Looking for a way to keep users engaged while boosting your app’s revenue? Rewarded Video Ads provide a solution to not only raise revenues but also maintain user loyalty by offering benefits in return. In this article, you will learn more about the benefits, challenges, and best tips to get started with rewarded video ads.
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What Is Rewarded Video Ads?
A rewarded video ad is a user-initiated ad format where a user can watch if they want to earn in-app incentives. These incentives could be bonus points, prizes, extended features, or free trials.
You must have seen this type of ad while playing games or using entertainment apps. Rewarded video ads can improve user experience by giving benefits instead of disrupting users’ activity like traditional video ads.
For example, if you lose a game level, you can choose to watch an ad for 10 seconds to earn extra lives. If you change your mind, you can close this ad halfway and return to your previous status in the app.
Rewarded Video Ads: Pros And Cons
Rewarded video ads have become a popular choice for advertisers since they can boost users’ engagement with rewards in return. If you are considering them for your strategy, let’s take a look at their benefits and drawbacks to decide!
Benefits of Rewarded Video Ads
1. Better Audience Targeting
Using rewarded video ads with interest-based targeting helps businesses target the right audience.
For example, if you’re selling kitchen products, you can place your ads in a cooking game to reach users who already love cooking. The players here are more inclined to watch ads about your products as these align with their interests.
Since users proactively choose to view it, they will appreciate the offer more, rather than see it as a random, irrelevant ad. By giving users the power to choose, advertisers can reach a more receptive audience who has a genuine interest in what’s being advertised.
2. Drive Long-Term Engagement
Users are more willing to click on and watch rewarded video ads compared to other ad formats because they will get real rewards in return. Plus, since games often have many levels, showing rewarded videos between levels can increase views and keep players engaged in the long run.
For example, in Next Games, up to 80% of users choose to watch rewarded video ads, showing that this method can be more interesting to players than direct in-app purchases.
3. Boost User Retention
Rewarded video ads are great for increasing user retention because people have to finish watching the whole video to earn benefits. In fact, according to ironSource, these ads show 3.5 to 5 times higher retention rates than the usual rate of around 30 days.
Plus, by giving players a free sample of premium content through rewards, they’re more likely to buy those benefits later on. Players who view rewarded ads are 4.5 times more likely to complete in-app purchases.
Drawbacks of Rewarded Video Ads
1. Lack of Genuine Interaction
Many users engage with ads just to get a reward, which means their interest isn’t always genuine. This can lead to lower-quality traffic and make them less valuable to advertisers.
Often, users who install an app just for a reward don’t stick around for long. They may either lose interest once the rewards stop or become overly focused on earning rewards rather than enjoying the app itself.
2. Limited Audience
Another drawback of rewarded video ads is that they only work well for a specific audience. Because they work best for apps with a gamified experience or platforms with premium content behind a paywall, users are mostly people who cannot pay to unlock exclusive features.
Because of this, apps without these gamification elements might struggle to attract users to rewarded ads, making this ad format less effective for them.
How Do Reward Video Ads Work?
Rewarded video ads operate through a simple yet effective process that engages users and offers them in-app rewards.
1. Game in Progress
It all starts while the user is playing a game. When the game reaches an appropriate moment, it sends a request to the ad network. At the same time, the advertisers will make a bit for a displaying slot in the app. The ad network then selects an ad with the highest bid to display.
This ensures that the most valuable ad is ready to be shown to the player.
2. Ad Display
Once the ad is loaded, a prompt will appear in the game. It will ask users if they want to watch the video ad in exchange for a reward or not.
If the user agrees, the ad begins to play. During playback, they can either watch the entire ad to earn the reward or choose to exit partway through.
If they decide to exit, they can simply resume the game without a reward, or they may be redirected to download the advertised app if they’re interested.
3. Completing the Ad
Users who watch the video to the end will receive their promised reward. The ad completion is then reported to the ad network.
After receiving the reward, the user is taken back to the game with their earned bonus, which encourages continued engagement and a more satisfying gameplay experience.
How to Set Up Rewarded Video Ads on Pangle?
Setting up Ads on Pangle, like Rewarded Video, may seem complex, but with the right guidance, it’s manageable. Here’s a step-by-step process to help you start and effectively integrate rewarded video ads into your app.
Prerequisite:
Create an entry for your app on Pangle. Once your app is added, you need to create a placement for rewarded video ads and generate a unique ad placement ID that you’ll use later to load and display ads.
- Create an application: [Application] -> [App] -> [Add App]
- Create an ad placement：[Application] -> [Ad Placements] -> [Add Ad Placement] -> [Rewarded Video Ads]
Step 1: Set Ad Parameters
After setting up the placement, customize the ad’s properties to match your app’s user experience.
