Key Points

  • Rewarded video ads are one of the most lucrative ad units publishers have available to them.
  • Rewarded video ads have primarily been used by app developers in the past but is also very useful for desktop apps and, for the first time, is available for web publishers as well.
  • Rewarded video ads can drive 4x higher CPMs than traditional video ads.

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 video 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

What is a Rewarded Video Ad?

Rewarded video gives your users a reward, or incentive, defined by you, for spending time watching a full-screen video ad. Users will be prompted with the choice to watch the ad to unlock content or reward. This unit is typically dynamically inserted on your site based on custom event triggers you define.

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.

Here's how they work:

  1. Step 1: A user on your site is offered a reward for watching a video ad.
  2. Step 2: The user clicks the associated button to accept that offer.
  3. Step 3: An overlay opens on top of the site content, and the video ad plays.
  4. Step 4: The video ad ends and returns the promised reward to the user.

Who Is Rewarded Video Good for?

Mobile Apps

Rewarded video has long been a part of the mobile advertising space.Mobile games have used the strategy for years, and most mobile ads SDK providers like mediation partners and in-app header bidding solutions offer support for rewarded video. Google AdMob even supports rewarded ads for apps.

Rewarded video is no longer just for use in games, it has value across many different categories of mobile apps. We've seen many app publishers getting more creative with their use of rewarded video. It is applicable in pretty much any situation where you can offer something of value for users in return for watching an ad.

Desktop Apps

Similar to the mobile app space, rewarded video ads have plenty of applicability in desktop apps. The problem for software app developers has really been finding sources of demand that are set up to work for desktop apps. Playwire has helped to solve that dilemma for desktop app publishers and have made programmatically-served rewarded video ads a possibility for desktop app publishers.

Websites

Rewarded video has not traditionally been available in web format... until recently. In fact, this ad unit is so new to the programmatic advertising scene for web publishers that Playwire is actually having to work directly with SSPs to truly categorize the inventory correctly. We are leading the charge, working to get rewarded video ad inventory classified as premium inventory so that it can continue to drive even higher CPMs for publishers.

HubSpot Video

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 or virtual currency. If you have a mobile game or gaming app that uses in-game currency to allow players to purchase items for use in the mobile game, you're positioned well to use an incentivized 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 a player.
  • 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 format 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.
  • Subscription or gated content. Offer one-time access to an article if a visitor is not ready for a full subscription or hasn't paid for premium features.
  • Special features and experiences. You can choose to offer custom, or more immersive experiences (like a full-screen version of a game) in return for watching a video ad.
  • Substitute for in-app purchases. Features you may typically have available as in-app purchases could be offered to users for free in return for watching a video ad to monetize those who don't want to make on-app purchases.
HubSpot Video

Ad placement for the vast majority of rewarded ads is inside of apps, but it is possible to use this model in desktop app and web environments.

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Web Rewarded Video Ads Pillar

Read the rewarded video ads guide.

Boosting Ad Revenue with Rewarded Video Ads

We know what rewarded, or incentivized video ads, are but what kind of benefit does a publishers see when investing in this ad 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, similar to what you might see with an interstitial ad.

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 ad format is more viewable than a full-screen video ad that holds user engagement 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 as to not interrupt their user experience. Again, incentivized video ads provides a solution. The user opts in to watch most of the ad, if not all of it, user engagement remains, and video completion rates are driven through the roof.

How to Get an Industry-Leading Rewarded Video Ad

Rewarded video advertising is a key component of any effective in-app advertising and monetization 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 advertising 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 incentivized video ads and boosting your ad revenue.

And we don't stop at just rewarded video ads, we offer plenty of other high impact ad units for all publisher types as well including payable ads, interstitial ads, standard banner ads, and native ads.

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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