Blog AdColony share why rewarded video is mor...

AdColony share why rewarded video is more important now than ever

In our latest guest post, Melisa Matlum, Marketing Executive from leading global mobile app advertising and marketing platform AdColony, explains the importance of rewarded video, its monetization potential and why it’s among users’ preferred ad formats.

It’s no secret among advertisers that in-app advertising is a valuable opportunity for monetization. According to data from the GlobalWebIndex, users spend over three hours per day in-app, meaning there have never been more opportunities to reach your target audiences.

For brands, the popularity of opt-in value exchange advertising (aka rewarded video ads) is growing. Rewarded video ads are also proving to be users’ preferred form of advertising, and provide powerful metrics that boost KPIs and drive success for advertisers.

From music to publishing, gaming, dating apps, and more, opt-in value exchange advertising is increasingly being embraced as an ad format that provides true value for consumers. Advertisers also like rewarded videos because completion and install rates are usually very high, and as a result, publishers see increases in overall ad revenue and eCPMs. It’s a win-win situation, as advertisers can grow their earnings without having to compromise their users’ experience.

What is rewarded video?

A rewarded video ad is a video that the user can watch in exchange for an in-game reward, including in-game currency, an extra life, or extended playtime. eMarketer’s Mobile In-Game Advertising report states that most developers utilize in-game advertising for monetization, and that the majority use rewarded video as part of this strategy. Rewarded video ads are also used outside of the gaming vertical. In a news app, for example, users may need to watch an ad before being able to read an article.

Who prefers rewarded ad videos?

According to the Modern Mobile Gamer study published by AdColony, the vast majority of users (90%) state that rewarded video is preferred to other methods of in-app monetization. Rewarded ads have the most positive perception among both users and advertisers, especially since they do not affect gaming experience and offer rewards in exchange for ad viewing. Other findings from the Modern Mobile Gamer Report include:

  • Millennials are most likely to make purchases

    Rewarded video ads are favored by all age groups. When looking at users 75 years and older, 100% of respondents said that rewarded video is their preferred form of advertisement. Mobile gamers aged 25 to 34 (millennials) also prefer to watch rewarded video, but almost 20% of them are also willing to spend money in-app. Finally, while the “digital natives” of Generation Z are likely to make in-app purchases, they still favor rewarded videos.

  • Rewarded video is the top choice across all income brackets

    AdColony’s study also shows us that even as user income rises, rewarded ads still hold favor. In fact, those with household incomes of more than $150,000 had the highest share of preferring rewarded video.

  • Men and women both prefer rewarded video

    When looking at the answers of female and male respondents, we found that only 8% of female respondents and 14% of men prefer to pay money to earn rewards. While the difference is slight, the data shows us that male mobile gamers tend to spend more money on games than women - but that both groups are enthusiastic mobile gamers willing to watch rewarded video.

Strengthening your monetization strategies by choosing the right ad format

Rewarded video is one of the most effective forms of monetization available to publishers, but like much of mobile monetization, the devil is in the detail. Between rewarded video caps, eCPM, use rate, and impressions, it can be a little daunting to figure out how best to implement this lucrative and rewarding experience for users.

Why should you feature rewarded video in your app?

  • Give the people what they want: Rewarded video ads are successful in all demographics, and those that create value exchange and do not disrupt the user experience will continue to
  • Keep advertisers happy: Rewarded ad video usage highlights important metrics including completed views, as users are not rewarded without watching the video until the end. In addition, since users are opting-in, metrics such as engagement increase time spent with brands, and the rate of brand and ad recall go up.
  • Users will return: Users will be more inclined to return to games where they can more easily acquire in-game currency and other hints and boosts - all of which can be attained via rewarded video. Users also want to spend more time in-game when additional lives are offered, resulting in longer session rates.
  • Increased ad revenue: Rewarded video has been proven to increase both overall ad revenue and eCPMs.

While many developers have been aware of users’ preference for well-produced and integrated ads in mobile games for years, the space has largely been dominated by apps in other verticals. But this is set to change as contextual advertising becomes increasingly relevant under Apple’s new IDFA opt-in requirements for iOS 14.

With the opt-in nature of rewarded video, developers have a friendly way to educate users about their own data collection and privacy practices when Apple makes the big changes to iOS 14 privacy requirements in early 2021. If you’re a developer and rewarded video isn’t a major part of your monetization strategy, now’s the time to take the leap.

For more information on app monetization and in-app advertising, you can read our blog article here. You can follow AdColony on LinkedIn to find out more about what they do.

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