Key Points

  • The freemium revenue model involves offering a basic version of a product for free, with the option to access a premium version for a paid fee.
  • Rewarded video ads can be added to freemium apps in order to boost revenue, provide users with a free trial to test out paid features, and enhance the user experience.
  • Playwire's rewarded video ad service provides access to all the benefits of rewarded video and other revenue-boosting features.

Any app or web developer worth their salt knows that making money off of a freemium app or web-based service can be tough. You want to offer a free version of your product, but you also need to find ways to generate revenue. 

One way to do this is to integrate rewarded video ads into your freemium business model. Traditionally, rewarded video ads have been used as commercials that users can choose to watch in exchange for in-game currency or other rewards. 

Only recently have freemium apps or services started incorporating these innovative ad units as a way to increase revenue. Not only do they provide a stream of revenue, but they can also help to keep users engaged by offering them a way to earn rewards.

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Web Rewarded Video Ads Pillar

Rewarded Video Ads: The Complete Guide to Using Rewarded Video on Web, App, and More

What is a Freemium Revenue Model?

A freemium revenue model is a business model in which a brand offers a basic product or service for free, with the option to upgrade to a premium version for a paid fee, hence the combination of the words "free" and "premium." 

This pricing model has become increasingly popular recently as companies look for ways to attract new customers while generating revenue. There are a few different ways to implement a freemium model, but the most common is to offer a basic, free plan, with the option to upgrade to a paid plan for additional features or services. 

For example, many online video streaming services offer a basic level of service for free with the option to upgrade to a premium plan for HD quality or ad-free viewing. 

Many desktop and mobile apps also use this type of freemium pricing model. While the freemium model can effectively attract new customers, it can be tricky to structure the free and paid plans to avoid cannibalizing premium product sales.

Where Rewarded Video Ads Fit Into Freemium Apps & Websites

Rewarded video ads can be seamlessly added to a freemium revenue model. Wherever there's a touch point within your app where users are encouraged to sign up for the paid version, you can offer a rewarded video ad that will unlock some of those premium features. 

You can either offer full access for a limited time, or limited access long-term. How you do it is up to you, and the potential for increased revenue is significant.

For publishers, rewarded video ads offer a great way to monetize their products in addition to their existing freemium model. For users, they provide an easy way to get their hands on in-game items, premium features, or other rewards. 

Just consider a few factors before incorporating rewarded video ads into your app. For one thing, you need to make sure that the ads are worth the effort. Make the value provided in exchange for watching the ad worthwhile and you'll see great results.

You'll also want to make your message very clear that the user can unlock a premium feature for free by watching an ad. The messaging around the experience is incredibly important in driving conversion on the offer.

Benefits of Rewarded Video Ads

Now let's talk about what's in it for you. Here are the top benefits to consider.

Boost Revenue

Let's start with the dollar signs. On a fundamental level, rewarded video ads let you earn more from your freemium app or service. Now not only do you earn when a user pays for the premium version, but you also earn from advertisers whenever one of their ads is shown as a rewarded video. Diversifying the ways your app pays you is one of the savviest ways to monetize your creation.

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Rewarded Video Ads Resource Center

The Complete Rewarded Video Ads Resource Center

Let Users Test Features

When users consider the jump from a free to paid user, there's always the question of whether it will be worth the price. What if they pay for the premium app or service and find it's not all that much better than the free one? 

That's where rewarded video ads can be like a soothing blanket for those wary users. It takes away the risk, letting them try out those premium features, sort of like a free trial before they've paid a cent. Once they see how worthwhile they really are, they'll be more likely to fork over their cash to make it permanent.

Advertise Your Advertisers, Advertise Yourself

Rewarded video ads don't just advertise the brands who choose to appear within your app. By letting users sample your premium features after watching an ad, you're essentially being paid to advertise yourself. Show off what you can do while being paid by advertisers to show off what they can do. It's a brand awareness win-win.

Better User Experience

Research shows that users are onboard with rewarded ads. They actually prefer them over banner ads and many other advertising formats. By integrating them into your freemium revenue model, you're boosting your income without boosting user frustration at the same time.

Playwire: Rewarded Video Ads and Beyond

Whether part of a freemium revenue model or otherwise, rewarded video ads offer a win-win-win solution for publishers, users, and advertisers. The result? Higher CPMs and more revenue sources from a single app. 

If you're ready to make rewarded video ads or other key offerings part of your revenue plan, contact us online today to get started. 

You deserve someone as passionate about monetizing your product as you are. Contact Playwire today.

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