Rewarded Video Ads: 7 Essential Best Practices for 2023

Rewarded video ads are an essential part of a game or app's growth strategy. A user watches an in-app video ad and receives rewards in return.

As per eMarketer, 74% of users would watch an ad in exchange for in-app rewards or currency. Players who watch rewarded video ads are 6 times more likely to complete in-app purchases.

Hence, it's a win-win-win for users, developers, and advertisers. You must be thinking, 'But how?' Let's explore the seven essential best practices of rewarded video ads and jump-start your stagnant source of revenue.

But first, let's start with some basics.

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What Are Rewarded Video Ads?

‍Rewarded video ads are concise video advertisements that users can opt to watch within apps or games. By choosing to view these ads, users earn rewards like in-game currency or special bonuses. This format emphasizes user choice and engagement, benefiting users, publishers, and advertisers alike.

The idea is straightforward and effective. Users watch a short ad fully and, in return, receive valuable rewards in the app or game. These rewards vary, including in-game currency, bonus lives, exclusive content, or other appealing in-app items.

However, rewarded video ads offer more than just a watch-and-earn approach. They redefine the typical user experience. Rather than being intrusive, these ads empower users by offering them a clear choice.

In this opt-in model, users are not just passive viewers. They actively participate in the advertising process, choosing when and how often to watch ads with a specific goal – earning rewards. This engagement makes the ad experience less intrusive and more natural.

For publishers, these ads go beyond mere monetization of an app or game. They are tools to boost user engagement, retention, and loyalty. When executed well, they can transform the often negative ad-watching experience into a positive and anticipated interaction.

Advertisers benefit from this format through assured attentive viewers. Unlike other ad types, which users might skip or ignore, rewarded video ads ensure the ad message is fully watched and absorbed. This results in higher completion rates and more engaged viewers, effectively conveying the brand message.

In the broader context of digital advertising, rewarded video ads are distinctive. They effectively bridge the gap between user interests and developer needs, providing advertisers with a platform where their message is not just seen but valued and appreciated.

• 71% of players prefer in-game video ads more than paid apps or in-app purchases
• 54% of players specify that rewarded video ads are their in-game video ad of choice
• 62% of players regularly chose to voluntarily engage with rewarded video apps
• 62% of developers saw user retention maintain or increase upon the introduction of rewarded video ads
• 52% of mobile game developers said that rewarded video apps served as their most lucrative type of in-game advertising, per user

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A quick snapshot on 'What are rewarded video ads?'

• Rewarded video ads are a short video ad format
• It has virtual gifts or in-app incentives (lives, coins, bonus tips)
• It is around 15 seconds long
• There is a choice for the user – a clear choice to opt in or opt-out
• It is also a non-skippable video ad by nature

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How Do Rewarded Ads Work?

Rewarded video ads operate on a simple yet effective premise: they offer users a clear incentive to watch a video advertisement. These ads are common in mobile apps and games, appearing at crucial moments, like between game levels or when a user needs extra resources.

Users choose to watch these ads, knowing they'll receive a specific reward afterward. This could be bonus points, in-game currency, or extra content. This choice-based method not only secures higher engagement rates but also promotes a positive user experience. Viewers willingly interact with the ad to gain something valuable.

These ads align the interests of users, advertisers, and developers, creating a balanced advertising ecosystem that benefits everyone.

Below is the flowchart for the rewarded video ad, outlining the key aspects of the monetization process:

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What Is Rewarded Video Ads Revenue?

Rewarded video ads generate income for app developers or publishers when users watch these ads in exchange for in-app benefits. An analysis of the provided chart shows that the revenue rates (eCPM) vary depending on the platform, country, and the user's device, whether it's Android or iOS.

For example, Admob in the UK provides an eCPM of $10 for Android and a higher $17 for iOS. In contrast, local advertisers in India offer around $1 for Android and approximately $5 for iOS. This variation highlights the importance for advertisers and developers to strategically choose platforms and regions to maximize their returns.

Here are some notable examples of rewarded video ad offers, along with their respective platforms, countries of origin, and rates.

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What Are the Top Benefits of Rewarded Video Ads?

Rewarded video ads can be valuable to developers, users, and advertisers. Let's dig in and find the ways it helps the three key parties of the gaming ecosystem.

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Benefits for users

1. User is empowered with a choice – When to pick and watch a video ad. The rewarded video ad never auto-plays, nor is the user forced to watch it
2. There is always a reward for watching ads — These ads are always complemented by an incentive, like coins, lives, extra time, and more
3. App prices are lower or a few in-app purchases that involve money — The user purchases benefits and features with their attention and time

Benefits for publishers

1. User retention rates are high — The level of frustration is low on the user side as they can watch a video to earn hints, extra lives, or some coins, rather than giving up on the app entirely
2. The rate for users' opt-in to ads is high — 76% of US mobile gamers prefer opt-in rewarded video ads over interstitial ads. Thus, more users prefer to watch rewarded video ads, which can act as a lucrative measure for the developer besides direct in-app purchases
3. The number of downloads is more — If an app is available for free and eventually makes the developer money via rewarded video ads, more users will download the app

Related: What is Intrusive Advertising?

