Rewarded video advertising has produced huge benefits for mobile games . With user sessions increasing up to 34% after engaging with a single rewarded ad and 85% video completion rates, the technology is poised to disrupt advertising models in non-gaming verticals on all platforms.
We recently sat down with Pratik Shah, the Senior Director of Ad Products at Tapjoy to talk about the status and future of rewarded video advertising in and out of the mobile gaming industry. Pratik and our Senior Product Specialist, Joli Baretta, took a closer look at growth opportunities for mobile games, the ROI and benefits of rewarded video ads, and how app developers can best align their Adjust dashboard with their video advertising goals. Learn more by listening to the video webinar with Pratik and Joli's full slide decks or follow along with the transcript below.
Pratik Shah: Let's talk about the app ecosystem, mobile advertising, and where the industry is. As most of you know, the mobile and the app ecosystem has seen large growth over the last six to seven years - and this is not stopping. In the next five years, we’re expecting to see significant growth in the number of app downloads as well as usage - about 56% growth expected in the number of ad download itself.
Now, the interesting part is that within apps and within mobile, we are seeing gaming as the largest growth opportunity in mobile. This is backed up by some of the research that we did at the start of the year. A few insights that we derived from that - gaming is the number one category in mobile, with about 55 minutes spent all day on it for every user. This exceeds the amount of time people are spending on social, and that's huge.
70% of mobile users actually play mobile games, and this is going to grow to 81%. This is, again, really important, because when we think of mobile gamers, it's not your 18 to 24 age group. In fact, as you can see, it's the smallest part. The largest percentage of users are actually between 25 and 54 years of age. In fact, 55-plus is pretty significant as well. All in, everyone is playing mobile games. If that's where people are spending a lot of time, this becomes a really, really important avenue for advertisers to consider their budgeting.
Now, mobile games are very different from the environments that you see in social or in the news or other publishers. Mobile games have essentially become experts in this model called a freemium model. It’s really about allowing a user to enjoy free content without an up-front paywall or ‘give me a dollar to download this game’. The idea is to give free content to the user. Allow the user to understand and enjoy the game, and then let them upgrade or buy certain things when they really understand and enjoy the game in the first place.
This kind of content mechanism has taken off in gaming, and we're seeing that it does expand far beyond gaming as well, but this enables a very different kind of advertising, what we call as rewarded advertising. The concept of rewarded advertising is really simple, a user can either choose to pay for specific content, or specific coins in a game, or specific games in a game, or they can choose to engage with an ad. This choice enables what we believe is very high quality advertising and very high quality engagement for everyone, the users, the publishers, as well as the advertisers.
This has been backed up by research. In fact, the follow-up report on modern mobile gaming in June this year confirmed this. Gaming users prefer rewarded advertising far more than any other kind of advertising in their games. They do it because it's a far superior user experience, as well as a better value exchange model for them. Ultimately, what we're seeing is that while mobile advertising is seeing such growth, rewarded advertising is a very critical part of this advertising. We believe this is the best model that will apply to gaming as well as extend far beyond gaming.
Let's talk a little bit about the history of rewarded advertising and understand where rewarded advertising has been and where it's going. Rewarded advertising started pretty much at the same time as when the app ecosystem started and when gaming itself began on mobile. Tapjoy, as many of you know, started the entire concept with a specific ad unit called Offerwall. This ad unit was extremely successful in a variety of ways.
It helped publishers and game publishers really earn a lot of money and give their users value for their freemium content. It also helped advertisers - in the early days of the mobile ecosystem, getting your app to a certain rank in the app store was critical. This was enabled by our ad format in Offerwall. We've partnered and seen a lot of companies build on the strength of Offerwall to actually be able to build viable businesses.
Now, while that's been the pioneer in rewarded advertising, and that's where it all started, rewarded advertising has evolved from an Offerwall-centric advertising model to what we are seeing now as video. Video has become popular for a variety of reasons - around internet speeds, around Facebook and Snapchat popularizing video. We're seeing effects of that in rewarded advertising as well.
