Rewarded advertising isn’t new; it’s been around for over a decade. However, recent approaches and advancements in transparency have made it popular and essential in designing player retention strategies.
Nowadays, advertisements influence customers’ buying decisions, but we also know that people feel irritated by continuous ads. According to research by HubSpot, 91% of users think that ads are more intrusive now than in the past 3-4 years, and 87% believe they encounter more ads overall.
While the audience is getting tired of constant ads, rewarded advertising has emerged as a beacon of hope. This approach, which respects the audience’s preferences, has become popular among advertisers. Offering something valuable increases the chances that people will interact with your ads. In fact, according to Pocket Gamer, four out of five mobile gamers prefer rewarded video ads over mandatory ads, showing how well this strategy works.
In this blog, we’ll explore Rewarded Advertising and its potential benefits for players, advertisers, and publishers.
What are Rewarded Video Ads?
A rewarded video ad is a type of incentive-based advertising that users can voluntarily watch within an app or game. By doing so, they receive a reward or benefit that enhances their experience within the app or game. These rewards can vary but often include in-app currency, extra lives, power-ups, or other virtual goods.
This unique form of advertising not only respects the user’s choice but also enhances their experience, making it a win-win situation for both the user and the advertiser.
The key aspect of rewarded video ads is that they offer users a choice to engage with the advertisement in exchange for something valuable, making them a more user-friendly and engaging form of advertising than traditional, interruptive ads.
Also Read: Mobile Advertising Types, Benefits, and Best Practices!
How do Rewarded Ads work?
Users can often earn rewards such as coins, extra lives, in-app content, or points in exchange for watching an entire video ad. In this process, the only thing required from the players is their time and maybe attention. We’ll understand how it works with an example.
This is how it works:
- A user interacts with an app/game and needs an extra life to finish the game.
- The user is given the option to watch a 15 to 30-second video ad, and in return, they will be rewarded with a life that he/she can use to finish the game.
- The user opts in to watch the ad and see through to the end to gain a reward.
- The user resumes the gameplay with the reward in their account.
Rewarded Ads Statistics: Why should you use Rewarded Ads?
The competition in the mobile gaming space is increasing daily, and developers need to pay more attention to user retention and engagement. Finding the proper balance between user experience and monetization is vital for an app’s success.
According to Unity’s Ads Study, rewarded ads are proving to be very successful, which shows they work well and have a lot of potential for app developers.
- More than half of users, about 54%, say that the video ads they see are relevant to them. The data shows around 62% of users willingly participate in reward-based ads.
- 71% of the users prefer in-game video ads instead of making in-app purchases or paid apps.
- After implementing video reward ads, 62% of app developers have noticed a big improvement in user retention and increased audience interest. This shows that rewarded ads are suitable not only for monetization but also for building a loyal user base and attracting new users, making them a highly effective strategy for app developers.
- 52% of mobile app developers claim that such ads are the most profitable type of in-app advertising.
- Free incentives, such as extra lives, in-game currency, or exclusive content, allow users to progress in the app for free, making rewarded ads highly successful. Instead of using real money, users can spend their time and attention on these ads to get benefits. With rewarded ads, users can control their experience and choose to engage with them.
Also Read: How Offerwall Ads Enhance User Retention And Monetization In 2024
Benefits of Rewarded Video Ads
Rewarded video ads originally evolved from interstitial video ads, an ad type that typically interrupts a user’s experience. In response, rewarded video ads were developed to offer users a choice. Users who don’t wish to see the ad don’t have to, but users who do are rewarded for their time.
An app achieves its goal by generating revenue, providing an excellent user experience, and engaging users with advertisers. In this sense, Rewarded Ads offer benefits to all involved parties:
For Users
- Rewards for Watching Ads: Players can earn valuable rewards, such as in-game currency, extra lives, or power-ups, simply by watching advertisements. This enables them to progress in the game or access premium features without spending real money.
- Choice and Control: Rewarded ads give players the freedom to choose whether or not to engage with an ad. They are not obligated to watch ads but can choose to do so to receive rewards, giving them control over their experience.
- Improved Gaming Experience: Rewarded ads enhance the overall gaming experience by providing rewards that directly benefit gameplay. Players can progress faster, unlock new levels, or customize their avatars, increasing enjoyment and satisfaction.
- No Interruptions: Unlike traditional ads interrupting gameplay or content consumption, rewarded ads seamlessly integrate into the user experience. Players voluntarily watch ads during natural breaks or in exchange for rewards, minimizing disruption.
