Rewarded video is a type of ad format which allows users to receive in-app rewards in exchange for watching a video ad. Rewarded ads are opt-ins for the users to click and watch. These types of ads are a win-win situation for the users, publishers, and advertisers. Users receive in-app rewards, publishers earn the highest eCPM and advertisers earn increased impressions.
In every reward ad, there are four main events that can occur:
The user is given an option to view the ad in exchange for a reward which is called the ad prompt. Users can opt-in to watch an ad to get an ad reward, whereby the users receive extra life or coins after viewing the ad. Once the user is finished watching the ad, they can resume from where they left off, which is called the item used.
Rewarded ads are used to increase competition in mobile gaming. Rewarded ads can balance user experience and monetization. Rewarded ads are a great way to increase app revenue. In gaming applications, users can opt for rewarded ads to earn coins instead of paying money and they can get access to items or access to the next level.
Users also get the option to engage with the ads. User retention is increased and the opt-in feature gives the user the option to choose whether they want to watch the ad or not, giving them a seamless experience.
App developers can earn the highest revenue per thousand impressions (RPM). Rewarded ads can turn users into spenders through in-app purchases. Advertisers on the other hand receive higher user engagement through rewarded ads when compared to other ad formats.
They receive higher ROAS (Return on Ad Spend), this is because users often watch the ads till the end. As a result of performance, marketers have increased brand awareness and seen higher conversion rates.