Rewarded video is a very engaging and rich experience, where an advertiser can reward a user to engage with a video, then allow the user to take a post-engagement action, which is not rewarded. That gives an interesting balance of all the benefits of rewarded, where users are leaning in and getting rewarded for engaging with the brand, and yet, taking the action, whatever that action could be. It could be taking a ride on Lyft or Uber, or it could be going and booking tickets. That is completely non-rewarded. You get very high intent from users, combined with very high engagement with the video itself. That's where all of the innovation in rewarded model is happening today.
Let's talk about the future and where we believe this is going. We’ve all heard about virtual reality and augmented reality. In fact, pretty soon, people are going to try and predict ‘this is the year of virtual reality’ and ‘this is the year of augmented reality’. We think it's a few years away, but while companies like Apple and Google start innovating, what's clear is that the model that would really succeed is already established - a rewarded video and interactive video.
We see this model extending very easily to virtual reality as well as augmented reality, and hence, this becomes the de facto advertising model for future devices over the next five to ten years. All in all, rewarded video is really a great model that the industry and Tapjoy have perfected.
Let's talk about the benefits of rewarded video advertising. We spoke about how users really want it and games have told us that they really want it. Some of the things that we see that are really good about rewarded video advertising are that, firstly, for the publisher and the user, it's an opt-in experience. The user experience is far superior. You all remember a time on YouTube when you tried to skip that particular ad or an intrusive banner coming up when you're reading your favorite news article? That does not happen in the world of video - it's a far better user experience. Secondly, we've seen increased retention, revenue, and in-app purchase for the publishers. It's a win-win, really, for both the users and publishers.
Here’s some data to back this up. Rewarded video ads are actually helping the publishers increase their app engagement. In fact, user sessions increased by 34% after engaging with a rewarded video ad. Secondly, on retention, we're seeing users stay longer in apps after they engage with rewarded ads. In our research, we saw 30-day retentions increase three to five times.
Finally, regarding in-app conversions: users who engage with rewarded ads are actually 4.5 times more likely to make an in-app purchase. If you think back on advertising and publishers, usually, publishers had to balance this user experience and try to make sure that ads don't disrupt their users. Here, what we are seeing is rewarded video ads are actually good for the publishers. They're good for the users and really good for the publishers.
Let's talk about benefits to the advertisers. We're seeing rewarded video ads benefit advertisers in a variety of ways, because the model itself is opt-in, where the user is choosing to engage with an ad in a brand-safe environment. What I mean by that is we see very high viewability and completion rates. This, again, is extremely novel in the industry and extremely crucial for brand advertisers.
Here’s some data to back it up. 98% of our rewarded video ads are actually verified human and viewable. We see 4% click-through rates. We see about 85% video completion rates. Again, mind you, the industry averages are far lower. Our advertisers are happy when they see anything from a ten percent, fifteen percent, twenty percent video completion rate. Lastly, audible and fully on-screen on completion - two times the industry standard. Again, it’s an amazing environment for advertisers, and an amazing environment for users and publishers.
Let's talk a bit about current innovations. We talked about the history of rewarded advertising. We spoke about why it's really good, and we concluded that rewarded video advertising is really where a lot of innovation is happening in the industry today. The first part where innovation is really happening in rewarded video is in creative. We're doing a lot of this, and we're leading the charge at Tapjoy.
We believe that videos aren't simply sit back and watch a video. We believe that as we add more interactivity in the video as well as end cards (things that come after a video completes and where you can engage the user) the more interactive we make it for a user, the more engaged the users are. We have a variety of products coming around in interactive video.
Playables: playables is another concept that takes this interaction aspect and applies it very specifically to the rewarded video model, the idea being that the user is allowed to engage with the content of the ad itself. So if the ad is a game, the user would literally play a mini game for 30 seconds. If the ad is a brand ad, say, for example, Hulu, the user would actually interact in a mini mock game, to be able to understand the product itself. This allows for significant improvements in all the metrics that we talked about as well as user delight.
