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

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INTRODUCTION

Considering adding rewarded video ads to your monetization strategy? Look no further, this guide breaks down everything you need to know to add rewarded video ads if you are a mobile app developer, desktop app provider, website publisher, or even looking for a wifi monetization partner.

Dive in to learn more about how rewarded video works, the best practices for maximizing effectiveness, and a wealth of examples to give you ideas for how to work rewarded video ads into your monetization strategy.

table of
contents

Rewarded Video Ad Basics

chapter 1

What are Rewarded Video Ads?

Rewarded video ads give 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 based on custom event triggers you define.

 

How do Rewarded Video Ads Work?

Here’s the process in four simple steps:

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

It's that simple.

From a technical standpoint, this is typically achieved by the passing of event triggers between an ad monetization platform and your website or app. Setting it up is quick and easy.

Revenue and Earning Potential

chapter 2

Like any other ad unit, you can expect your revenue from rewarded video ads to vary based on your audience. Many factors go into determining what rewarded video ads are capable of earning for you, including:

  • Audience size: Either your total page views as a website publisher or your daily active users as an application will have a major impact on your average CPM.
  • Geography: Like with any ad unit, the geographic location of your audience has a huge impact on your average CPM for rewarded video ads.
  • Device: The device your audience is using will also have a pretty strong impact. Rewarded video for apps has been around for quite some time, so average CPMs for mobile devices are relatively stable. For the web, many SSPs are just beginning to recognize rewarded video ads as premium inventory, and CPMs will shift as the industry starts to standardize around it.
  • Technology: Even within categories of devices, the tech used will influence CPMs. For mobile devices, iOS tends to drive higher CPMs than Android. For the web, different browsers will drive different CPMs. And for games, different formats (e.g. console, PC, etc.) will all drive different CPMs.
  • Audience data: Any information you have on the interests, behaviors, and make-up of your audience can help advertisers pinpoint the type of users they want to reach, all of which can help you command higher CPMs for your rewarded video ad units.

While each publisher should expect their potential rewarded video ad revenue to be unique to them, we have gathered some statistics to help you estimate where your revenue might fall.

In general, you can expect rewarded video ads to generate 4x the CPMs than traditional video ads deliver or more. So if you are already doing video advertising, you can expect rewarded video ads to command at least 4x higher CPMs.

How to Use Rewarded Video Ads

chapter 3

The hardest part about incorporating rewarded video ads into your website or application is knowing where to use them most effectively. Games have a natural built-in reward system, making it easy to incorporate rewarded video ads, which is why the practice is so mature in the game monetization space.

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But, you don't have to be a game or app developer to take advantage of rewarded video ads. There are tons of strategies you can incorporate into your website or app, no matter your vertical. The key is finding the things you provide that are of the highest value to your user.

The list below is by no means an exhaustive breakdown of every possible way to use rewarded video. That list would be endless. However, the easiest way to generate ideas is often to look at examples of how it is done and then see how similar experiences might be possible on your website or app.

Rewarded Video Ads for Apps

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Rewarded video has been around for a long time in the app space. As a result, many of the demand partners that work with app demand have a wealth of experience in monetizing that demand. Advertisers often look specifically for rewarded ad inventory when looking to reach in-app audiences, and will often pay top dollar to access it.

Most app monetization SDKs will have rewarded video built into their existing SDK, and there are even a few standalone rewarded video SDKs as well. However, this simply becomes another SDK integration to manage, and most app publishers find their lives are simplified with a single SDK that incorporates many demand sources.

Some examples of rewarded video ad strategies used in-app include:

  • Replacement for in-app purchases: With in-app purchases already on the lower end of conversion, and currently on the decline, many app developers are electing to replace in-app purchases with rewarded video ads. Simply ask a user to watch a rewarded video ad in return for the item they would have purchased in-app.
  • In-game rewards: As many apps are themselves games, the many examples of in-game rewarded video ads broken out in the section below are often applicable.
  • Freemium feature access: Freemium apps often employ rewarded video ads as a way to let users test out premium features. You can simply gate temporary access to a freemium feature in return for watching a rewarded video ad. 

Premium content access: For apps that are subscription-based, you can follow a similar model. You may give users temporary, or one-time access to subscription content in return for watching a rewarded video ad. This helps expose users to the benefits of subscription and can even help increase total subscriptions.

Rewarded Video Ads for Websites

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While rewarded video ads have long been a mainstay in the app advertising space, they are relatively new for websites. As such, many demand sources that provide ads to fill publisher inventory are not always prepared to offer them.

