Whether you’re a developer looking to launch a mobile app or a publisher planning to get into the OTT market, you have one big challenge ahead of you — choosing the best video ad format to monetize with. Although there are many options on the market, one unique ad format has been gaining popularity recently — rewarded video ads.
This innovative format is particularly popular in the mobile gaming space and has become an essential part of many publishers’ growth strategies.
Rewarded video ads are popular with both publishers and advertisers, and there’s a good reason for that. Let’s dive into the world of rewarded video ads and help you determine if they’re the right monetization choice for your app.
What Are Rewarded Video Ads
Rewarded video ads are a non-intrusive mobile video advertising format that allows users to earn a reward by watching a video ad. Because users willingly choose to watch these ads, this ad format offers some of the highest user engagement on the market.
Rewarded video ads are most commonly used in mobile game monetization and usually offer in-game rewards for watching them. These ads typically last 15–30 seconds, and users cannot skip them. The types of rewards players may get vary from game to game, but they are usually something like additional lives, daily rewards, in-game currency, or similar.
Here are a few rewarded video ad statistics to illustrate how effective these ads can be:
- Around 68% of mobile gamers said they liked this ad format.
- Users who watch rewarded video ads are six times more likely to complete an in-app transaction.
- Around 79% of mobile developers said that rewarded video ads were their best-performing ad format.
As you can see, rewarded video ads are undoubtedly one of the most effective mobile ad formats. You could argue that they can even surpass traditional video ads in specific scenarios.
· Premium Google ADX Demand
· Omnichannel Monetization
· Rich Selection of Video Ad Formats
· Real-Time Performance Tracking
· Automated Reporting
Different Ways to Use Rewarded Video Ads
Rewarded video ads are indeed powerful, but there are many things to keep in mind when integrating them.
- Your ads must be easily accessible and need to stand out in the app’s main menu.
- They must have an appealing reward behind them.
- You need to ensure the benefits of watching them are apparent.
Besides the above, publishers must consider ad placements above everything else. Depending on where and how often you place your ads, your potential revenue can change drastically.
Here are a few commonly used rewarded ad placements you can use and why they’re effective.
1. When Players Run Out of Lives
One of the most common and effective rewarded video ad placements is after players lose all their lives. Giving them an opportunity to watch an ad to get another chance without losing all their progress is an incredibly effective motivator.
This placement is particularly appealing to non-paying players. However, if your goal is to drive as many in-app purchases, it’s best to use another ad placement and sell lives instead (or at least introduce a limit on how many times players can use this).
2. Time Boosters
Most mobile games are infamous for having massive time sinks, which makes this placement so effective. By giving players the option to watch a video ad to speed up various cooldowns or building times, publishers can entice them to come back more often. The more players are engaged with the game, the more ads or purchases they’ll complete.
3. For Claiming Daily Rewards
Many mobile games lately have introduced daily rewards to incentivize players to log in regularly. If this system sounds like something you’d want to implement, you could lock those rewards behind a rewarded video ad. That means all players who log into your app will watch at least one of your ads daily.
4. Gated Hints
Another effective way of using rewarded video ads is to gate in-game hints. This method is particularly effective in puzzle, word, or trivia games.
If players get stuck, you can allow them to watch a video ad to get a hint or a tip on how to solve the current puzzle. The users enjoy this placement the most since it doesn’t lock any in-game content behind ads, which results in higher retention rates.
5. For Earning Multipliers After Finishing a Game
Another effective ad placement is to let users watch a video ad after finishing a level to multiply their earnings. Many apps use this method because of its widespread appeal. After all, who doesn’t like free stuff?
Although this ad placement offers an incredible incentive, it has a few downsides. One of them is that users may miss it if they immediately leave the end-of-the-level screen. The other is that this ad placement works best with players new to the game. High-end players are unlikely to need the extra rewards and may stop watching these ads altogether.
6. Discounts for In-App Purchases
Combining multiple revenue sources is the best approach to monetization. That is why publishers can use this rewarded ad placement to facilitate in-app purchases while earning some extra ad revenue.
The premise of this placement is simple — allow users to watch a video ad every time they make an in-app purchase for a small discount. This placement gives users the feeling they’re getting additional value from every purchase and is an excellent way to get them used to in-game transactions.
Rewarded Video Ads vs. Interstitial Ads
By now, it should be clear how versatile rewarded video ads are, but how do they compare with their most competitive alternative — interstitial ads?
There really isn’t any competition in that regard. Rewarded video ads are by far the most-used mobile ad format. As many as 82% of mobile apps use them, which beats out the second-most-used interstitial ads by a whopping 25 percentage points.