Start by selecting the orientation of the video (vertical or horizontal) based on your app’s layout. Next, determine the reward item that users will receive for watching your ad, such as “coins”, or “extra lives”, and remember to enter the reward amount.
Finally, enable the reward delivery setting to validate each completed ad view through a third-party server. This ensures that only users who fully watch the ad receive rewards.
Step 2: Load a Rewarded Ad
Now it’s time to load the ad into your app. Use the load() method with the ad placement ID to load the rewarded video ad. This prepares the ad for display, ensuring it’s ready when the user chooses to view it.
Loading the ad also requires setting up a PAGRewardedRequest object to handle the ad-loading process and a PAGRewardedAdLoadListener to receive updates on whether the ad is successfully loaded or not.
Step 3: Display the Ad
Once the ad is loaded successfully, you can display it to users at an appropriate time. To show the ad, use the show() method of the PAGRewardedAd object. This method should be called in the main thread of the app to avoid any display issues.
How Much Can You Earn from Rewarded Video Ads?
Rewarded video ads often have a higher effective cost per mile (eCPM) than other ad types because they increase user interaction and click-through rates. In some cases, eCPM for rewarded videos can reach up to $100, depending on the game genres and user demographics.
According to Appodeal data, eCPM rates vary by platform, country, and device type:
- United States: iOS eCPM ranges from $15.85 to $16.30, while Android peaks at $13.34. These stable rates reflect a mature and competitive ad market.
- Canada: Android eCPM is about $5.51.
- United Kingdom: iOS eCPM has a slightly higher value, at around $17, while Android stands at $10.
- India: Android eCPM is about $1, while iOS eCPM is approximately $5.
Tips To Get Started with Rewarded Video Ad
Implementing rewarded video ads requires a clear plan and attention to detail. Follow these tips to ensure a smooth and successful launch from day one.
1. Test Different Lengths
If you run rewarded video ads for the first time, use a single 30-second ad to test your audience’s reaction. Once you get an initial response, you can use longer ads to see if it changes user behavior. There are some options like:
- Two 30-second ads
- A single 60-second ad
- A full 2.5-minute ad
You should experiment with different lengths gradually and see how users respond. Also, keep the reward’s value in mind. Users will have more tolerance for ads with more valuable rewards.
2. Ensure Proper Ads Placement
Positive user experience depends heavily on your ad placement.
First, think about what matters most to your users. For example, showing ads just before a key moment might frustrate players, but placing them between levels can help users progress further. When players run out of lives or currency, they may even find these ads helpful.
Also, you should place rewarded ads in the in-game store, on the home screen, or whenever users earn in-game items. For instance, if a user collects 50 coins, you can offer to double their coins if they watch a rewarded ad.
3. Surprise Users with Unexpected Rewards
Relevant rewards are important, but you can also use mystery rewards to make video ads more engaging. For example, after watching an ad, show multiple treasure chests and let users pick one to unlock a surprise.
If users get excited and want more rewards, guide them to watch the next ads to unlock more high-value prizes.
Rewarded Video Ads vs Interstitial Ads: Which Is Better?
People often weigh the differences between Interstitial Ads and Rewarded Ads when choosing how to monetize their apps. Each ad type has unique strengths, so the best choice depends on specific goals. Here’s a quick comparison to highlight the key features of both ad types:
| Aspect | Interstitial Ads | Rewarded Ads |
|---|---|---|
| Revenue | Generates immediate revenue thanks to high visibility. | Generates stable long-term revenue thanks to user-friendly characteristics. |
| Impression | Less effective in creating a lasting impact, potentially resulting in lower conversion rates. | More effective in creating a lasting impact by giving users rewards, leading to higher ad engagement and Return on Ad Spend (ROAS). |
| User Experience | Can disrupt gameplay if overused, resulting in poor user retention. | Enhance satisfaction as users can control their ad experience. |
| Usage range | Can fit in a wider range of app categories and platforms. | More tailored to gaming and similar interactive experiences. |
For businesses focused on retention and user satisfaction, rewarded ads are typically the better choice, whereas interstitial ads may be more effective for maximizing short-term revenue across a broader range of apps.
Wrap Up
Rewarded video ads are a powerful way to engage users by giving rewards in exchange for their watching time. With a user-friendly nature, rewarded video ads are the popular choice for raising app revenue and user retention. However, balancing rewards with ad frequency and relevance is essential to avoid disrupting the user experience.
Ready to enhance your ad strategy with rewarded videos? Apply these tips, experiment with formats, and keep tracking performance for the best results. For more insights on maximizing ad impact, subscribe to our blog and stay ahead in the ad game!
