Rewarded Video Ads (2024)

Updated: July 17, 2024

Rewarded video ads are a popular way to boost app engagement and increase user retention. They’re also the most favored advertising format for gamers who want to make in-game progress. But along with improving gamers’ in-app experiences, rewarded video ads are powerful for advertisers and publishers. So they’re a win-win-win option for all.

If you’re a developer, publisher, or advertiser, this comprehensive review of rewarded video ads is for you. With the benefits of better retention and engagement on offer, you’ll want to understand how this format works before considering how it could benefit you and your campaigns. Plus, finish up by reviewing our comprehensive list of dynamic companies that you could approach for support in this area.

What is rewarded video?

Rewarded video ads are a type of incentivized advertising that rewards users for watching a promotional video. Rewards can include virtual currency, in-app discounts, extra lives, or the chance to unlock new gaming levels. And, since 50% of gamers prefer rewarded video ads to paid and freemium mobile ads, they remain a popular format for mobile video. This is likely because rewards help users to make in-game progress and stay engaged on apps. And when they do it benefits advertisers and publishers with better engagement, retention, and higher revenues.

Mobile gamer’s preferences 2022

What are the benefits of rewarded video ads?

In-game rewarded video ads generate 40% of revenue. But there are plenty of other plusses that we’ve outlined below.

Users prefer the format

According to the IAB, over 80% of users prefer this advertising format. It’s also the most popular advertising format for game developers. To stand out from the competition, marketers should consider building user experience into their rewarded video strategy. This should start with a focus on audience identification. Then, appropriate targeting to ensure ads are well placed as part of the user experience.

Types of ads displayed in a game – By genre

Better engagement

Because users can only claim their rewards when they watch an entire ad until the end, advertisers can glean many benefits from rewarded video ads. Users have to watch entire ads to the end to get their rewards. For example, Sydney-based game developers Not Doppler maximized engagement through well-placed ‘double-rewards’ variable ads in their game – ‘Earn to Die 2’. And this led them to a 38% higher than average engagement rate after implementation.

Top Rewarded Video Ads

Higher retention

Rewarded video ads hold the power to increase mobile app retention by 4X, a study by IronSource revealed. Gamers who watched an FSI (Full-Screen Interstitial) rewarded ad in the first week of app use had a 53% retention rate, which is more than 300% over the average.

30-day retention rates on rewarded video ads

Increased conversion rates

Users who engage with rewarded video ads are 4X more likely to make an in-app purchase than those who don’t. And since the ad format is user-initiated, CTRs tend to be much higher too.

Focused UA (User Acquisition)

Users are more willing to watch videos in their entirety when they know they’ll get a reward for it. And since they’re a user-initiated format, video rewards are non-skippable. This offers significant value for advertisers looking to increase their visibility and gain new users.

Increased ad revenues

With a boost to In-App Purchases, higher usage, and better retention, rewarded video ads have the potential to boost revenues by over a third. For example, when Avid.ly introduced rewarded video ads into one of its games, users bought in-app items almost 20% more often. Plus, total revenues grew by 40%.

How can you increase rewarded video ads revenue?

By offering users a reward in return for watching a full-screen video ad, marketers create a value exchange that enables the monetizing of rewarded video ads. When users know the reward they’ll receive, for instance, in-app currency to progress with their game, they’ll need to agree to the terms outlined. After they’ve completed watching the video for the allotted time, they’ll need to then pick up their reward.

As you could imagine, because of the high number of clicks on this ad format, the average eCPM for this exchange is high. So, we’ve outlined more below:

How much do these types of ads pay?

In a recent report, IronSource suggested advertisers could expect eCPM rates to come in at somewhere between $10 to $50 per 1,000 impressions. They also suggest that, out of all the different types of mobile video ads, rewarded video ads offer the highest eCPMs.

The US holds the largest market share for rewarded video ads. To help illustrate current rates, we’ve split out some average eCPMs you could expect to pay across Android and iOS.

Average eCPMs on Android and iOS (US)

Android - eCPMs on Rewarded video adsiOS - Average eCPMs on Rewarded video ads
Average Android eCPM - $10.16Average iOS eCPM - $16.33
Facebook - $22.62Facebook - £32.32
AdMob - $13.46AdMob - $15.12
BidMachine - $13.57BidMachine - $13.57

Source: Udonis

Rewarded video ads best practices

Successful video ads tend to show some of the following attributes during high-performance campaigns:

  • Prioritize ad placement: Successful ads will enhance gameplay through strategic placement and avoid distracting users or interfering with their experience.
  • Reward gamers with in-game tips: Gamers want to find ways to progress through a game or enhance their experience. And great ads offer help or tips on gameplay which will encourage them to stay around for longer.
  • Mediate ads from third-party users: Users get put off if they see too many ads flying around. Successful marketers include ads from third parties but make sure they don’t interfere with gameplay or activity.
  • Offer users a surprise or unexpected rewards: Users who didn’t expect to get a chance to claim a reward during gameplay are more likely to come back and stay for longer.
  • Use advertising filters: As an integral part of their in-game playability, users also expect to receive relevant offers. So advertisers often use filters to understand their target audience before designing their rewards.