The primary reason rewarded video ads are more popular than interstitial ads is that they offer a better user experience and user engagement. Players have no direct benefits from viewing interstitial ads, and many find them intrusive.
When it comes to rewarded video ads, the opposite applies. Players will enjoy an uninterrupted gaming experience since they control when and if they want to watch them. These ads also reward players for their engagement, making them a more appealing choice.
How Much do Rewarded Video Ads Pay?
If you’re wondering how much rewarded video ads pay, unfortunately, there is no 100% reliable way to forecast that. However, you can use the global data about average eCPMs for rewarded video ads to get a general estimate.
For instance, here is some data on the average eCPMs across Android and iOS devices in 2020. Keep in mind that these values should be even higher today due to the mobile gaming market’s boom over the last few years.
| Android | Average eCPM for Rewarded Video |
|---|---|
| U.S. | $10 |
| Australia | $9.5 |
| Japan | $9 |
| New Zealand | $8 |
| Taiwan | $7.5 |
| iOS | Average eCPM for Rewarded Video |
|---|---|
| U.S. | $16 |
| Japan | $12 |
| Australia | $11 |
| U.K. | $10 |
| China | $9 |
As you can see, rewarded video ad revenue depends greatly on the devices you advertise on and the geographical location. However, the iOS market is more lucrative in terms of potential ad revenue.
Overall, the eCPMs for rewarded video ads are quite high in terms of industry averages. It’s safe to expect between $7 and $10 CPMs if you choose to monetize with rewarded video ads.
Rewarded Video Ads Best Practices
You’ll need to keep a few things in mind if you want to monetize successfully with rewarded video ads. Here are a few best practices to follow when using these ads:
Make the Benefits Crystal-Clear
Your value proposition is the driving force behind your rewarded video ads. In other words, it’s crucial that your users immediately understand the benefits of watching your ad.
That means you’ll need to ensure that your ad placements are visible, appealing enough, and convey your message clearly. Your ad placement should always clearly display the reward players will get if you want them to engage with it.
The clearer the benefits are, the more players will watch your ads.
Ensure the Reward Is Worthwhile
One of the most challenging parts of monetizing with rewarded video ads will be determining the optimal reward.
The thing is, you’ll need to do some math here to ensure your app stays profitable. Publishers will need to offer an enticing enough reward to attract players’ attention and make them engage with your ads. If your prize is too small, people won’t be motivated to engage with your ads and will find it too much of a hassle.
However, if you give away too much for free, you may end up losing money instead. That’s why the key to success with rewarded video ads is testing. Test a few different reward schemes, and see what gives the best ROI.
Make It Accessible
The key to profitable rewarded video ad placements is quality design optimized for user experience. That entails your ad placements being visible, emphasized, and accessible at all times.
For instance, if your “watch an ad” button is too small, hidden away in some menu, or blends in with the background, fewer people will click it. At the same time, you mustn’t make it too big to avoid misclicks.
Remember — moderation is a virtue, even when trying to increase video ad revenue. Excellent user experience pays off more in the long run, as it will boost your user retention.
Don’t Gate Too Much
Another vital thing to remember is not to overdo it with ads. If you spam users with ad placements on every corner and gate too much content, your users will get tired of it quickly and stop using your app. That will only hurt your bottom line in the long run.
Segment Users and Optimize Rewards
A useful strategy for maximizing your rewarded video ad performance is to segment users and optimize their rewards. The easiest way to do that is to split your user base into two categories: occasional players and loyal users.
Once you do that, you can customize the rewards based on these user groups. For instance, you could choose to offer higher rewards to occasional users to incentivize them to play more while reducing the rewards for your loyal user base.
This tactic is incredibly effective for drawing in new players with substantial rewards while giving your existing users more incentive to boost their progress with in-app purchases due to lower rewards.
5 Best Rewarded Video Ad Networks
If you’re looking to try your hand at rewarded video advertising, you’ll need to find a reliable advertising partner. Many rewarded video ad networks can provide you with the ad supply you’ll need to monetize your app, so choosing the right one is imperative. Here are some of the best rewarded video ad networks on the market to help you make the optimal decision:
1. Unity Ads
Unity Ads is a video ad network focused on connecting publishers and advertisers in the video gaming space. The platform was built by the creators of one of the most-used video game engines to date — Unity Engine.
The platform has various handy features that help publishers integrate, manage, and optimize their advertising efforts. The three features Unity Ads is most proud of are its Unity Acquire Dashboard, Audience Pinpointer, and Reach Extension. These help publishers and advertisers zero in on their target audience and manage their creatives across various platforms and apps.
