Rewarded Video Ads - Incentivized App Monetization
With rewarded video ads, publishers can generate revenue, increase retention, and even drive in-app purchase sales.
Mobile advertising is not a static field — it’s continually evolving to include engaging new formats that seek to drive revenue for publishers and growth for advertisers. One recent example is the rewarded video ad, an evolution of in-app video that incentivizes user engagement by rewarding users for their time, typically in the form of digital in-app currency. In doing so, rewarded video ads maximize revenue while enhancing app performance, including retention rates and even IAP sales. It’s a win-win value exchange that drives immense value for all parties.
In this article, we’ll introduce rewarded video ads and explain how they work. We’ll also review how they can drive campaigns, attract advertisers, and benefit your monetization strategy.
What are rewarded video ads?
Rewarded video ads are full-screen video advertisements that are triggered by users on an opt-in basis. Unlike interstitial video ads, rewarded video ads render only upon request. Developers typically incentivize engagement by offering virtual currency with contextual value within the app itself. The format appears most often in mobile games. More recently, non-gaming app publishers have adopted rewarded video ads as they explore new monetization tactics.
An IAB study found that some of the most common emerging use cases for rewarded ads include:
- Shopping Discounts - e.g., Coupon Unlock
- Music Unlocks - e.g., XX Mins. of Ad-Free Listening
- In-Game Rewards - e.g., Receive a Bonus Life
- Editorial Unlock - e.g., Read XX Articles for Free
- Dating Profile Unlocks - e.g., Access More Matches
- Research Survey - e.g., Fewer Ads
- Social Emoji Reward - e.g., Get a New Emoji Keyboard
- OTT Unlock - e.g., XX Hours of Ad-Free Viewing
- Book Chapter Unlock - e.g., Read XX Chapters for Free
Rewarded video ad placements perform best when the rewards remain relevant throughout the user lifecycle. In the beginning, a rewarded ad placement might offer small amounts of virtual currency, bonuses, or loyalty points. Later in the user lifecycle, supply and demand dynamics often change.
For example, a certain currency may become more relevant to gameplay at an advanced mobile game level. In such cases, publishers may choose to scale reward value up to ensure relevance.
Why use rewarded video ads?
Rewarded video ads are easily one of the highest-performing mobile ad formats, surpassing even traditional video. Because users have a clear incentive to watch ads, they’re typically more receptive to the content.
Once they glean the value of rewarded video, they are likely to return for additional rewards — often multiple times within the same app session. Rewarded video is a win-win for developers, advertisers, and even the users themselves.
The perks of rewarded ads extend well beyond ad revenue. Apps monetized with rewarded video typically see higher short and long-term retention rates from their users. Some studies have found that 30-day retention rates among users who view rewarded ads within their first week of app usage can be as high as 53.2% or 300% more than users who do not.
Studies have also found that users who view rewarded ads are more likely to generate revenue by other means, especially when those ads offer a preview of premium features. In some cases, users who viewed rewarded ads prove 4.5 times more likely to complete an in-app purchase and end up generating a 326% higher lifetime value.
Above all, rewarded video ads allow publishers to monetize 100% of their user base without risking damage to their player community.
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What kind of rewards do
rewarded video ads offer?
Publishers can leverage rewards in a variety of ways, but the offer should reflect the app category.
Here are just a few examples:
Virtual currency (games)
Most free-to-play mobile games include virtual currency that users can spend on cosmetic items or gameplay bonuses. Rewarded video ads can offer a small amount of currency for each impression, encouraging users to view ads each gameplay session to maximize their reward.
Music and video streaming (shopping)
Ecommerce and shopping apps often include coupons and rebates that users redeem before an expiration date. If the app publisher has a direct relationship with an advertiser, they may opt to offer these coupons in exchange for viewing a short rewarded video ad.
Gameplay bonuses (games)
Playables may recreate gameplay from a mobile game, but they don’t need to reflect the whole game. Instead, focus on a specific element that introduces the experience. A tutorial or an early level are two simple yet impactful ways to achieve this.
Music and video streaming (entertainment)
At the end of the day, playables hint at a richer gameplay experience just one app install away. Tease at other features, a puzzle game describes new mechanics in the end card, while story games put forward a plot twist.
How much do rewarded video ads pay for app publishers?
In the U.S., rewarded video ads typically generate between $9.00 and $17.00 for every 1,000 impressions.
Mobile games tend to see the highest earnings from rewarded video ads. However, any app that profits from traditional video ads can reap the benefits of a rewarded ad monetization strategy.
What are some best practices for Rewarded Video Ad monetization?
Using rewarded video ads is one of the most effective monetization strategies in the entire ad
space, but merely adding placements to your app isn’t enough. With the following best practices,
publishers can enhance the impact of rewarded ads while generating revenue:
Highlight engagement opportunities
Users must be aware of rewarded video opportunities if they’re going to take advantage of them. Place your offers in consistently accessible locations that are highlighted by the UI — in-app storefronts, high-traffic menus, and breaks in gameplay cycles are ideal.
Consider using in-game notifications and UI elements to remind users whenever new opportunities are available.
Scale reward values
As users progress deeper into your game or app, their needs and interests are likely to change. Whether that’s getting hooked on the chapters of an exciting new e-book or leveling up their character in a mobile role-playing game, it’s crucial to keep rewards relevant to your users.
Scale the value of rewards throughout the user lifecycle.
Demonstrate the value of IAPs
If your game or app monetizes users through in-app purchases, rewarded ads are an excellent way to demonstrate the value of those IAPs in the eyes of your users.
By offering a taste of your premium app experience, the value of completing an IAP becomes less of an unknown, making it easier for more users to convert.
Optimize rewarded ad placements
As tempting as it might seem, not every app screen is an ideal opportunity to recommend a rewarded video ad. Avoid placements that interrupt core app elements, such as gameplay or mid-content-stream.
Track impression to engagement ratios and analyze which placements garner the most interest from your users. If a particular location isn’t proving valuable to your users, consider removing or relocating it to a point where the value is more apparent.
What are some examples of
rewarded video ad placements?
Start driving more rewarded video ad revenue with Vungle rewarded ads
Rewarded video ads are one of the most powerful monetization opportunities available to modern app publishers. At Vungle, we work directly with advertisers to develop premium video advertising creative that users love. Our advertising partnerships with world-class app publishers like TikTok, Wooga, and Playrix ensure that we’re able to deliver compelling ad experiences that drive revenue for monetization professionals.
Our dedicated team of app monetization experts works directly with our supply partners to find the ideal fit and placement for your category — rewarded or not — ensuring you get the highest possible return on your development investment.
Get in touch with us today to find out more!