Concerns behind ads having a negative impact on a users’ game experience are among the top deliberations that developers with a “user-first” mindset are faced with. And it’s understandable, app developers want to deliver a great experience to their users, one that’s authentic and engaging. However, with the right approaches, and optimizations, ads are capable of enhancing the users’ experience and ripple ad revenue into your game.
One of the leading ad formats (and one of the more scrutinized formats) is Rewarded Video (AKA Value-Exchange video). This ad format offers the user some kind of value in exchange for watching the video, such as access to the next level in the game, or a small amount of game currency. With the growing popularity of Rewarded Video (RV), we’ve seen an increase in myths created around the format, which we’d love to bust:
Myth – Rewarded Video ad will hurt in-app purchases
Busted – Rewarded Video can help boost In-App Purchases (IAP) spend
The benefits behind integrating RV into your game can go beyond the obvious of enhancing the game experience. According to the 2020 Mobile Games Advertising Report, when players were asked what ad formats most likely prompt them to buy something in-app, rewarded video was the strongest performer on 34% with playable ads coming in second place on 23%.
Based on a 2017 research by AdColony, Players who made in-app purchases in the past watch significantly more ads when given the opportunity than players who haven’t made IAP, from 4.5% of non-spenders viewing ads, to 13.1% of spenders viewing rewarded video ads – almost three times as many. This indicates paying players view ads as a value-add, rather than a replacement for their usual IAP.
Moreover, there was a significant impact of Rewarded Video ads on revenue: Throughout the study period, there was a 28% increase in overall gross revenue, and there was a 22.7% increase in per user revenues – from $3.65 per user before the addition of ads, to $4.48 per user after. Put simply, user-friendly ad experiences enhance revenues.
Reward users with something they will value in the game. This ad format gives many users who are not interested in in-app purchases access to a superior experience, which can give them a taste of the premium content and encourage them to make future purchases. IAPs and rewarded ads can serve different purposes but still keep engagement levels high for non-payers.
Myth – Rewarded Videos reduce user engagement
Busted – Users who engage with Rewarded Videos can increase session length and play for longer
Research has shown Rewarded Video drives 3-5X higher engagement than other ad formats. 74% of users would watch an ad in exchange for in-app rewards or currency.
Each video is about 30-45 seconds, which means every time a user needs a booster to continue playing, 30-45 extra seconds are added to their session length.
Rewarded Video can provide ROI-positive users. If integrated into the game with mindful consideration, up-to-date testing, and understanding user behavior within your core game loop. With Rewarded Video, users’ session lengths increase, and their engagement with your app increases. The inclusion of rewarded video not only improves the experience for users and exhibits a positive impact on retention. It also revealed that players who viewed ads had 12% more sessions per day and 28% longer session times than players who did not engage with ads.
Allowing users to opt-in is also positive for advertisers as it increases the quality of ad impressions and conversion rates. Effective ads should feel a part of your game. Presenting them during key moments of deep engagement that may require a booster or extra life in order to progress and continue playing keeps the users engaged in the game for longer.
Myth – Showing too many ads will decrease your ad revenue
Busted – Increase revenue by integrating ads at the right place at the right time
The best part of rewarded video ads is they don’t impact negatively on the user. On the contrary, if implemented wisely, they help increase retention and therefore your bottom line. Players like rewarded videos, it’s been proven in sources here, here, and more.
By introducing intelligent and well-crafted rewards at key moments in the game, developers can deepen engagement, increase ARPDAU and even improve LTV.
When determining your monetization approach, it’s critical to get the frequency, timing and placement of ads seamlessly integrated into your game and how the users play.
Myth – Rewarded Video does not give an uplift to genres such as mid-core games
Busted – Using at least one advertising ad format can contribute to your ad revenue no matter the genre
The users watching Rewarded Video are highly engaged, invested in the game, and are willing to perform an action to progress in the game. Since rewarded videos are user-initiated, and surface at key moments when a user may be running out of resources to progress; watching the video means they can continue, without having to pay – no matter the genre.
According to IDC reports, rewarded video ads are particularly popular among mid-core and hardcore mobile gamers. These segments often spend money in games but also appreciate the opt-in for a reward that will help them progress in the game.
Rewarded videos are the gift that keeps on giving
While many of these misconceptions may have circulated across the industry, data and research show us otherwise. When making your informed decision, you should consider the potential lucrative upsides that mobile advertising, and in particular, rewarded video ads can bring. Use this ad format in a smart, efficient and data-driven way to make a positive impact on your app’s bottom line.
The best way to approach the rewarded video ad format is to think about this ad integration early on in your development cycle and allow it to become a part of your game that feels intuitive but at the same time supports your mechanics. If you’ve already developed your game, it’s still not too late to implement rewarded video. Using A/B tests and mindful placements for your user base can make all the difference to your monetization strategy. Do it well and the results will follow.