Besides the above, Unity Ads comes with advanced ad analytics, a Unity Ads SDK, and various in-app purchase integrations. Overall, this network is one of the best choices for video game publishers, especially if they already use Unity’s video game engine.
Key Features:
- Monetization dashboard for managing ad creatives
- In-app purchases integrations
- Advanced ad analytics
- Unity Ads SDK
- Diverse ad formats (including rewarded video ads)
2. Vungle
Vungle is a video ad network that specializes in mobile app monetization. The platform offers publishers an easy way to integrate video ads with their app through the Vungle SDK. Vungle’s platform supports advertising across both Android and iOS devices and partners with 25% of the top 200 apps in those markets.
Vungle’s advertising platform offers a variety of ad formats and comes with advanced performance tracking software. The company is partnered with several other big names in the mobile advertising industry like Liftoff, GameRefinery, and JetFuel. These partnerships allow Vungle to offer the best advertising experience and maximum revenue to both publishers and advertisers.
Key Features:
- Android and iOS app monetization
- Vungle SDK
- Partnered with 25% of the top 200 apps on Android and iOS markets
- Advanced ad performance tracking
- High CPMs and revenue optimization tools
3. AdColony (Part of Digital Turbine)
AdColony is one of the first companies on the market to offer a mobile video ad network. The network currently has more than 1.5 billion users worldwide. Publishers and advertisers can enjoy a variety of mobile ad formats, including rewarded video ads, rich media ads, and much more.
AdColony supports cross-channel advertising, has advanced demographic targeting options, and prides itself on flexible and transparent monetization. The company is partnered with some of the largest brands in the mobile app industry, like Zynga, Miniclip, and King.
Key Features:
- More than 1.5 billion users worldwide
- Variety of mobile ad formats (rewarded video ads, interstitial ads, rich media ads)
- Cross-channel advertising
- Flexible and transparent monetization
- Advanced demographic targeting
4. AdMob
AdMob is Google’s mobile ad network that was founded in 1998. The platform is currently one of the largest mobile advertising networks on the market and offers some of the most competitive advertising options.
AdMob owns 70% of the Android mobile advertising market and 33% of iOS. The platform offers everything publishers need to start monetizing their apps, including ad analytics, a handy dashboard for managing their creatives, and an SDK for easy implementation.
With over one million advertisers on AdMob, publishers will access some of the most premium ad inventory in the industry.
Key Features:
- Google’s mobile advertising network
- 70% of Android mobile advertising market share (33% for iOS)
- Premium ad inventory (1+ million advertisers)
- In-app purchases support
- Advanced ad analytics
5. MoPub (Acquired by AppLoving)
MoPub is a renowned SSP specializing in mobile video ads. The platform supports many different ad formats, including display advertising, rewarded video ads, rich media ads, and many more.
MoPub works with over 100 DSP partners and supports advertising across both Android and iOS apps, making it incredibly versatile for various types of publishers. The platform comes with easy app integration through a mobile SDK, excellent protection and security features, and a versatile ad analytics suite.
Key Features:
- 100+ DSP partners
- Scalable auctions
- Easy app integration
- Versatile ad analytics
- High-end security features
So Are Rewarded Video Ads Worth It?
If you’re a mobile video game publisher, there’s no doubt that rewarded video ads are one of the best monetization options for your game. However, no monetization model is flawless, so rewarded video ads also have a few downsides. Here’s a quick overview of the positives and negatives of using rewarded video ads:
Pros:
- These ads are less intrusive than other app monetization methods.
- They engage users better and come with high viewability rates.
- These ads are easy to implement and blend in well with other ad formats.
Cons:
- These ads must adhere to stricter policies than other ad formats.
- The reward behind these ads can distract users from the ad itself.
- These ads can lead to a poor user experience if overused.
Although these downsides may seem significant at first glance, they are not stopping millions of advertisers and publishers from using rewarded video ads to drive consistent revenue and grow their businesses. If you’re a mobile gaming publisher, you’d be remiss not to take advantage of the high CPMs this ad format has to offer.
What About OTT Publishers?
If you’re looking to launch an OTT app, this ad format won’t work for you. However, there are many different types of video ads that do work on OTT apps.
Getting into OTT advertising and monetizing your OTT app isn’t mission impossible. The easiest way to start would be to find a reliable OTT platform to help you build, launch, and monetize your app, like Brid.TV.
Our platform comes with extensive Android, iOS, and tvOS SDKs that allow publishers to easily integrate our video monetization system with their OTT apps and leverage our advanced monetization options like video header bidding, ad podding, and much more.
If you’re in the OTT industry and need a solution to get your content across various OTT devices and monetize it, get in touch with us, and let our team of experts help you.