Finally, personalization. there's a lot of innovation in the industry, and specifically at Tapjoy, where personalized advertising, or advertising that is really based on and tailor-made for the user who's watching it is key. With this, I'm going to hand it over to Joli.
Joli Barretta: Today I'll be speaking about how Adjust can complement your advertising efforts. Pratik has done an awesome job of giving us a really solid understanding of what reward advertising is and how it's come to be. Of course, that's only half the battle, because once you have your campaign up and running, it's time to evaluate each channel and measure performance across publishers and within your entire advertising landscape.
Adjust is designed to help you quickly identify your most influential creatives and also weed out some of the material that isn't working as well for you. One of the ways that we do this is with our three sub-levels of attribution data. These sub-levels are details unique to your user's engagement that you leverage throughout the lifetime of your campaign. All Adjust parameters are fully customizable. This means that you can structure your tracker URLs to your preference and set creative wherever makes sense for your analysis.
No matter where you place creative though, we always advise the creative level to really outline the type of creative you're running. Some things that you may want to consider - but are definitely not limited to - include video run length, content language, orientation (whether you set up your ads portrait or landscape) and the focus of your content. If you're executing on some of the findings from some of these Tapjoy reports, maybe you want to see how that hilarious copy is doing. Of course, there’s always the age profile and demographic of your users as well.
Once Adjust begins reporting traffic from your campaigns, you can easily assess creative performance within our dashboard. Here, you can separate your creatives and evaluate performance across all demographics, regions, and even by video length. You can also analyze conversion metrics across engagement types, so end card clicks versus ad impressions. From there, you can even use our line graph visualizer to isolate specific creative types and review KPI numbers by their daily performance. I think that most marketers would agree that it seems minute details that provide invaluable insight into managing an effective mobile ad campaign and turning those ad engagements into actual conversion milestones.
I just spoke to this idea of assessing your users from their engagement conditions. The best way to do this in Adjust is with Cohorts. As most of you know, cohorts are groups of users that have installed within a specific time frame. What's great about cohorts at Adjust is that they're a really effective way to assess marketing initiatives on a very granular level. Since you have users that have installed at a similar time, as initiated by the same creative, even from the same publisher, you're able to make these apples to apple comparisons about user behavior, and while it might be that Publisher A has a higher conversion rate from engagement to install, you might notice Publisher B that has a lower conversion rate, but a higher percentage of in-app purchases.
When you're looking at this kind of data, you can draw a couple of conclusions. One, your creative is performing well, right? You're seeing users react and convert from your ad. But two, your traffic from Publisher B is actually move valuable. From there, you may work with your network to increase volume on Publisher B. Then once you have these types of insights, you can actually extract these users by their advertising IDs or their push notification token within the Adjust Audience Builder. From there, you can choose to re-engage users that have yet to make a purchase or users that you'd even like to see purchase again.
I think that the more you use Adjust, the more apparent it becomes that we're really working towards building a platform that doesn't just deliver valuable data, but also empowers you to evaluate your campaigns. You do this by delivering ads that are targeted with the type of calculated specificity that's only been made possible with mobile ad tracking. From here, I'm going to pass it back over to Pratik so that we can talk more specifically about how our platforms are collectively innovating for your optimization needs.
PS: Thanks Joli, that was a perfect description of how Tapjoy and Adjust are partnering on creative, really bringing on all sort of innovations on creative, and then being able to measure them. We see the same partnership going in optimization as well. Our advertisers are really now moving beyond asking for clicks or even installs. What really works for advertisers are valuable users, and performance advertising becomes more and more mainstream. As brands start focusing and honing in on performance as well, it's interesting that the optimizations that can come through are things like ‘hey, let's get a user who has made a purchase, or, secondly, revalue users who complete a free trial’.
We hear a lot of our advisers coming to us and saying, ‘please get us quality users who will subscribe for our service, and we will pay $25 for that user’, because again, that is a qualified lead, right? Levels in a game, this is a very fairly use case as well, where as users go deeper in games, the more valuable they are for advertisers. We have a variety of products which help the advertisers optimize for getting users who complete, say, level five, and lastly, with creating an account.
