standards to define views as it finalizes its own metrics in the coming months. Sim said when he joined the company, there had been some discussion of banner ads in the navigation menu and other more standard units. But the team quickly decided they would rather focus on making ads feel native and seamlessly interwoven into the metaverse experience, wary of driving away advertising-averse users. "We're sort of taking cues from the industry. So on the basic idea of what is a viewable ad impression, there have been some standards that have been set by the industry," Sim said. "We've taken a very careful approach. And we recognize that we have this opportunity to reset expectations and to reset standards for what people should expect in the metaverse." The Rise of Virtual Influencers and Their Role in the Metaverse