Rewarded Video Ads: A Complete Overview, Benefits & Ad Specs

by Brandon Weaver in Advertising

The advertising market has had to work hard to keep up with the rapid changes in mobile technology. To stay one step ahead of users’ distaste for advertising itself, a slew of new advertising opportunities has appeared.

A favorite among these is incentivized advertising, particularly in mobile entertainment apps. Chief among incentivized ads is the rewarded video ad.

In this article, you’ll learn what a rewarded video ad is; the pros and cons of using this type of ad for users, developers, and advertisers; the average ad specs; and some top platforms providing rewarded video ad options.

What are rewarded video ads?

A rewarded video ad is a video that a user can choose to watch in exchange for some incentive — an extra life in a game, an extended free trial, a puzzle hint, or virtual currency, for example.

If a user clicks on the ad, you can direct them to a URL that you set like your website or a custom landing page.

With the implications of rewarded video ads, they’re most commonly used in games or entertainment apps. However, they have other uses and placements, and not all are exclusive to mobile devices.

Rewarded video ad examples

Below are three examples of this type of ad and the incentives that watching the video provides to the viewer.

1. Spotify

For regular Spotify users, an option is presented (via an audio ad) to watch one video ad and receive thirty minutes of uninterrupted music. This presents the benefits of a Spotify premium subscription (no ads), but without a monetary exchange. This can be done as many times as the user wants.

2. Giant Boulder of Death

Notice the purple diamond and the “+1” incentive in the lower right-hand corner

Since players can use the diamonds to buy additional game features, there is a big incentive for players to watch the ad. Once the option is selected, it is impossible to cut the video short without also losing the reward. This option is presented to the player every few hours, so the reward does not become too readily available.

3. Clickpocalypse II

This mobile game offers several variations of in-app bonuses to maximize click potential. With seven different options, the user is more likely to be motivated by at least one of the rewards (and therefore far more likely to watch the video ad).

Having a variety of reward options also allows for multiple ads to be available. This feature could potentially be used to provide users with more targeted ads if the reward choices were found to be indicative of particular interest areas.

Do rewarded video apps work?

Rewarded video apps boast some impressive success rates:

71% of players prefer in-game video ads more than paid apps or in-app purchases
54% of players specify that rewarded video ads are their in-game video ad of choice
62% of players regularly chose to voluntarily engage with rewarded video apps
62% of developers saw user retention maintain or increase upon the introduction of rewarded video ads
52% of mobile game developers said that rewarded video apps served as their most lucrative type of in-game advertising, per user

These are remarkable statistics considering the vast scope and numerous variations of advertising available. The stats alone convey the preference that, it seems, users and providers hold for rewarded video apps over other advertising options.

Advantages of rewarded video ads

Rewarded video ads can be beneficial to users, developers, and advertisers alike. Here are some of the ways they help the three parties involved:

Benefits for users

Ability to choose when to watch a video ad — there is never a moment when the video ad autoplays and the user is forced to watch
Rewards for watching ads — ads are always accompanied by an incentive
Lower prices for apps or fewer in-app purchases that require money — the user buys features and benefits with their time and attention

Benefits for developers

Higher user retention rates — users are less likely to get frustrated and give up on the app if they have the opportunity to watch a video to earn hints, additional lives, or some other reward
Up to 80% of users opt-in to advertising — more users choose to watch ads, which may be just as lucrative or more than direct in-app purchases (because of ad earnings)
More downloads — if an app is free, and earning the developer money from rewarded video ads, more users can afford to download the app in the first place

Benefits for advertisers

Higher completion rate of ad views — the user isn’t rewarded unless the ad is viewed completely, so it’s less likely that the video is skipped or cut off
Better audience targeting because the user is choosing to watch the video ad, it’s more likely that they’re choosing to watch ads they have some interest in
Higher viewer satisfaction because rewarded video ads are opt-in and non-intrusive, viewers tend to look more favorably on the advertiser

Disadvantages of rewarded video ads

The biggest disadvantages of this type of ad affect the advertiser and developer. These are:

Low-quality traffic or low user engagement — often, users are only watching the video advertisement for the reward, and are not very invested in the ad content
Lower lifetime value of users — often, users who download an app or service only for the reward don’t have a vested interest in staying active on the app for a long time

Ad specs

Specs for rewarded video ads differ by ad platform. However, below are a few of the recurring guidelines:

Ads must be interstitial — covering the entire screen
The user must click to initiate the ad. The ad cannot begin play without being selected by the user
The ad must automatically play audio or be controlled by device volume settings (not in-app volume settings)
Video length: Typically ranges between 15-60 seconds, depending on the platform. Facebook specifies 15-30 seconds, and Google specifies no more than 60 seconds.
Videos cannot be skipped once they’ve been selected or, can be skipped only if a message detailing that the user will not receive the specified award is presented and accepted
Videos often (but not always) must support static end cards

Major players in rewarded video advertising

Rewarded video ads have been around less than a decade, but are already making their way as one of the most popular forms of mobile advertising. As more and more brands find their way into the arena, those who tend to provide the best advertising services quickly rise to the top.

Here are a few of the top ad networks that feature rewarded video ads:

AdColony

AdColony was the first company to offer rewarded video ads and is still a major player in the field.

Vungle

Vungle is a San Francisco-based company responsible for nearly a quarter of the market shares for the top 200 iOS and Android apps.

Unity Ads

Unity Ads has become a major mobile ad platform since their acquisition of Applifier by Unity.

Receptiv

Receptiv is a New York-based company with a global reach of over 150 million.

Tapjoy

Tapjoy is a San Francisco based ad platform with a global reach of 520 million.

ironSource

ironSource is a Tel-Aviv-based with a global reach of 800 million.

Fyber

Fyber is a Berlin-based company with a global reach of over 500 million.

AdMob

AdMob is owned by Google. The platform has a global reach of over 1 billion.

Facebook Audience Network

Facebook’s Audience Network also has a global reach of over 1 billion.

MoPub

MoPub is another San Francisco-based company. The platform was acquired by Twitter in 2013 for $350 million and has a global reach of over 1 billion.

Going beyond rewarded video ads

Rewarded video ads are incentivized, opt-in advertisements most easily and often used in mobile games. They are highly beneficial to users, developers, and advertisers alike, which is likely why they’ve burst to popularity in the last several years.

This is just one of many ad types available to digital marketers. Hundreds of other advertising options exist and selecting the right ad platforms for your business can be a challenge. On top of that, keeping tracking of the different requirements required by each platform can be overwhelming.