All in, it's an interesting trend where advertisers, both brands and games, are starting to optimize on their downstream funnel, and as they optimize on their downstream funnel, Tapjoy is innovating on products as well as in data science to be able to get quality users at scale who performed all these actions for our advertisers. Of course, none of this is possible, again, without tight measurement and a great feedback loop. This is where Tapjoy and Adjust partner on the feedback loop, especially in optimization.
JB: Right, and so if you're already an Adjust client tracking with Tapjoy, then you're probably familiar with our in-dashboard postback module, but for anyone that hasn't worked with us before, I do want to mention that this is our seamless postback integration, and once you activate the module with your app ID, we'll automatically send Tapjoy all of your Adjust track traffic, so you can better optimize your entire user set, rather than just the traffic attributed to Tapjoy. From there, they can even build look-alike audiences for future campaigns. We're also able to postback event data, so if you're working with an in-app event-based pricing model, then we can automatically forward that event data to Tapjoy as well.
In addition to this, we have released some other product tools and features that will enhance your ability to better optimize your budget. One of these happens to be the Fraud Prevention Suite. Just a little context if you're not already familiar with this tool: the Fraud Prevention Suite consists of several mechanisms that improve the integrity of your data, so that you can effectively allocate your ad spend and run campaigns legitimate publishers and real-life users, which is always a good thing.
Most recently, we launched the Adjust Audience Builder, and this gives you exclusive access to your attributed users and the ability to create lists based on specific criteria like the kind of install, the events they triggered, and the total amount of money they spent. What's great about this is that not only do you compile these lists based on your own criteria, but you kind of increase your privacy since you can submit these lists to your network partners without exposing any of the user details. If you'd like any additional information about these features, feel free to shoot us a question or send us an email at email@example.com, and we can follow up that way too.
In conclusion, we’ve just got a few more bullet points for you guys today, as far as Adjust and the evolution of measurements in mobile is concerned. As we've been talking about, mobile has moved really fast and Adjust is keeping up with it right along the way. By now, everybody knows that we're an attribution provider with sound technology and a strict privacy compliance, but we've also made great strides in developing an extremely comprehensive mobile measurement tool.
Regarding attribution, not only can you measure install attribution based on engagement type, so of your clicks and your installs, but you can also customize the amount of time that engagements are eligible for attribution. This can be done all the way down to that third sub-level of data (which is the adgroup level) which is normally where we see publisher information. You also have the ability to deactivate fingerprinting attribution. This ensures that you are only attributing users via device ID match.
Beyond attribution, we support all in-app event tracking, and as discussed earlier, tying in a cement activity to the source of install can be critical for deciding how you engage with your new or your existing users. Then if you have even more aggravated event types, it takes a little more processing, we support server-side event tracking as well. Finally, when we're looking to expand the scope of our in-app revenue tracking you, you can get a better understanding of the total revenue generated from your app, and that would be not just your in-app purchases but as well as any of the ads that you publish. This is actually a topic that we hope to cover with Tapjoy in the future, so stay tuned for that.
PS: Thank you, Joli. On Tapjoy's side, we continue to innovate on improving mobile monetization and marketing products for both our publishers as well as advertisers. We have a variety of innovative products, which are creative suites, already in terms of interactive end cards and a variety of new things coming up of the order of playables, vertical video, and a few more things. On the optimization side, we spoke about how improving the downstream funnel and getting advertisers valuable users is where a lot of our innovation on data science is very, very focused. That continues to be a great offering for our advertisers.
Lastly, on programmatic - we have heard a lot of our brand advertisers saying that they want to work with us purely on programmatic, and we opened that channel up last year, where we allow any brand advertiser who comes through either an agency or directly to a DSP to be able to advertise on Tapjoy's rewarded video and see all the benefits that we've been talking about - high completion rates, high viewability rates. All in all, at Tapjoy, we're really excited about all the innovation that's coming up both for our brand advertisers, our performance analyzers, and all the innovation and revenue that's coming for our rewarded video publishers.