Rewarded video ads: How to start increasing your revenue | Chartboost Academy

August 17 · Nick Schultz · 9 Min read
A rewarded video ad is a specific kind of ad unit in which users are offered a reward in exchange for watching a short video advertisement. Here's how it works.

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There are multiple ways to monetize mobile games, but in-app advertising (IAA) is the most popular. Why? Because the right strategy can help developers drive incredible revenue.

So what is the “right” strategy? The obvious answer is that you will have to decide that for each of your unique games. However, more often than not, the answer is to use rewarded video ads.

Keep reading as we define what rewarded video ads are and why they can be so beneficial to mobile game developers like yourself. We’ll also share five tips you can use to implement an effective rewarded video ads strategy. Intrigued? Let’s get started.

Understanding rewarded video ads

A rewarded video ad is a specific kind of ad unit in which users are offered a reward in exchange for watching a short video advertisement. Here’s how it works:

  1. The Offer: The user is offered a reward if they watch a full-screen video ad. Rewards range from extra lives to additional in-game currency to premium in-game content.
  2. Watch Time: The user agrees to watch the video ad in exchange for the reward they’ve been offered. Most rewarded video ads last 15 to 30 seconds.
  3. The Reward: The user finishes the video ad, receives the reward they were promised, and returns to the game they were previously playing.

Rewarded video ads have become extremely popular in recent years, especially in mobile games. It’s not surprising. These ad units benefit everyone involved.

Players watch rewarded video ads when they want to. They also get access to fun prizes they’d otherwise have to wait and/or pay for — a boost to the user experience. In fact, 62% of mobile game players regularly choose to engage with rewarded video ads. 

Advertisers pay publishers when a player watches their entire ad. Said ads usually generate more engagement too because players are incentivized to view them. That’s why rewarded video ads are one of the best lead-generation tools available.

Developers can offer players premium content and experiences, which helps increase player retention and engagement rates, as well as lifetime value (LTV) in the long-term.

Research shows rewarded video can benefit developers in the short-term as well, helping them generate 20% to 40% more in-app revenue than they could using other ad units.

Improving player engagement with rewarded video ads

As we mentioned, the average user wants to engage with rewarded video ads. Why wouldn’t they? For only a few seconds of their time, they can access valuable prizes. But it gets better.

Rewarded video ads are often less intrusive than other ad units. This is because rewarded video ads are opt-in, which means users can choose to watch them or not. They’re generally placed in strategic locations such as natural breaks in gameplay.

That’s not to say that rewarded video ads are a magic bullet. You need to develop a strategy and deploy it effectively to improve player engagement. We’ll talk more about that at the end of this article. For now, let’s look at a few rewarded video ads in action:

Trivia Star

Trivia Star is an extremely popular trivia game. To help monetize its extensive user base, the game’s developers deploy rewarded video ads in multiple locations.

First, players can unlock a “daily reward” after completing the first level. They simply choose one of three boxes and accept the random prize inside. Afterward, they’re shown two video ads, each with different rewards that players can choose to watch or skip.

Shadow Fight

Shadow Fight is an action-packed, 3-D combat game with an incredibly loyal following. In it, players learn how to fight, collect weapons, and win gems — the in-game currency.

Shadow Fight isn’t shy about using rewarded video ads. Players can watch them after they complete levels to earn additional bonuses or multiply rewards they’ve already won.

Castle Clash

Castle Clash is proof that rewarded video ads can be used to monetize strategy games too.

If you’re unfamiliar with Castle Clash, it’s a war game with millions of players who each attack each other in an attempt to supersize their personal empires.

In the game, players can hire special heroes to help them fight. However, doing so costs gems, the game’s in-app currency. Fortunately, players can watch a rewarded video ad once every 24 hours to win heroes for free, thereby increasing their chances of world domination.

Increasing ad revenue with rewarded video ads

Game developers need to make money. The natural question is what is the potential of rewarded video ads revenue. Can these ads help your game increase its bottom line?

