Rewarded Video Ads: Everything You Need To Know
When building a game, developers need to decide which ad formats to use. Each ad format has its pros and cons depending on the type of game. However, one format stands out in terms of performance and user response across most genres: the rewarded video ads.
Rewarded video ads are a particular type of ad format that gives users a reward for viewing an ad, such as in-game currency or a power-up. They are incredibly popular among all the participants in the ad monetization ecosystem: developers, advertisers, and players.
In this article, we’ll break down what makes rewarded video ads so popular. More importantly, we’ll discuss how you can use them in your game monetization strategy.
What Are Rewarded Video Ads?
A rewarded video is a user-initiated ad format where users can earn in-app rewards by watching a short video advertisement. It’s different from other video ad formats in that it doesn’t interrupt the users’ experience with the game. Instead, it is a genuine opt-in experience that benefits all the parties involved.
How Do Rewarded Video Ads Work?
The standard rewarded video format works this way:
- A user is given an option to watch a short video ad. In exchange, they’ll receive in-game currency, power-ups, or other rewards.
- A user is shown a 15 to a 30-second video ad. They have to see through to the end in order to gain a reward.
- The user resumes the gameplay with the reward in their account.
Rewarded videos are best used at specific points of the game when the player needs an additional boost. It may come in the form of extra lives, in-game currency, or the chance to continue the game instead of restarting the level.
As users find them desirable, developers can benefit from their high conversion rates and revenue, user retention, and engagement rate.
Rewarded videos offer a lot of benefits to advertisers as well. There are very few ad formats out there that give users an incentive to engage with the ads. However, rewarded video ads do precisely that.
What Kind Of Rewards Do They Offer?
Rewarded videos are often referred to as “a win-win situation” for all the parties involved, including advertisers. Since users can watch an ad and benefit from it, they are more willing to interact with them.
Rewarded videos give users a chance to watch rewarded video ads earning them hard currency rewards such as in-game currency; or soft currency rewards, including extra lives, power-ups, boosts new levels, and more.
The type of reward offered will vary from genre to genre. Free lives and free moves are the most popular types of rewards offered in rewarded video ads, but they work exceptionally well in games that require users to wait for a certain amount of time before they can play again.
How Popular Are Rewarded Video Ads?
Rewarded video ads have become the most popular video game ad format used by over 80% of developers. According to the Meta Audience Network advertising report, nearly the same percentage of developers report that rewarded videos are their most successful ads. This doesn’t come as a surprise since rewarded video ads have been shown to increase revenue by as much as 40%.
In terms of player experience, 32% of players find them useful, 27% consider them interesting, while 12% find them enjoyable. Only 24% of users find rewarded video ads intrusive while nearly 70% of players state that they like the format. The ad format is popular among all game genres, whether they are casual (85%) or hardcore and mid-core (76%).
How Much Do Rewarded Video Ads Pay?
In terms of the average rewarded video ads revenue, it all depends on the type of game. Games can be regarded as those that primarily earn revenue from ads (anywhere from 50% to 100% of their revenue) and those that earn revenue from in-app purchases (IAP). The primary source of revenue will largely depend on the game genre and video ad monetization strategy.
Due to their high levels of user interaction and click-through ratio (CTR), rewarded video ads generally have a much higher effective cost per mile (eCPM) compared to other ad formats. In some cases, the rewarded video ads eCPM may be as high as $100, depending on the type of game and player demographics.
The Benefits Of Rewarded Video Ads
Rewarded video ads provide both players and game developers with a wide range of benefits. They help players by offering them rewards in return for engaging with ads while allowing developers to earn more revenue from the ads.
An Improved User Experience
Users can choose whether or not they want to watch a rewarded video ad, resulting in better performance. It is an opt-in ad format that does not block gameplay or interfere with the user experience.
Rewarded ads are very popular among players. They make users feel like they are getting something of value in return for their time and attention. This keeps players engaged and entertained while also progressing faster through the game, thus increasing user retention.
Improved User Retention And IAPs
Rewarded video ads also help developers improve the user retention rate, which leads to higher revenue from IAPs.
Games with high user retention can earn as much as 5 times more revenue than those who focus on user acquisition alone.
Rewarded ads are very effective in helping developers increase user retention, which is one of the most significant factors in determining game revenue.
Furthermore, the rewards earned from these ads may give players a free taste of their premium content, making them more likely to purchase the same benefits in the future.
Therefore, in addition to ad revenue, rewarded video ads may also directly influence revenue from in-app purchases.
