Rewarded Video Ads: The Guide to Higher Engagement & Revenue

Digital publishers and app developers are constantly searching for ad formats that improve revenue without damaging user experience.  One of the issues that is commonly experienced by display ads is banner blindness, lack of engagement, and reduced CPMs. This is precisely why rewarded video ads emerged as one of the best ad formats out there.

Rewarded video advertisements give users the option to watch advertisements in order to be rewarded for their efforts.The advantages that result from this include engagement, retention, revenue, and user satisfaction.

What Are Rewarded Video Ads?   

A rewarded video ad is a form of advertising wherein users choose to watch ads for rewards such as in-game currency. This form of advertisement does not disrupt the user experience since unlike traditional ads, the user watches them by choice.

Rewards may include:

• Virtual currencies

• Additional life in games

• Premium content

 Example 

A mobile gaming app can include:
“Watch a 30-second video to get 100 coins.”

Key Benefits of Rewarded Video Ads   

Moreover, for publishers, it means stronger ad monetization for publishers without frustrating users.

How Rewarded Video Advertising Works   

The idea behind the rewarded video ad is that the value exchange takes place whereby the viewer watches the video to earn a reward.

1. User Sees a Reward Option (Ad Placement Trigger)   

It all begins in an application or game where the publisher inserts a reward-based access point.

Examples:

 “Watch the video to earn 100 coins”

2. User Opts In (Intent-Based Engagement) 

The user clicks voluntarily to claim the reward.

The importance of this process lies in the following facts:

• It makes sure that there is high intent engagement.

• Helps in completing advertisements successfully.

The interstitial advertisements are not played until the user approves.

3. Ad Request Sent to Ad Network   

This request contains:After the user consents, the application then makes a request to an advertising mediation platform or network such as Google AdMob or AppLovin.

• User's device information

• Location (if permitted)

4. Video Ad is Delivered and Played   

The chosen video advertisement appears to the viewer, normally:

• Between 15 and 30 seconds in length

• Full screen display

5. Tracking Completion (Verification System) 

It keeps track if the viewer:

• Saw the whole video

• Did not skip the video

6. Reward is Granted to User 

On completing the activity, a reward call-back event is triggered by the system.

The user receives immediately:

• Points/coins (in gaming applications)

• New features (in media applications)

 7. Revenue is Generated for Publisher   

Meanwhile, the income is generated by the publisher.

How?

• Advertiser pays ad network for views/completed views.

• Ad network splits the revenues with the publisher

Users interaction helps rewarded video ads to earn higher eCPM compared to usual display ads

Why Publishers Are Increasingly Using Rewarded Video Ads 

As user expectations continue to evolve, publishers are looking for advertising formats that generate revenue without negatively impacting the user experience.
Here’s how:

1. Improved Retention Rate 

The good thing about rewarded advertising is that users will remain interested in your app for more extended periods due to the rewards. This will make them come back again and stay longer on the app or platform.

 2. Higher Revenue Potential   

Advertisers generally end up paying high CPMs for users who interact with their advertisements, which in turn gives higher fill rates, high eCPMs, and high lifetime values.

 3. Improved Ad Viewability   

Since the user is watching the ad intentionally, viewability rates will be much higher when compared to display ads.

This means:

• Higher advertiser performance

• Higher demand for campaigns

Best Use Cases for Rewarded Ads   

There isn't one size fits all when it comes to rewarded video ads.

Here are the most successful examples.

1. Game Applications 

Games still stand out as the best vertical for rewarded video advertisements.

Examples of rewards include:

• Additional lives

• Coins

• Unlocked characters

2. News & Content Publishers 

More publishers now resort to rewarded ads to strike a balance between revenue generation and subscription-based models.

Examples:

• Unlock premium content

• Grant access without paywalls

It's turning out to be a viable option as compared to popup ads.

3. Streaming & Entertainment Applications 

Streaming applications may employ rewarded advertising that:

• Unlocks bonus episodes

• Enables extended viewing period

• Grants access to ad-free preview

4. eCommerce & Retail Apps

The following rewards can be provided to users by retail publishers:

• Discount Codes

• Cashback

• Free Shipping

• Points

Building an Effective Rewarded Ad Strategy 

Rewarded ads do not merely entail presenting advertisements; rather, it is about ensuring that the correct reward is delivered to the appropriate user in the best manner possible.

