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Alex Ossola: Welcome to Tech News Briefing. It’s Thursday, April 11th. I’m Alex Ossola for the Wall Street Journal. Coming up on today’s show, from concerts to games, there’s a lot for users to see and experience on the online entertainment platform Roblox. But soon, those experiences could feature video advertising. WSJ reporter Sarah Needleman tells us what the company has in store. And then, online actors linked to the Chinese government are targeting US voters with disinformation, and they’ve got some new tools up their sleeves, artificial intelligence. We’ll hear more about the operations and their potential impact from WSJ reporter Dustin Volz.
But first, on Roblox, people can see concerts, play games, and create their own digital worlds. The free platform has been around since 2006, and its millions of users tend to be on the younger side. The company went public in 2021 and makes money through sales of its in-game currency called Robux. Now, though, it’s looking to boost its margins by adding new video advertising to the platform. For more on what that will actually look like, I’m joined now by WSJ reporter Sarah Needleman. Sarah, why is Roblox making this push into video advertising now?

Sarah Needleman: A lot of online platforms are turning to advertising to generate revenue, especially the ones that are free. It’s a simple way to generate revenue without having to raise prices for consumers or start charging for a platform that used to be free. So this is an alternative that many are gravitating toward. Roblox’s stock has gone down since its IPO. And since the fading of the pandemic, the company has been working to keep up that momentum it had gotten during that period, investing in experiences that appeal to older users to expand its user base, investing in safety and training. So all those things are expensive and eating into their margins. And the company is not profitable. So advertising is a potential way for Roblox to get into the black.

Alex Ossola: Okay. So let’s talk about what the ads will actually look like on the platform since it is this kind of digital world.

Sarah Needleman: The ads on Roblox are not quite as you might see elsewhere. The way they work is that a user will be roaming the platform in the form of their avatar. And as they’re walking around a virtual city or landscape of any kind, they might bump into a virtual billboard. And on that billboard, they may see a video ad that shows almost like a television commercial. It’s not in the same aesthetic, the cartoony aesthetic of the platform itself. It’ll be a moving ad possibly with real humans.

Alex Ossola: Roblox hired a company called PubMatic. How do they fit into Roblox’s strategy?

Sarah Needleman: PubMatic is an ad technology firm. And so they’re going to help make it easier for brands to advertise on the platform using an online auction system that’s pretty traditional in the ad world. They’re making a version of that specifically for Roblox that’ll help automate the process.

Alex Ossola: Did ads already exist on the platform?

Sarah Needleman: There is, in some ways, advertising on Roblox already, but in a non-traditional way. The company has been encouraging brands to build their own realms, just like other users. There’s NIKELAND, for example. Brands can also create and sell their own virtual goods on the platform, or they can create an experience within the existing realm. So, those are the main ways that companies can advertise on the platform. And they’re actually not paying Roblox to do that. However, they can pay to promote their own content on the platform.
There are some static virtual billboard ads already, but there are very few of them and they promote existing Roblox content. What we’re going to see now are video ads that promote just about anything: cereal, fashion, upcoming movies, all sorts of things. It’s to be seen as to which advertisers will take up the opportunity. But it’s potentially a lot less expensive for a brand to purchase a billboard ad as opposed to creating their own realm on Roblox or even creating virtual goods or a special event, because in those cases, you got to go to a third party, some sort of developer, unless they happen to have the chops in-house. But most brands don’t, so they’re going to pay a developer to create this stuff for them.

Alex Ossola: Are there specific challenges in running ads on a platform with so many users who are children?

Sarah Needleman: Roblox has decided to only show ads to users ages 13 and older. It uses technology to block out the ads for users who are younger. They’ve said that they’re taking their approach to advertising very slowly and cautiously. One reason why brands are very attracted to Roblox in particular, or video games in general, is that younger folks tend to be the biggest consumers of interactive entertainment. And if brands can build a sense of loyalty with consumers when they’re young, that can last throughout their lifetimes.

Alex Ossola: That was our reporter Sarah Needleman. Coming up, why are Chinese-linked disinformation campaigns targeting US voters? That’s after the break.
There is a lot of disinformation online, and the advent of artificial intelligence tools could make this disinformation even more convincing. Now, campaigns linked to the Chinese government are embracing these new tools to influence voters in the US, Taiwan, and elsewhere, according to new research from Microsoft. WSJ reporter Dustin Volz joins me now with more on these campaigns. Dustin, why are these online influence campaigns of interest to the Chinese government?