Advertisers know the power of rewarded video ads and are willing to pay a premium to access them. However, not many ad networks have offered rewarded video ads for web in the past, thus creating a chasm between supply and demand that must be bridged in order for publishers to reap the rewards of rewarded video for web.

In the past, any kind of rewarded video ads for websites had to be supported by a direct sales team and custom-built by that website. Playwire has been leading the charge in making programmatic work for web rewarded video, working with SSPs and other ad networks to create premium inventory categories to support rewarded video for websites.

Learn more about this unique ad unit in the below interview with our SVP of Product, Noah Forster.

 

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Take a look at some of the following sections for ideas on how to work rewarded video ads into your website monetization strategy:
  • Game Monetization with Rewarded Video Ads
  • Mixing Subscription and Ad Revenue Models with Rewarded Video Ads
  • Using Rewarded Video Ads to Gate Access

Wifi Monetization with Rewarded Video Ads

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Another common use case for rewarded video ads is for wifi monetization. Hotels, airports, and other establishments often want to offer wifi for customers, but find a way to effectively monetize it.

There are two primary models for wifi monetization: charge for wifi access or wifi advertising. Wifi advertising typically involves having guests watch a rewarded video ad before they are able to connect to the wifi network. 

Going the wifi advertising route often creates the best experience for users. The establishment is able to offer wifi access for free, but still find a way to monetize free wifi access, and guests don't have to pay in order to reach a service they want.

This is typically achieved through the use of a captive portal. When a user attempts to connect to the wifi network, the captive portal will pop up, the user will be prompted to watch a video in return for wifi access, the rewarded video ad will be served in the captive portal, and only once the video has completed will the user be able to continue on to wifi access.

Software Monetization with Rewarded Video Ads

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Desktop apps have long struggled to monetize with ads. Most solutions are built around monetizing websites. Nearly all technical solutions rely on domain names and cookies, things that aren't available in the desktop app ecosystem.

Additionally, most demand sources are weary to work with desktop apps because fraud is so hard to monitor in the environment. Add it all up, and most software applications will struggle to find a way to monetize programmatically at all, much less be able to take advantage of sophisticated ad units like rewarded video ads.

At Playwire, we've built a solution that allows desktop app publishers to confidently monetize their software applications with both programmatic and direct demand. This includes software monetization through rewarded video ads.

Take a look at some of the following sections for ideas on how to work rewarded video ads into your software monetization strategy:

Game Monetization with Rewarded Video Ads

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Games have long been monetizing with rewarded video ads, so the practice is relatively mature in this vertical.

Some ideas for game monetization with rewarded video ads include:

  • Offering the ability to continue a game when lives have run out or a user "dies"
  • Offering the user the opportunity to get extra in-game currency or rewards (e.g. gems, lives, weapons, health, etc.)
  • Offering access to premium experiences
  • Switching between levels

Using Rewarded Video Ads to Gate Access

Another common use case for rewarded video ads is for access to premium content or features. If you have something of value to your user, that you would normally charge for or request something in exchange for, you have a potential rewarded video ad slot waiting for you.

 

Rewards and Sweepstakes

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Rewards and sweepstakes sites are a great example. If you offer contests or allow people to enter to win prizes, gating entry to that contest with a rewarded video ad is a great option.

Most people are happy to watch a short 15 or 30-second ad in exchange for the potential to win something big.

 

Premium Content

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If you have "members only" content or premium tools or resources, this is another great potential ad placement for a rewarded video. Offering one-time access to a resource like this, in exchange for watching a video advertisement is nearly always a trade-off the user is happy to accept (and they'll thank you for the opportunity to access the resource for free).

 

Experience Improvements

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Another great idea is offering an improved user experience in exchange for the user watching a rewarded video ad. For instance, some games might offer a full-screen gaming experience as the value-add behind a rewarded video ad.

A very useful model, though somewhat counter-intuitive at first, is offering an ad-free experience to users in return for watching one rewarded video ad. Essentially, the rest of their time browsing your site or using your app will be free of other ads (like display ads) so long as they watch one video ad at the outset of their experience.

 

Freemium Revenue Models and Rewarded Video Ads

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You can easily allow temporary access to a freemium feature with a rewarded video ad. This type of architecture allows the user to test the feature before having to pay for it and start to see the value of that feature. This often has the effect of increasing the number of users who ultimately shift to the premium, or paid version, of an app in addition to driving revenue from the rewarded video ads they might watch in the process.