Benefits for advertisers

1. Ad views completion rate is higher — In this scenario, the user isn't rewarded unless the ad is viewed entirely, so it's less prone to be skipped or cut off from viewability
2. Enhanced audience targeting – The user is choosing to watch the video ad; so probably they prefer to watch ads out of interest or are inclined toward it
3. Greater viewer satisfaction – These rewarded video ads are opt-in and non-intrusive. Users or viewers tend to look at the advertiser more constructively

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What to Consider When Implementing Rewarded Ads?

1. Proper ad placement is necessary: Remember that implementing rewarded video ads within your app will govern its impact on user experience. To safeguard your ad's best placement, make sure to prioritize UX. When you are pondering when and where to place rewarded video ads, always consider what's most vital to your users
2. Offer in-game hints & mystery rewards surprise: If you have a mobile game, another reward that may be valuable to your users is in-game assistance and surprise rewards. Place mystery rewards to boost engagement. Consider unexpected rewards offered as it is one of the most satisfying user experiences. It increases satisfaction and drives curiosity when a high-value reward is unlocked. If your user wants to acquire a specific reward, they will consider watching multiple ads to achieve their goal
3. Prioritize user experience: Users don't mind watching an ad if they are getting something valuable in return. However, there is no need for an intrusive ad format to sacrifice a user's experience. In its place, you can ensure in-app experience is the top priority and try to deliver ads in a unified manner
4. Targeting the right audience: Always segment your users into distinctive audience groups. Initiate your audience segmentation based on user behavior and how they are interacting with your ads. You can offer fewer valuable rewards for users who frequently use the app, so they remain engaged and hooked on it. For users who use the app rarely, you can surprise them with a high-value reward to reassure them to use the app more often
5. Boost your in-app purchases: You can use rewarded video ads to promote in-app purchases. Rewarded video ad format encourages numerous users to opt-in for in-app purchase access for a superior experience. Similarly, users who have received a reward for watching a video ad are more likely to make in-app purchases
6. Always A/B Test multiple rewards for optimum outcomes: It is vital to test various types of incentives or rewards that you can offer to your users. Testing helps developers discover which rewards are most valued and recognize optimal offerings to monetize their apps better. When you are A/B testing the rewards, incorporate variants such as ad duration, reward type, ad placement, and quantity per session
7. Continuously test monetization partners for better demand: Publishers should constantly optimize their demand stack and try out monetization partners that enhance fill rates and ad revenue. Monetization partners and ad networks aggregate bids from multiple demand sources, allowing you to secure ads with high CPMs and quality content.

How to Create Rewarded Video Ads Strategy?

Creating a successful rewarded video ads strategy involves understanding your audience, selecting appealing incentives, and constantly refining your approach to boost engagement and revenue.

1. Understand Your Audience: Start by researching your users' habits within your app. Identify when they are most active to determine the best times to offer rewarded video opportunities.
2. Select the Right Incentives: The rewards should be compelling enough to motivate users to watch the entire video. Options can include in-game currency, unlocking premium features, or providing extra content.
3. Optimal Placement and Frequency: Place the ads at natural breaks or transitions in your app. This integration makes it more likely for users to view the ad without disrupting their experience.
4. Collaborate with the Right Ad Networks: High-quality, relevant ads are key to exceptional ad revenue. Partner with networks that align with your user demographic to enhance engagement.
5. Integrate Direct Demand: Secure additional ad budgets through direct partnerships with brands. This can be done by establishing direct relationships or working with demand providers that have connections with brands and agencies.
6. Test and Iterate: Regularly review the performance of your rewarded videos. Conduct A/B testing to identify which rewards, ad placements, and frequencies are most effective.
7. Stay Updated: The digital advertising landscape is constantly changing. Keep up with new trends, technologies, and best practices in rewarded video advertising to maintain a dynamic and effective strategy.

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How to Earn Money With Rewarded Video Ads?

Using rewarded video ads in your app or game is a brilliant way to offer a high volume of valuable and quality impressions, significantly increasing the app's revenue. 

Proposing players with valuable in-game bonuses for interacting with an ad spawns greater engagement and clicks. Developers using rewarded video ads have positively impacted both user engagement and revenue.  

Monetize your app quickly and easily with rewarded video ads — you can find rewarded video ad formats available at iion.

Learn how to engage your players while capturing premium revenue from the rewards granted. Leverage iion’s monetization solution, fusiion, that collects demand from multiple sources and captures high-value demand that resonates with your players. Your ad revenue is backed by fusiion’s unique demand composition that consists of premium demand from top direct, programmatic, and Google sources. Ready to master your game revenue?

Connect With Us Today!

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