Re-engaging app users via mobile rewarded ads can boost app retention by 4x

For many mobile app developers, boosting retention is a key strategy given that the cost of new user acquisition is just too high. But what does drive app users to continue to be motivated to use an app even months after they downloaded it?
Mobile advertising and monetisation platform Tapjoy planned to find out by looking at the behaviour of over 500 million app users worldwide across 10,000 apps during the first week after app install to discover the effect of rewarded ads during 30-day retention rates.
App users are picky. That shouldn’t come as a shock to most app marketers who are well aware that most players will download an app and never use it again. Indeed, Tapjoy revealed that as many as two-thirds of players never used an app again after downloading it.
Most users are still trialling apps when they download them. Retention then drops rather sharply to a mere 22% after a week and just 13% after a month. Only 6% of users will still engage with an app after two months.

Tapjoy’s findings show that rewarded adverts can be useful in boosting user retention from the very first day. Although many developers would shy away from implementing adverts that early on after download, engagement with just one ad during the first week boosted the chance of users hanging onto an app by 4x.
Those players who do engage in ads during that first week have a retention rate of at least 50% compared to just 13% for the benchmark.
Interestingly, rewarded video ads were found to boost app retention the most. Players who viewed just one video ad during the first week after download had a 53.2% retention rate during their first month. That’s 300% more than the average retention rate for the first month.
If players saw seven videos during their first week, retention rates rose to 71%.
Rewarded video ads have previously been shown to be great motivational tools by offering users something in return for their time.
App developers shouldn’t shy away from trialling various formats including in-app messages, video, push notifications and other formats.

Although slightly more outdated, Full Screen Interstitials were also found to boost user retention rates by 300% the average during the first month. Overall though, video impact was found to be greater after the first month. Sensible usage of interstitials is recommended.
Tapjoy also examined Offerwall performance. Offerwall is a Tapjoy product that lets app users click on an engagement link such as “Earn Free Currency” to seek out opportunities to earn game lives and currency in exchange for viewing ads. Players also get to choose which ads they view. It’s a non-disruptive experience that entirely hinges on the player’s own motivation to seek out rewarded advertising.

Ben Chen, SVP & GM, Developer Relations at Tapjoy, concludes:

“We’ve known all along that consumers love rewarded ads and that these ad types help improve the user experience. And yet even we underestimated how dramatically rewarded ads can increase retention rates. Rewarded ads provide users with a great introduction to an app’s virtual economy and its premium content, so it helps users engage with the app on a deeper level. The key lesson that developers should take from this report is just how important it is to present players with rewarded ads during their first week of using the app.”