Rewarded advertising has a long track record, but it’s the future of this approach that is set to shape games monetisation in the years to come. The numbers are enormous.
Kayzen founder and CEO Tim Koschella estimates global rewarded in-app advertising revenues to $3 to $5 billion. That’s a figure sure to soar as publishers race to grow ad revenues and advertisers demand access to valuable audiences more likely to convert.
While there’s a clear consensus around the revenue uplift of rewarded advertising for mobile games, it can be tricky to choose the right mechanic for your game. And it doesn’t stop there. Growing demand for rewarded advertising means more formats. This is why it’s critical to understand the art of rewarded ad monetisation.
Drawing from 5+ years experience and a first-hand grasp of best practices at AppLike Group and specifically our ad network adjoe, I have provided an analysis of the three most effective rewarded ad units for monetisation, and have shown my favourite implementation of each. Understanding the pros and cons equips you to reach your revenue targets and keep your users engaged.
Rewarded video (RV) offers players perks in exchange for watching an ad. Its simplicity has allowed it to become the standard ad unit to engage and monetise gaming audiences at scale.
This has won RV a central role in the monetisation strategies of a broad range of companies, including Jam City. Kiel LeBaron, Jam City’s Mobile Ad Monetisation Expert, told me RV plays a key role in the company’s monetisation strategy. In addition to positive feedback from advertisers, internal teams and players, Kiel sees a positive impact on revenues.
“We consider it supplemental to our overall revenue strategy,” he says. “And it’s a way to maximize LTV for certain segments of users.”
Follows the flow: RV can be implemented at various points in the game that make sense for the player (Example: unlock levels, get more currency, get a booster).
Low-friction: Videos are short (20-30 seconds) and don’t disturb UX.
High demand: The ad unit is well known and widely spread. (Internal adjoe data shows 95% of our own advertisers use the unit as a UA channel.)
Limited relevance: Users can be confronted with (and annoyed by) ads in your game that are not relevant. Internal UA data from AppLike Group subsidiary justdice.io shows that the average IR (Install Rate = Installs/Ad Views) of a RV is ca. 1%. This means a user watches 100 videos on average before installing 1 app. That’s 20 - 30 minutes (!) of video time before one install happens.
Ad overload: In our companies, we see $12.50 eCPMs for RV, on average (Android/U.S.), i.e. to make $1.25 in revenue means subjecting your users to view 100 (!) ads. That can have a significant impact on UX and present a substantial risk for your business. That being said, eCPMs for video ads are still much higher than for banners.
The major ad networks in the space are Applovin, Ironsource, Unity Ads, Vungle, Adcolony, Facebook and Google.
The ad unit in action: Success with RV hinges on how you implement it in your game. In my opinion, a pretty awesome example is Kolibri’s Idle Miner Tycoon, which cleverly offers users a way to collect a big amount of soft currency every time they come back to the game. It’s a smart approach because it covers all the bases: scarcity (“Jackpot!”), a high value of the currency (comparing it to their hard currency dollars), ownership (“You found it, Boss!”) and a good amount of FOMO (“Fear of Missing out”). It’s a winning combination that’s sure to drive high conversion rates.
Offerwalls (OW) are a proven mechanism that date back to before the App Economy. It’s all about offering users free content when they perform actions on third-party websites and apps. In mobile gaming, the offers that drive the highest yield reward users for reaching a certain level in the gameplay or making a purchase in a third-party game.
High eCPMS: The monetisation power of OW is massive. A snapshot of recent data (spanning the past 12 weeks) from mobile app intelligence provider Soomla Adintel reveals that two major OW players (Tapjoy and Fyber) have been able to achieve 3-digit eCPMs on average in the U.S using the format.
User in the driver seat: Users are in control of the experience. They can opt-in to the offer they want and the action they are willing to perform.
Value-add: In our experience, OW provides an incremental revenue stream if implemented right, not cannibalizing RV or other ad revenues.
Low personalisation: Every user sees the same wall of offers. My own road test confirmed this: the absence of personalization in the ad unit means the user is not exposed to targeted content, but long “walls of offer options”
Long timeframes: The time investment needed for users to reach the goal associated with the offer can be significant. This means publishers send players away from their game for long periods of time - which can increase churn.