Mixing Subscription and Ad Revenue Models with Rewarded Video Ads

Many subscription-based sites haven't considered the addition of advertising because it hasn't been a part of the strategy thus far. But rewarded video ads offer a seamless and lucrative, way to combine ad revenue and subscription revenue models for publishers.

You can simply incentivize a visitor to watch a short video advertisement or two in order to access the gated article or content on a one-time basis. 

Because rewarded video ad slots are considered premium inventory, advertisers will pay handsomely to fill these slots. And, in the meantime, you can monetize visitors that you'd otherwise have turned away because they aren't quite ready for a full subscription.

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Make your subscription monetization model even more effective by mixing in rewarded video ads. Often, publishers find that a mixed revenue model truly provides the best of both worlds: a great user experience for both those that are and are not ready for subscription and more top-line revenue.

Learn more about adding rewarded video ads to your paywall subscription site or app with rewarded video.

How to Get Started with Rewarded Video Ads

chapter 4

Rewarded video ads can be incredibly lucrative, but injecting them into your user experience is as much of an art as it is a science. When adding rewarded video ads into your monetization strategy, follow these steps first:

  1. Determine what you offer users that are most valuable: Understanding which features, content, or sections of your site that offer real value to users is the most important step in the process.
  2. Pick one item to test on: Select one item of value (or one category of content) and start small. Add a rewarded video ad as a gate to entry for that particular item.
  3. Test, test, test: Make sure to exhaustively test your unit to ensure that the user experience is perfect.
  4. Watch the results: Let the test run for a couple of weeks and see how users are interacting with your rewarded video ad. Is the reward large enough to drive conversion? What is the conversion rate?
  5. Iterate: Test variations of your ad based on the results. If your conversion rate is low, you can test increasing the value of the reward or shortening the length of your ad. If your conversion rate is very high, you can test increasing the length of the video to see if you can get more from each conversion.
  6. Expand: Once you feel confident on your first test, you can expand your strategy to other user experience inflection points that you identified in step 1.

Rewarded Video Ads Best Practices

chapter 5

There are some key best practices that are useful to know as you are first working rewarded video ads into your user experience that will help ensure success on your first go.

 

1. Make The Reward Worthwhile

The most important thing you can do is ensure that the reward you offer users is of enough value to them to get them to say “yes” to watching a video. The payout on the other side of the rewarded video ad must be valuable enough for the user to agree to watch the ad or your strategy is dead in the water.

 

2. Make the Experience Clear and Straightforward

Make sure users are fully aware of everything that is happening as it is happening. You don’t want frustrated users clicking away before completing the rewarded video ad, otherwise, you won't collect the high CPMs you’re looking for.

There are a few things that you can do to help with this:

  • Clearly articulate the expected reward to the user: Make sure on the screen that allows the user the option to watch the video, you clearly articulate what they’ll get in return. In the example below, you’ll see that it shows the user what they’ll get (the chance to play again) with button text that articulates that they’ll have to watch a video to continue.

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  • Take over the full screen when displaying the video ad: Make sure all of the user’s attention is on the ad, and that they can’t click away before completing the video. In this example, you can see the screen is fully grayed out behind the video player and the user cannot click away from the experience.

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  • Continuous messaging: You may even consider adding additional text that accompanies the video to remind the user that they’ll get their reward at the end of the video, like in this example.

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3. Test Different Lengths

You have endless options for the length of ads you can run in a rewarded video ad slot. Choosing which to use should be a matter of testing. 

We’d recommend starting out with a single 30-second ad if you are introducing rewarded video for the first time. From there, you can see how your audience responds and then test longer lengths to see how it affects behavior.

Some strategic options you can test once you’ve successfully gotten a baseline to include:

  • Running two 30-second ads
  • Running a single 60-second ad
  • Running a full-length 2.5-minute ad

Essentially, the sky's the limit. You can test any combination of lengths. The key is gradually increasing and seeing how your users respond before going too crazy. You’ll also want to weigh the value of the reward in your decision. The more valuable the reward, the longer you can likely push the total length of ads.

 

4. Make Sure You Can Employ Custom Triggers

In choosing your solution for serving rewarded video ads, you’ll want to ensure that you are getting a true white-label solution where you can completely customize your event triggers. Additionally, you’ll benefit from having a technology platform that allows you to track behaviors (sometimes called “listeners”) during your audience’s engagement with the ad.

