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Complete a task. Get a reward. This is one of the most common exchanges in modern society. It’s the basic framework that convinces pretty much everyone to get up and go to work in the morning, but it also has applications in mobile advertising. 

You might not think of digital advertising as a task-and reward-based system, but that’s because you’re not thinking about rewarded video ads, also known as incentivized ads. These high-impact ads are a relatively new innovation in advertising technology, but they have been growing publishers’ revenues for a number of years now.

In this post, we dive into rewarded video ads, how it works and how it can boost your in-app ad revenue. To learn more, keep reading. 

Playwire builds specialized, impactful ad units (including rewarded video ads) that app publishers can’t find anywhere else. Contact us to find out how we can boost your revenue.

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How Rewarded Video Ads and Incentivized Ads Work

We pretty much covered how rewarded video ads work in the first two sentences of this blog post. Of course, there’s a little more nuance behind the task-reward system that publishers need to understand.

In a nutshell, rewarded video gives your app’s users a reward, or incentive, for spending time watching a full-screen video ad. This reward usually takes the form of a gift that is useful within the app rather than a tangible reward like cash or a branded item. Because the ad will be full screen, it needs to be interstitial. In other words, a rewarded ad unit will occupy the entire screen in between two phases of use within the app, such as between levels, before a game starts or a similar transition.

When 83% of consumers think ads are disruptive and more than 50% in multiple countries lump ads in with fake news, finding a way to encourage buy-in to an in-app ad is a game-changer. This is particularly important as ad blockers become more common every year. Rewarded video ads bypass these issues by engaging directly with users and getting them to opt in to viewing the ad.

Examples of Rewarded Video Ads

Now that we understand how these ads work, let’s take a look at some real-world examples of rewarded video in action:

  • In-game currency. If you have a mobile game that uses in-game currency to allow players to purchase items for use in the game, you’re positioned well to use an incentivized video ad. The idea is to ask users to watch an ad and reward them for doing so with a predetermined amount of in-game currency.
  • Extra lives. Even if in-game currency isn’t a part of your mobile game, you may still have an effective framework in which to host rewarded video. If your game deals in lives for players, a rewarded video could offer an extra life to viewers.
  • Retail discounts. Consumers will go to great lengths to get a good discount on a product or service. Having them watch a short video isn’t a lot to ask if you offer a discount in return.
  • Ad removal. Rewarded video and incentivized ads can work in conjunction with other in-app ad types. For example, if you run display ads or really any other kind of ad within your app, you can offer a rewarded video experience in which the reward is the removal of all non-rewarded ads for a specified period of time.

The vast majority of rewarded ads take place inside of apps, but it is possible to use this model in desktop environments.

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Boosting Ad Revenue with Rewarded Video Ads

We know what a rewarded video ad is, but what kind of benefit does a publishers see when investing in this format? It’s simple — these ads can boost your revenue by improving your cost per mille (CPM) rates. This occurs for two main reasons: higher video viewability and a higher video completion rate.

Video Viewability

A video ad’s viewability refers to the rate at which users saw the video and for how long they viewed it. A video ad is thought to be viewable if at least 50% of the video displays on a user’s screen for two seconds or more. Higher viewability is directly correlated with higher CPMs.

What’s more viewable than a full-screen video ad the user watches from beginning to end? Almost nothing. And that’s the benefit of incentivized video ads.

Video Completion Rate

Similar to video viewability, video completion rate is a key ad performance metric that has a direct effect on your revenue. The question is simple: how many viewers watched the entire video ad from beginning to end?

Advertisers want viewers to see their entire ads. That’s because they want to make a big impression on viewers and encourage more click-throughs, purchases and the like. This is why advertisers are willing to pay more for video inventory that’s likely to garner a higher video completion rate.

The problem? Most app users are waiting to smash that skip or fast forward button as soon as an ad appears. Again, rewarded video provides a solution. The user opts in to watch most of the ad, if not all of it. That drives video completion rates through the roof.

How to Get an Industry-Leading Rewarded Video Ad

A rewarded video ad is a key component of any effective in-app advertising strategy. The benefits are clear: you get better ad metrics, which leads to higher CPMs and a much easier time selling ad inventory in the future. What’s not to love?

The problem for most publishers, however, is creating a space in which effective rewarded video can be served to users. At Playwire, we’ve been creating sleek, sharp and shockingly effective rewarded video units for years. We can do it for you, too. All you have to do is keep making your app the best in its vertical — we’ll take care of the rewarded video and boosting your revenue.

Ready to work with us and make your app do more for your bottom line? We’re ready, too. Just contact us online to get started.

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