Improved CTR For Advertisers
Advertisers are also very fond of rewarded video ads, as they offer better viewability and click-through ratio due to the fact that advertisers only pay for the ads that users view through to the end.
Rewarded video ads are therefore an effective way for advertisers to reach their desired target audience, which is more likely to interact with this type of ad than any other ad format.
The Challenges Of Rewarded Video Ads
As with every ad format, rewarded video ads also have their own set of disadvantages, mainly due to the fact that users can choose whether or not to engage with the ads.
Since users can choose whether or not to watch a rewarded video ad, the number of views and amount of revenue generated may be lower than in non-video ad formats if the implementation is not done well. This is especially true for games with a low level of engagement, high drop-off rate, or games that are played for a short period of time.
Low-Quality Traffic And User Engagement
Users who opt-in to watch a rewarded video may only be in it for the reward. If the ad does not properly target the user, they might not be interested in what the ad has to offer, leading to lower rates of user engagement and lower traffic quality.
In-App Purchase Cannibalization
The biggest risk developers are facing when using rewarded video ads is the risk of cannibalization of in-app purchases (IAPs). For that reason, developers need to be careful to balance the economy and not give away too many free rewards.
They need to find a fine balance between not giving too little in the way of rewards that will not motivate users to opt-in to watch ads and giving too valuable rewards that will put the IAP economy in danger. This sometimes requires developers to go through a trial and error approach or do one or more A/B tests.
Which Ad Networks Offer Rewarded Video Ads?
Many ad networks support rewarded video ads, but the list below includes major rewarded video ad networks that many developers use in the industry. All of them will be available for use both on iOS and Android:
- AdMob by Google
- Audience Network by Meta
- and many, many others (though you should always be careful when considering less known and used ad networks)
What is the Best Rewarded Video Ad Network?
There are a number of rewarded video ad networks for game developers to choose from. However, the best one will depend on your specific needs and preferences. Some factors you may want to consider include the quality of ads offered, how easy it is to work with the network, and their average eCPM. Ultimately, the best rewarded video ad network for you will be the one that offers the most value for your game and your players. Experiment with a few different ones to see which works best for you.
Rewarded Video Ads Best Practices
Rewarded video ads are an excellent way for developers to monetize their games. By including rewarded video ads in their apps, developers can earn money while users enjoy an ad-free experience.
When adding rewarded video ads to your app, be sure to follow the best rewarded video ad practices below:
Choose the Right Ad Network
A variety of ad networks offer rewarded video ads, so choosing the one that’s right for your app is essential. Consider factors such as ad format, eCPM, and fill rate when choosing an ad network.
Pre-loading rewarded videos can help ensure a seamless user experience. By pre-loading the video, you can avoid interruptions in the user’s gameplay.
Offer An Incentive
For users to watch rewarded videos, they need to be incentivized. Offering an incentive such as in-game currency or power-ups is a great way to get users to watch the videos. However, make sure your incentives are not too generous to avoid cannibalizing your IAP revenue.
Ads should also be relevant to the user and pop up when players need more lives. However, it is essential to avoid showing the same users the same reward or offer in a short period.
Mind Their Placement
Rewarded video ads – where players can earn in-game currency or items – will yield the best results if placed at appropriate points in the gameplay flow.
They should show up where users are most likely to need help and incentivize players to engage. While you can show rewarded video ads at any point in the game, letting users complete a level before offering them an ad is usually advisable.
Personalize the Reward
Use user data to create personalized offers for players, giving them more incentive to watch the ad. Personalized recommendations will yield higher rewarded video eCPMs because the most relevant users will watch the ads.
Test, Test, Test
Before launch, be sure to test your rewarded video ads implementation. This will help ensure that everything is working as intended and that there are no issues with the user experience.
Once your app is live, it’s essential to monitor the performance of your rewarded video ads. Keep an eye on metrics such as eCPM and fill rate to ensure that your ads are performing well.
By following these best practices, you can ensure that your rewarded video ads are successful and generate revenue for your app.
Can I Use Rewarded Video Ads in My App?
Rewarded video ads are an excellent way for developers to make money while providing a valuable service to their users. These opt-in advertisements are less intrusive than other ads. As users find them beneficial, they are becoming more and more popular. Rewarded video ads are a great way for both developers and advertisers to make money. Moreover, they are sure to become even more popular in the years to come.
The team at GameBiz Consulting knows that rewarded video ads are one of the highest-performing ad formats available to game developers of all shapes and sizes. Our ad monetization team works directly with all the major ad networks to implement premium revenue opportunities for mobile game developers. This ensures you get the highest possible price for the traffic from your game through careful implementation, analysis, and optimization!
Find Out More