How Rewarded Video Ads Can Benefit Your Business

Smartphone users access a massive amount of information on their

devices. Studies show that in Q1 of 2019, the average smartphone user

spent roughly 4.2 hours each day accessing the mobile web. With people

spending so much time on their mobile devices, it has become harder than

ever for advertisers to gain exposure using traditional ads. The

question now is how to effectively gain attention from mobile users and

raise conversion rates while also ensuring an enjoyable user experience

on mobile platforms.

Allow us to introduce rewarded video ads -- the perfect solution to this

problem.

What are rewarded video ads?

Simply put, rewarded video ads are an immersive video ad format that

lets app users opt-in as viewers in exchange for in-app rewards. Widely

deployed in mobile games, this format integrates video ad content with

actual game scenarios, making each ad a task that a player can complete

to gain an advantage or benefit. By stimulating and fulfilling users\

needs as gamers, rewarded video ads have become a highly effective way

to attract their attention and generate value.

To understand why these new ads have become so influential in the mobile

gaming world, it helps to know more about the key factors driving their

popularity.

A promising global trend

With moving visuals and audio elements, video ads convey far more

information than static image ads when displayed for the same length of

time. Meanwhile, users who watch the ads to completion are usually more

interested in clicking by the time they finish, raising the likelihood

of conversion. An additional benefit is that this group of users has a

higher customer lifetime value, as they are more likely to return to the

game and make purchases again in the future.

As 4G coverage expands, short video technologies and platforms are

developing rapidly, making it easier to produce and distribute video

content. Since 2016, the overall proportion of expenditure growth on

mobile video ads has nearly doubled, establishing video ads as a global

trend.

A win-win situation for users and developers

Rewarded video ads have broken the traditional rules of advertising in

unexpected ways. Rather than the one-way information flow that

characterizes traditional ads, rewarded video ads give users the option

of becoming active viewers, rewarding those who choose to do so.

The core framework of this model is that developers use video ads to

monetize while transferring some of the revenue they earn back into

in-app rewards for the users who watch them. Giving viewers a sense of

choice enhances the user experience, instead of forcing them to watch

something against their will. For advertisers, this element of user

satisfaction is the key to gaining deep conversions. Data from Pangle

shows that rewarded video ads tend to generate 4 times higher CTR rates

and 3.6 times higher CVR rates than other ad formats.

Rewarded video ads also have the advantage of fitting natively into the

game itself, becoming part of the overall game experience without

disrupting user flows. By integrating these ads, developers can

encourage users to spend more time in the game and motivate in-app

purchases. Data from Pangle shows that after viewing rewarded video ads,

players spent an average of 20%-30% more time in-game, while retention

rates rose by 15%-20%.

A new game ecosystem primed for expansion into other verticals

All of the above advantages make rewarded video ads a means of

establishing a thriving, mutually beneficial game ecosystem of users,

advertisers and developers. Users like the ads because they gain real

value by watching them. Advertisers are happy because they can more

effectively target higher conversion rates while raising the LTV of each

conversion. Developers meanwhile obtain higher eCPM and product rating

results.

Although rewarded video ads have yet to reach maturity in verticals

other than gaming, they are already showing a high potential for

adoption in IAP verticals including online reading, social media, and

utility apps.