 

5. Use House Ads for Backfill

As with any ad unit, not every single rewarded video ad impression will be able to fill, so you’ll want to make sure you have a backfill option set up. 

We recommend using house ads as backfill, which allows you to use the high degree of attention you’ll have to promote something of your own rather than devaluing the ad unit by backfilling with low CPM inventory. Make sure the solution you choose allows you to build and serve custom house ads as backfill.

Rewarded Video Ads Examples

chapter 6

There are plenty of great mock-ups of examples shown in the "How to Use Rewarded Video Ads" section, but here are a few more real-life examples of the ad unit in action to give you more brainstorming opportunities:

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Rewarded Video Ad Networks

chapter 7

When looking for the best-rewarded video ad networks to serve your needs, you have to strongly consider the technology you are looking to monetize. Mobile apps, desktop apps, and websites are all different animals, so finding a rewarded video ad network that works with the platform you are on is very important.

Spoiler alert: only one rewarded ad network serves rewarded video ads across all devices, and that’s Playwire. If that doesn’t qualify us to contend for the title of “best-rewarded video ad network”, I don’t know what does. 

 

Mobile Apps

Because rewarded video ads have been around the mobile space for quite some time, most mobile ad monetization solutions will offer the technical support required to offer rewarded video ads. AdMob, app mediation partners, and in-app header bidding solutions typically all offer rewarded video ads as an option.

Where you will want to focus your research will be on the quality of demand that the provider has to fill your rewarded video ad slots. This is where you want to focus on the competition that in-app header bidding solutions offer as well as the type of demand you’ll be getting (e.g. CPA vs. CPM demand).

 

Desktop Apps

Getting access to any programmatic demand on desktop apps has been difficult historically. Playwire and Rise have historically been the only options for software application monetization that includes rewarded video ads.

Like in the mobile app space, your key consideration when choosing a partner should be the demand sources available, the level of competition they'll generate for your ad inventory, and the infusion of direct sales, all of which will significantly affect your total ad revenue.

 

Websites

Today, Playwire is one of the only website monetization solutions that offer rewarded video for the web. It has not traditionally been offered in this space, and as such most of the SSPs and ad exchanges aren't necessarily built to fill that inventory. In fact, Playwire's Web Rewarded Video unit is so innovative that we are actually working directly with supply-side platforms (SSPs) to drive correct CPMs for rewarded video ads by having them categorized as premium inventory. Having a partner that has the relationships in place to achieve this is incredibly important for driving maximum revenue from web-rewarded video ads.

Rewarded Video Ad Units vs. Other Ad Units

chapter 8

A common question that comes up when app developers and website publishers are looking to incorporate rewarded video ad units into their strategy is how they compare to other ad units. 

If you are adding rewarded video for the first time, you may be deciding if you should replace other ad units with a rewarded video ad unit or how you might be wondering how to strategically approach your ad unit mix.

 

Interstitial Ads vs. Rewarded Video Ads

The line between interstitial ads and rewarded video ads can sometimes be blurred. Rewarded video ads are themselves a form of interstitial ads. Because rewarded video ads take over the entire screen between user actions, they are technically also interstitial ads.

The key difference is that typical interstitial ads offer nothing in return to the user for the completion of a video. So, if you have something of value to offer the user, you may choose to substitute a rewarded video ad where you have an interstitial today. 

In many cases, you are best off using interstitials where you are transitioning between stages or screens, and using rewarded video ads when you have something of value to offer the user (like an extra life, or access to content they wouldn't otherwise be able to see).

 

Standard Video Ads vs. Rewarded Video Ads

Standard video ads have an important place in your ad monetization strategy just as rewarded video ads do. Standard video ads are meant to play while the user is engaging with other content on the page. 

Rewarded video ads, by contrast, are served only when a user has explicitly chosen to watch them, and they occupy the entire screen, ensuring that the user's full attention is focused on them. This is why they typically command at least 4x higher CPMs than standard video ads.

In general, standard video ads are useful for volume (you can show many more of them than rewarded video ads), and rewarded video ads are useful for strategic moments in your user experience that allow for high revenue.

Playwire: Your Partner for Rewarded Video Ads

Who doesn't love it when everyone wins? With our rewarded video ads, you get a win for the publisher, advertiser, and user. The result is higher CPMs and more ad revenue for you.

If you want to start taking advantage of premium CPMs, let us know today! Whether you would like to learn more about Playwire's rewarded video ad unit and other offerings or you're ready to set rewarded video up on your site or app today, contact us online to get started.

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