Tracking gaps: The correct booking of user rewards is dependent on postbacks (tracking pixels from advertisers). This process tends not to work 100% and can be impacted by technical issues, shortcomings and delays. This can frustrate users, who voice their complaints to games companies, in google play store ratings and other players.
The major offerwall providers in the space are Tapjoy, Fyber, and Ironsource.
The ad unit in action: The implementation of OW in Social Points’ Dragon City gets high marks for mechanics. It allows users to earn free gems after reaching “Freebie Island,” a space where they can complete tasks to earn rewards. What makes “Freebie Island” all the more alluring is the fact that rewarded ads become available after users reach certain points in the gameplay. For the gamer, this feels like unlocking a bonus, rather than interrupting gameplay.
Playtime, adjoe’s own rewarded ad unit, allows users to earn virtual currency for their favorite game through playing third-party games.
Playtime rewards the time spent in 3rd party games, opposed to watching videos or reaching in-app-events. I’m quite excited to have seen impressive first results in the past 12 months. In a recent interview with Forbes Mark Avidan, Playtika’s Media Department Lead, and Darren Markovitz, IMVU’s Head of Monetisation, highlighted the benefits of Playtime for user monetisation and retention.
The ad unit drives simplicity of the ad unit is also its appeal:
Revenue uplift: Based on numbers from our publisher network, the ad unit drives higher ARPDAUs than other solutions (US/Android 0,50 USD - 1,50 USD net, depending on the game).
Retention uplift: Playtime reminds users to come back to the publisher’s game every few minutes to “collect their currency.” This frequent toast notification drives reactivation. In fact, adjoe internal data shows publishers see results that range from an uplift of 0% (which means retention remains stable and there is no churn) to 25% in D7 retention.
Relevant content: Playtime personalises offers shown to the users based on their individual installed app profile (that is, the apps installed on their own device). This maximises ad-fit to the user.
No user complaints: Playtime rewards are based on time spent tracked from the device, not based on advertiser postbacks.
Solid Currency: This is not the ad unit to choose if you want to monetise no or low-value currency in your games. Users have to be properly incentivised and see the benefit of installing and playing an advertiser’s game. Android-only:Apple’s decision last year to crack down has impacted a range of app install related campaigns and approaches. For this reason, use of this ad unit is limited to Android. SDK: Playtime requires an SDK integration to track the time spent in apps from the device.
The ad unit in action: A company taking the Playtime ad unit to the next level is IMVU. The company, which offers a 3D avatar-based social networking universe, has added Playtime to its monetization stack alongside existing video and offerwall providers.
This checklist helps you make tough decisions about your game and how to monetise your audience without sacrificing longer-term loyalty and engagement. All the companies and approaches I listed above can help you achieve better results, but don’t just weigh the pros and cons of each. Making the right choice for your game depends on a variety of factors including your in-app currency and economy, your revenue strategy and your engagement goals.
Make the match based on these considerations, and don’t think it’s a matter of set-it-and forget-it. As in all aspects of your strategy continuous testing is key.
Guest Author Jonas Thiemann, Co-CEO & Founder AppLike Group:
Jonas Thiemann was born in 1990 in Hamburg. In 2015, Thiemann and Szelinsky founded the mobile adtech company AppLike with Gruner + Jahr and Bertelsmann SE, a global media conglomerate. After reaching a TOP 10 Appsflyer Index Ranking for several times, Thiemann has expanded the company into a group of companies which today operates various businesses including adjoe.io, justdice.io and sunday.gg. AppLike Group currently employs around 100 people. Learn more at https://applike-group.com/
adjoe rewards users for the time they spend in games they love through its Playtime ad unit, creating engagement for advertisers and fostering retention for app publishers. The ultimate result is a virtuous cycle for all stakeholders and increased eCPMs. adjoe’s customer base includes major games studios such as JamCity, Playrix, and Zynga — and is part of the Applike Group, a mobile app marketing platform provider. Learn more at https://adjoe.io/
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