1. Place Rewarded Ads at the Right User Moments   

The Timing Factor is the most crucial one in rewarded ad videos.

Don’t show advertisements randomly; do that in situations when users require help or some additional push.

Examples:

• Right after the game level completion

• If the user doesn’t have any more lives/energy

2. Offer Meaningful and Valuable Rewards 

The effectiveness of the rewarded advertising user experience largely depends on how valuable the rewards are.

If the reward is negligible or insignificant, the user won’t even pay attention to the advertisement.

Examples:

• 100–500 coins in the game

• Additional life or additional attempts

• Unlocked locked levels

3. Keep Frequency Balanced (Don’t Overdo It) 

Just because rewarded ads are user-initiated does not mean that displaying them too often will not lead to fatigue.

Consequences of High Frequency

• Users overlook rewards

• User engagement declines

4. Make Rewards Instant and Smooth 

Another reason why rewarded ads have been so effective lies in the immediacy of rewards.

If there is any delay in rewarding viewers, trust will be lost.

Good flow:

• User sees ad

• Ad finishes

5. Use Smart Targeting and User Segmentation 

All users don’t act alike. A robust rewarded ad model should adapt according to the category of users.

User categories:

• New users (recently downloaded the app)

• Regular users (users who have some level of engagement)

• Valuable users (extremely engaged users)

6. Test Different Rewards and Placements (A/B Testing) 

A/B testing involves testing various configurations to figure out which one performs better.

What can be tested:

• Reward amount (50 coins vs. 100 coins)

• Ad scheduling

Common Mistakes Publishers Make With Rewarded Video Ads 

1. Giving Out Low Value Rewards 

This is one of the worst ways to implement the rewarded video technique. People will skip the chance of getting some rewards because they don't feel any value from such rewards.

2. Showing Ads Too Often 

This can result in ad fatigue even when the user is offered an opportunity to watch a rewarded ad optionally.

3. Bad Timing or Wrong Placement 

If the reward ads don't show up at the appropriate times or at the proper place, it will interrupt people.

4. Rewarding People Too Slow or Not at All 

There is no point offering a reward when people don't get it or it doesn't appear after the completion of the video.

Best Rewarded Video Ad Networks for Apps

Choosing the right ad network is one of the most important steps in implementing rewarded ads. Ad networks connect publishers with advertisers

1. Google AdMob 

Google AdMob is one of the most popular platform for rewarded video ads.Simple, easy integration, and supported by a huge pool of advertisers from Google.

Why publishers choose AdMob:

• Demand from a lot of advertisers globally

• High fill rates across multiple countries

2. Unity Ads   

Unity Ads works best in the gaming community. This platform has a close relationship with the Unity game engine; hence, it is used by many game developers on their mobile applications.

Reasons for good performance:

• It targets mobile games mostly

• High-quality performance of rewarded video

3. AppLovin   

AppLovin specializes in cutting-edge technology for maximizing monetization and optimizing the performance of in-app advertisements.

Features of AppLovin:

• Advanced ad mediation platform

• Ad revenue optimization through artificial intelligence

• Excellent rewarded ads

Rewarded videos ads are some of the best strategies that can be used by publishers and application developers for monetization of their products. Instead of the normal display videos that act as interruptions, rewarded videos create a model whereby both users and advertisers benefit from watching advertisements.

The described monetization format is highly effective in terms of user engagement, retention, and income generation while offering a great rewarded ads user experience. The secret to success of any publisher consists in the right combination of good ad monetization and user-oriented policies, which don't cause discomfort.

Additionally, rewarded ads can positively influence the general quality and popularity of apps. Finally, working with reputable and effective ad networks, such as AdMob, Unity Ads, AppLovin, can further optimize results.

To summarize, today's publishers have many tools at their disposal but the success depends on finding the right solution for them. 

FAQs 

1. What are rewarded video ads?
Rewarded video ads refer to those ads that users opt to see willingly in exchange for receiving some kind of reward within the app, such as extra coins, lives, etc.

2. Why is rewarded ads better than usual ads?
This type of advertising improves users' experience in many ways since ads become optional and, thus, users are more likely to interact with them without any annoyance.

3. Are rewarded video ads good for increasing revenue?
Yes, since they result in higher eCPMs and completion rates than usual ads do.

4. Where do rewarded ads apply?
They can be seen in mobile games, news applications, streaming platforms, and eCommerce apps.