Absolutely. As mentioned, the average player actually enjoys rewarded video ads and actively chooses to engage with them on a regular basis. This alone gets advertisers excited to spend money on this kind of ad unit. The end result? Happier customers with greater LTV metrics and satisfied advertising partners that pay premium rates.

Rewarded video ads may sound too good to be true, but its power has been proven time and time again.

PickCrafter, for example, increased revenue by 165% after just one rewarded video ad campaign without experiencing a significant increase in daily active users. In other words, PickCrafter didn’t generate new users, it simply made more money on the users it already had.

5 tips for implementing rewarded video ads

No doubt about it, rewarded video ads are an incredible opportunity for mobile game developers if used effectively. These five tips will make sure you do.

Choose the right ad partner

First, partner with a reliable ad network.

More than that, partner with an ad network that fits your game’s genre, unique audience, and specific monetization goals. Doing so will increase your chances of advertising success.

Chartboost, for example, is a top-rated ad network because we offer a variety of innovative ad formats, including (you guessed it) rewarded video ads, as well as painless waterfall management. When you partner with us, you get access to real-time optimizations to help increase revenue.

Most importantly, though, we’re completely committed to transparent reporting. If you work with Chartboost, you’ll always have the key insights you need to make informed decisions.

Prioritize the user experience

If you want to succeed with rewarded video ads, you have to prioritize the user experience. How? Here are a few simple tips:

  • Consider placement: When do you display rewarded video ads? Look for natural breaks in gameplay, such as at the end of a level or after a player loses a life.
  • Make the reward clear: Why should players watch your video ad? Because the reward is worth their time. Make sure the benefit is abundantly clear to all users.
  • Don’t overdo it: Lastly, don’t display rewarded video ads too often. Sure, it might help you drive more revenue in the short-term, but players will grow bored of them eventually. Overuse can also affect your game’s ability to sell in-app purchases (IAP). Think about it: players won’t purchase anything if they can get it all for free.

Offer something valuable

The best rewarded video ads offer something valuable to players in exchange for 15 to 30 seconds of their time. It could be in-game currency, a one-time powerup, a new level, etc.

If users don’t care about your rewards, they won’t watch your ads. And if they don’t watch your ads, advertisers won’t want to work with your game, which means you won’t drive revenue.

Just make sure your rewards aren’t too valuable. 

Your rewards should entice players to watch your video ads. They should not disrupt gameplay or prevent engaged players from making IAP. If your rewards do either of the two, they’re too valuable and you need to reassess your strategy.

Test and optimize your ads

Are your rewarded video ads working?

Do players watch them? Do they generate clicks and conversions for advertisers? Has your game’s engagement and retention metrics improved? How about revenue numbers?

You need to test different strategies, analyze the performance of each one, and use this information to optimize your approach to rewarded video ads. This is the way.

Pay special attention to ad placement and frequency; they have a huge affect on the user experience. As mentioned before, your ad strategy should never supersede your players.

Avoid a few common mistakes

Finally, avoid the mistakes that many game developers make when attempting to monetize their games with rewarded video ads. Here are three common ones:

  • Treating every player the same: Every person who plays your game is different. You need to segment players and show different ads to different groups of people. This will help you increase ad engagement, click rates, and conversion rates.
  • Neglecting every other ad unit: We won’t lie, rewarded video ads are effective. But they aren’t the only ad unit available to you. Experiment with interstitial ads, banner ads, and playable ads to see which perform best for your specific game(s).
  • Refusing to show ads: Are you afraid that your rewarded video ads strategy will drive players away? Totally understandable, but this fear shouldn’t keep you from monetizing your game in this way. When executed deftly, the upside is worth the potential churn

Wrapping up

Rewarded video ads can be incredibly beneficial to mobile game developers.

Used correctly, this ad unit will help you increase player engagement, drive more revenue, and build the successful enterprise you’ve always dreamed about.

Make sure you implement your rewarded video ads strategy the right way. As long as you choose the right ads partner, prioritize the user experience, offer something valuable, test and optimize your ads, and avoid a few common mistakes, you should do just fine.

Speaking of ads partners, have you checked out Chartboost yet? We’re ready to help your game with top-level rewarded video ads. Sign up for free to get started.