- Free Access to Premium Content: Rewarded ads frequently offer players access to premium content or features that would otherwise require payment. This allows players to enjoy additional content without spending money, making apps and games more accessible to a broader audience.
For Publishers and Advertisers
- Increased Revenue: Rewarded ads can significantly boost revenue for publishers. Since users opt-in to watch these ads in exchange for rewards, they tend to have higher engagement rates than other ad formats. This increased engagement translates to higher ad views and revenue for publishers. Rewarded ads drive higher return on ad spend (ROAS), conversion rates, and a more positive brand experience than other ad formats.
- Extended User Sessions: Reward ads that enhance the user experience can encourage users to spend more time within the app or game. Publishers can significantly boost user engagement and satisfaction by offering a win-win solution.
- Improved User Retention: Rewarded ads can help improve user retention by rewarding users to return to the app or game regularly. The continuous engagement potential, where users can earn rewards through ad engagement, creates a positive feedback loop. This ensures a steady user base, a key factor for publishers’ success.
- Higher completion rates for ad views and better targeting: Users will only receive rewards if they watch the entire ad. This makes them pay attention to the ad instead of ignoring or skipping it. Additionally, this method allows for better audience targeting since users are more likely to watch ads that interest them.
Also Read: What is eCPM and how can it be increased for high revenue?
How do rewarded video ads effectively boost app or game downloads?
Rewarded video ads drive more downloads by rewarding user engagement with rewards like in-game currency or extra lives. These ads provide extended exposure to the app or game features, leading to increased interest and conversions. Positive user experiences and non-intrusive ad formats encourage users to explore the advertised product further and may result in word-of-mouth recommendations.
Targeted advertising ensures the right audience is reached, driving higher conversion rates. Overall, rewarded video ads create a win-win situation, benefiting advertisers and users while driving more downloads for the advertised app or game.
Best Practices for Rewarded Ads
The most effective rewarded video ads fit seamlessly within the user flow of an app – that is, between levels or when the user needs rewards most. Ads should never appear in a way that is disruptive to a user’s in-app experience.
Strategize Ad Positioning: How you integrate Rewarded Ads can greatly influence the user experience, positively or negatively. To ensure a positive impact:
- Place Rewarded Ads in high-traffic areas within your app.
- Use pop-up prompts to prompt users to discover ads more effectively.
- Position ads between levels, allowing users to continue their progress seamlessly.
- Encourage in-app purchases by offering users the option to double their purchase if they engage with the ad.
Offer Valuable Rewards: To encourage users to engage with ads provide rewards that they genuinely want, such as in-game currency, power-ups, or exclusive content. Also, ensure that the effort required to watch an ad matches the value of the reward offered, maintaining a fair and balanced user experience.
Keep it Optional and Be Transparent: Allow users to choose whether or not to engage with rewarded ads, respecting their freedom and enhancing their overall experience. Also, build trust with your audience by transparently communicating the rewards users will receive for watching ads upfront.
Optimize, Test and Iterate Ad Placements: Experiment with different ad formats, reward types, and placements to identify what works best for your audience, and continually refine your approach based on performance data. Also, integrate rewarded ads seamlessly into natural breaks or points of interest within your app or game to maximize user engagement.
Also Read: How can Programmatic Media Buying Influence the Growth of Mobile Gaming?
Conclusion: Rewarded Video Ads Future (For 2024)
In conclusion, rewarded advertising represents a dynamic and user-friendly approach to app monetization and user engagement, which is believed to continue its impact in 2024 and beyond. Rewarded ads create a positive experience for users and advertisers by offering valuable rewards and respecting user autonomy. They drive revenue for publishers and enhance user retention and satisfaction, making them a vital component of app development strategies.
Furthermore, by optimizing ad placement and continuously testing and iterating on ad formats, developers can maximize the effectiveness of rewarded ads and create a win-win situation for all parties involved. With their ability to drive downloads, boost revenue, and foster user loyalty, rewarded ads continue to be a powerful tool for app developers looking to succeed in today’s competitive mobile landscape.
FAQs
Q: How long are rewarded ads?
A: Rewarded ads are generally 15 to 30 seconds long.
Q: Are rewarded ads skippable?
A: At any point during the experience, the user can skip or stop viewing the ad, but they’ll get the reward only after watching the entire video ad.
Q: What other name are reward ads also known by?
A: Rewarded ads are also called sponsored or incentivised ads.
Q: How much do you earn from rewarded ads?
A: Generally, you can earn between $0.50 and $1.00 for every 1000 rewarded ad views. However, it also depends on many factors, such as the type and location of the ad.