How can you run successful rewarded video ads?

So, it’s clear that including rewarded video ads in your app can bring you rewards. But how can you run a successful ad campaign that generates the results you want?

To give you more detail, we’ll explain how rewarded video ads work and show you the best ways to engage with them.

How do rewarded video ads work?

Users have to agree to any rules of engagement before they initiate rewarded video ads. But they must also agree to view the whole video without skipping. Once initiated, ads usually appear as unskippable, full-screen interstitials in both video ads and interactive or playable ad formats.

With this opt-in and user-friendly approach, users experience less intrusion than in other forms. For developers and advertisers, rewarded videos can apply to almost any kind of app. In general, they’re most often used in free-to-play mobile games with rewards appearing at strategic points in gameplay.

So, if you want to start showing rewarded video ads in your next campaign, consider the key points you should consider as part of your efforts:

Target your users

Advertisers should maximize the benefits of rewarded video ads by ensuring ads get in front of the right audiences. Rewarded video advertising companies can help with reviewing existing customer personas and then matching them with appropriate app developers.

Use rewarded video to complement IAP

Studies show that introducing rewarded video ads has little to no detrimental impact on IAPs in 70% of cases. As a result, many more games now use rewarded ads as a way to complement their IAPs. Rewards can also introduce premium features and encourage users to play for longer.

To increase sales further, consider offering discounts for in-app purchases as a reward in your videos.

Impact of rewarded ads on IAP

Integrate ads smoothly

Most rewarded videos will appear in games. So, advertisers and publishers need to work together to ensure a seamless experience for the users. Rewards need to be relevant and useful to gameplay but also appear at points that won’t intrude on players’ enjoyment and experience of the game.

For example, some good ad positions can include:

  • Daily Rewards Multipliers: App owners can increase retention by offering more incentives in return for watching several videos per day. These multiplier ads are often best placed at the start menu or at the end of the game.
  • Out of Lives Ads: Games in the casual category offer users a chance to buy extra lives when they need them. And when users get the opportunity to ‘watch another video for another life’, they see ads in a more positive light. In turn, this can lead to higher retention scores.
  • Out of Action/One More Try Ads: This is a good option if your app game isn’t based on the need for more lives. Ads should give players the chance to reset and try again without losing any progress made up to that point.
  • Booster Ads: App developers can gain higher engagement rates by placing ads during critical points of gameplay or during app interactions where they’re needed most.

Use static end cards

Advertisers tend to gain higher engagement rates when they add static end cards to video ads. Users get to see what’s on offer and URLs are clickable. Make sure any video formats support the use of static end cards.

What are the challenges of working with rewarded video ads?

Some areas to think about when running rewarded ads include the following:

Could be seen as inauthentic

Some skeptics see rewards ads as disingenuous. Often, they assume users are only engaging with them to get their prize and will ignore the ads. But studies suggest this isn’t the case and rewarded ads may even increase conversions. This may be because of the mutual agreement made between each party.

Restricted to in-app only

Rewarded ads are only available in apps. Marketers may have to consider the customer experience and user journey if they do want consistency with desktop users.

Why should you partner with rewarded video ads companies?

As you’ve seen in the guide so far, rewarded video ads have a long list of benefits that result in win-win-win scenarios for developers, advertisers, and users. So why would you need to engage with a rewarded video ad company then?

Whether you’re a publisher or advertiser, you’ll gain huge benefits by working with a company. Some of the more vital aspects you may want to look out for when reviewing our list of some of the best rewarded video ads companies include:

  • Broad expertise in the effective placement of rewarded video ads
  • Scalability, providing advertisers with appropriate access to developers and vice versa
  • Integration with in-app stores, boosting IAPs in the process
  • Audience targeting and segmenting strategies that gain appropriate engagement
  • Innovative ads designed to enhance creative execution
  • Higher retention and engagement levels
  • Increased revenues of between 20-40%

So, have a review of our complete list of rewarded video ad companies and discover for yourself how they could support your app marketing needs.

List of rewarded video ad networks

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