The Monetization Power of Rewarded Ads

The Monetization Power of Rewarded Ads

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You have just finished a challenging level of your favorite game and you want to move right on to the next, but instead, a very loud ad video starts to play, telling you to download the latest game.

I think we can all agree that forced ads are annoying and break the immersion into your favorite app. Instead of bombarding the user with video ads, creating a new, more diverse strategy and using rewarded ads instead can be an incredibly powerful and effective tool to monetize your app.

When creating a new app, developers need to consider the best form of monetization if they aim to earn money through the app while not putting off their existing user base.

Besides paid apps, developers have two popular options to choose from: in-app purchases or rewarded advertising. In this article, we will take a look at rewarded ads, how they work, what sets them apart from those annoying video ads, and all the pros and cons that come with using this form of app monetization.

What is Rewarded Advertising?

The key to making advertising as unobtrusive and fun as possible is to give users a choice, and rewarded advertising does exactly that. Instead of pushing an ad onto the user, they decide whether they want to interact with the ad or not. In exchange for doing so, the user receives a reward that can be used within the app. In the example of mobile games, rewarded ads can be used to earn extra lives, unlock accessories, or earn in-app currency, like coins or points. The focus is on the reward as well as the choice.

But how exactly does that work? If a user is running low on in-app credits or has used up all the lives in a mobile game, they are given the option to interact with a rewarded ad. If they choose to interact with it, they are given extra lives or credits in exchange, allowing them to keep playing or keep using the app without having to take a break.

Types of Rewarded Ad Formats

Not every rewarded ad is created equally and fits into every kind of app, which is why it is important to find out what works best for your app. These are the different types of rewarded advertising that app developers can work with:

Rewarded Video

Everyone is familiar with video ads – but usually, watching them is not optional, which is off-putting for many users. Instead of forcing video ads on a customer, a rewarded video gives the customer the choice to engage with the ad in exchange for an in-app reward, which makes it a much more pleasant experience than a forced ad. Depending on your app, this type of rewarded ad can be implemented in many different ways or places.

Offerwall

Offerwalls are another great type of opt-in rewarded advertising that is very popular within Android and iOS apps. It presents users not only with one but multiple choices: First, they can choose to interact with the offerwall in order to gain in-app rewards or not. If they decide to engage with the ad, they can choose between multiple options, like watching a video or filling out a survey in exchange for coins, points, or another form of in-app currency.

Playtime

Adjoe‘s Playtime offers another fantastic form of rewarded advertising that can help you monetize your app and create a fun and rewarding experience for users at the same time. Instead of watching videos or filling out surveys in exchange for in-app rewards, users can play hypercasual games. On top of gaining more coins, points, or extras, it provides an entertaining element to the app that customers will love to use.

How Much Power Do They Really Have?

Along with in-app purchases, rewarded advertising is the main app monetization strategy, with revenues of 3-5 billion USD. These numbers show just how effective rewarded ads can be if implemented correctly. A rewarded video can earn up to $15 for every 1000 views, the same as playable ads. Adjoe’s Playtime goes even further than that.

By incorporating hypercasual games as a form of rewarded advertising, you can make up to $750 for every 1000 views in an average US app. In comparison, a non-rewarded banner ad only brings in $0.50 for every 1000 views, making rewarded advertising much more lucrative for app developers.

What are the Pros & Cons of Rewarded Ads?

Pros of Rewarded Advertising

Increase Session Time

Being forced to pause a game because the users have run out of lives and must wait for them to be refilled is a session killer. By providing the option to earn more lives, coins, or points through rewarded advertising, app developers create a fantastic way of increasing session length and keeping users engaged for longer periods of time.

Improve User Experience

Especially with adjoe’s unique Playtime format, which offers a reward for playing hypercasual games, developers can create a fun and entertaining user experience. Playing hypercasual games can reduce stress and help pass the time, and because users are having fun, they are more likely to return to the app to repeat the experience.

Boost Revenue

As established earlier, rewarded ads have a revenue of 3-5 billion USD and this number is expected to increase in the coming years. Since rewarded ads are so much more profitable than simple banner ads, using them to boost your own revenue is the smartest choice when it comes to app monetization.

Use the Power of Choice

Don’t underestimate the power of choice! While users are often deterred and put off when bombarded with banners and video ads, allowing them to choose between interacting with the ad or leaving it improves the user experience – as does gaining a reward for their ad interaction.

Cons of Rewarded Advertising

Putting off Users

There is always a small percentage of users that will be deterred by advertising – whether it is rewarded or not. But by analysing your user base and finding the right type of rewarded advertising, this group of users can be kept as small as possible. When rewarded ads are placed correctly in an unobtrusive way and spot, the majority of users will choose to interact with them because of the promised reward and the entertainment they provide.

Conclusion

Rewarded advertising is a powerful tool for app monetization which can help you improve the user experience and boost your revenue at the same time. By choosing a fun, reward-based system and by giving users a choice, you are creating an effective and unobtrusive monetization strategy that can be incredibly successful when implemented correctly within your app.