Benefits of Rewarded Ads and How to Implement Them Successfully

This is a guest post by Julien Muret, Google’s AUNZ App lead. Julien helps Gaming studios in the AUNZ region to develop their business with advanced digital ad monetisation and measurement solutions.

Throughout 2020, people worldwide download more games, spend more time and money playing, and consumed more in-home entertainment than ever before*. The COVID-19 pandemic kicked these trends into high gear and consumers were ever busy playing games during the holidays.

With these trends in mind, it is even more crucial to learn how to connect with a wider audience and keep up with gamers’ changing behaviours.

Game queries on mobile devices were up 41% in Q4 19 compared to Q1 19** while eCPMs – cost per thousand impressions – of rewarded ads peaked in Q4 in the US. The pandemic has dramatically changed the way users interact with their phone and especially with games. As gamers increasingly spend time at home, they are also spending more time discovering games online. During this unusual year, 25% of gamers in the US*** spent money on in-home entertainment for the very first time.

In peak months of H1 2020, mobile users downloaded 25% more games than during the same period last year. Subsequently, the growth of ad placements rose by 70%*

The hybrid model in the gaming economy has been increasingly successful over the last few years as it meets the needs of a larger audience and helps to engage users with the game’s content and its IAP (In-App-Purchases) items. While there are many formats that can be identified to develop ad revenue within a game, Rewarded Ads offer a unique win/win/win model – a user chooses to watch an ad in exchange for a reward (such as currencies, lives, points, special features available for a limited time, one-off usage of an item etc.)

The concept of rewarded ads is based on three pillars:

1. The value of the reward
2. The discoverability of the ad placement with the game, and
3. Its re-watchability

Below are the questions that need to be answered before implementing a rewarded ad in a game:

1. What value can I deliver to users watching the ad? How can this be integrated into my core loops?
2. How can users discover rewarded ads?
3. Are there enough benefits to users to re-watch the ad?
4. How do users engage with the game as a result of rewarded ads? E.g. does it drive IAP? Can it help move users from freemium to premium?

An effective way to measure the success of a rewarded ad is to a) measure the actual number of users having at least watched one rewarded ad and b) the number of impressions of rewarded ads. Keep in mind too that in a game, different rewarded ads placements can be set-up: place them, for example, at the shopping screen, at the beginning or the end of the gameplay etc.

While all rewarded ad placements have to be tested to identify how users behave with this format, it is important to make sure they do not cannibalise your IAP items! One straightforward way to check this is to use an analytics tool to identify how your rewarded users behave within the overall population of IAP users.

Another tracking measure is to put in place is a rewarded funnel. There are five events to track for a rewarded ad to identify its exact performance:

1. Screen_view: Is it easy for my users to find the ads?
2. Ad_prompt: Am I showing the rewarded prompt at the right moment? Is it appealing enough?
3. Ad_impression: Do users feel that the rewarded item is worth watching ads and tap the ad?
4. Ad_reward: this event allows to calculate the completion rate. It helps to identify if a) users actually wait until the end of the video to get a reward or b) if they close the ad before the end of it and do not get the reward (feeling that the reward may not worth watching an ad)
5. Item_used: this event allows to identify how the reward is actually beneficial to the user. Are there enough opportunities for the user to utilise or spend what they just earned?

With this particular set-up, your ad monetisation strategy can be very effective and contribute significantly to your app revenue as it helps to engage users within your game. Check out this case study of local developer SavySoda and how their use of rewarded ads, together with lowered pricing for in-app purchases, helped to increase their IAP revenue 3x in emerging markets.

To help you move forward with this set-up, please access our resources here, familiarise yourself with the specific policies,  for this format and/or reach out to me via julienmuret@google.com

Sources:

*App Annie, public report
**Google Internal Data.
***BCG, COVID-19 Consumer Sentiment Snapshot #11: Getting to the Other Side, June 2020