Dustin Volz: Well, that’s a million-dollar question. It’s always hard to know the motives of why a foreign actor like China or Russia or Iran might be targeting voters in the United States or around the world with disinformation. But typically, if history is any indication, it’s to advance their geopolitical interests. In the Russian context, we’ve seen a lot of disinformation, fake accounts trying to undermine the Ukraine war efforts to repel Russia from the invasion. And in China, it’s no surprise that some of the content seems to be undermining the case for Taiwan remaining an independent nation. There’s sort of a general trendline here of wanting to advance geopolitical and geostrategic interests, and that appears to be the same here as well. It’s also worth noting that China and the US are not the best of friends these days, are competing economically. And potentially, if a conflict were to arise in Taiwan militarily, a lot of the disinformation we’ve seen targeting US audiences that is linked to China over the last several months or so has really been just trying to stoke divisions.

Alex Ossola: Why are these Chinese-linked campaigns targeting US voters?

Dustin Volz: It’s hard to really say what specifically China wants to occur in the US context. We do know from past US intelligence reports that China did target the 2022 midterms, and there were a couple specific congressional candidates that China targeted who were vocal on China issues. But broadly here, what we’re seeing is sort of testing the waters, so to speak. One of the really interesting things about the new research from Microsoft that came out is that we saw examples of these fake accounts on X and elsewhere trying to basically poll American voters on what they found to be politically divisive, almost like they’re gathering intelligence or doing a reconnaissance ahead of the 2024 election to learn which issues they might be able to stoke and might be particularly explosive things that voters don’t like to agree on, such as abortion or immigration, those sorts of things.
In other cases, we’ve seen them just really seemingly experimenting with artificial-intelligence generation to spread conspiracies, such as the devastating wildfires in Maui last year. There were cases where Chinese actors were basically trying to propagate false conspiracies that the US government was actually responsible for those wildfires and that they had basically detonated a secret weapon, and that’s what caused it. In that case, that doesn’t appear to be supporting any specific political viewpoint. That’s just trying to sow distrust and chaos within the US.

Alex Ossola: You mentioned that US intelligence reports show that China targeted the midterm elections in 2022. What’s different now?

Dustin Volz: Where you can most see the difference is actually in the Taiwan case. Because Taiwan, they had presidential elections in January, and that’s where we’ve really seen so far the most sophisticated use of artificial intelligence and AI generative technology being used to create fake news anchors to try to deliver fake news reports to Taiwanese audiences. In another case, they appear to have used a AI-powered deepfake audio clip of a former presidential candidate in Taiwan who had dropped out. In the fake clip, the former candidate was saying that they had endorsed a candidate who was more or less more sympathetic to the Chinese perspective on Taiwan. That sort of showed a real effort of using some more advanced tools, not just using AI to generate text or images but this deeper level of sophisticated imagery and video and audio that was used to target Taiwanese audiences with, I would say, specific goals in mind.

Alex Ossola: What has Beijing said about this?

Dustin Volz: China, of course, denies engaging in disinformation targeting foreign audiences, and essentially says that the US and other Western countries are the largest purveyors of disinformation on the internet.

Alex Ossola: For people who are spending time online before the election, what should they know about disinformation? What should they keep in mind?

Dustin Volz: What’s really interesting is, in this Taiwanese presidential election in January, the Chinese efforts to promote disinformation were broadly very unsuccessful. And speaking to people in Taiwan and people at Microsoft who study these things and elsewhere, Taiwan has a great level of societal resilience to this kind of thing. In the US, there’s a great deal of concerns that because we are so politically divided and because there’s a great deal of distrust in government, in media, in social media platforms as they exist today, there’s a real worry among disinformation researchers and US officials I’ve spoken to that that just makes us extremely susceptible to these kinds of activities. And that is something that you have to keep in mind when you’re navigating the internet, that it’s hard to know where information is coming from, and it’s hard to know who’s behind a particular social media account. And so, a lesson for all of us is just to be careful online and seek out a diverse array of trusted sources and make sure you’re checking everything you hear with a second or third source.

Alex Ossola: That was reporter Dustin Volz. And that’s it for Tech News Briefing. Today’s show was produced by Julie Chang, with supervising producer Katherine Milsop. I’m Alex Ossola for the Wall Street Journal. We’ll be back this afternoon with TNB Tech Minute. Thanks for listening.