School of Ad Tech: Understanding the Difference Between Rewarded Video and Rewarded Ads

Advertisers are always on the lookout to engage efficiently with the users to maximize conversions. It isn’t always an easy task — with the mobile landscape becoming increasingly competitive, to stand out from the crowd, one needs a smart advertising strategy. To do this, channels of Rewarded Ads and Rewarded Video ads are increasingly being preferred.

However, there is still some misunderstanding in the industry on the terminology of Rewarded Video and Rewarded Ads and often these terms are incorrectly understood to mean the same thing. With this School of Ad Tech piece, we will spell out the differences between Rewarded Video and Rewarded Ads.

What are Rewarded Video Ads?

A Rewarded Video ad is a short video, usually around 15 sec maximum. Users need to opt-in to watch this non-skippable video – having been incentivized to do so by being offered a reward such as an additional life in a game or in-app credit. To ensure a non-intrusive user experience, the ad should ideally be placed at a point when the user is failing to progress in the game to incentivize him to stay in the game and be more susceptible to opting in to watching the video.

There are various advantages of this format:

  • Has a positive impact on brand awareness and to introduce a new app or product to the user.
  • Video traffic is incentivized-only, which leads to genuine clicks and can result in high quality installs and increased lifetime value since the app was previewed by the user before deciding.
  • Non-intrusive experience offering higher engagement.
  • Also for publishers, this format offers higher eCPMs as compared to other ad formats such as banners and static interstitials.

What are Rewarded Ads (Incentivized Ads)

Rewarded Ads are opt-in ads that reward users for interacting. They usually come at an app’s transition point, for example, between game levels. Rewarded Ads usually come as an incentive for the user to gain something in exchange for interacting with the ad and performing an action. These “rewards” are correlated to the action completed. When a reward is higher, usually a more difficult user action is expected, which in turn also makes the reward more appealing to the end user. Unlike with other formats, here, a user has the option to choose whether they want to interact with the ad or not, thereby offering higher engagement. Rewarded Ads have the following benefits:

  • Non-intrusive experience – higher rewards make completing an action more appealing to the user
  • Increased app store visibility
  • Depending on the UA goals, one can monetize the action that benefits an advertiser’s goals. Advertisers can incentivize a user for an event during their user journey at a price that enables ROI-positive growth.

Rewarded Ads Versus Rewarded Video

To explain the difference between both formats, let’s begin with an illustration: Say, a user is playing a game and suddenly runs out of lives. At this point, a rewarded video ad pops up and asks, “Watch video to keep playing.” The user consents to watching the app and unlocks a reward. No other action from the user is required such as clicking through to the App Store, or downloading an app.

In case of Rewarded Ads, a user will be able to unlock reward (i.e gain incent) upon performing a requested action in the ad such as installing the advertised app. That’s the main difference from an end user perspective, i.e. with rewarded video only the view (engagement) and no action/performance is incentivized unlike with Rewarded Ads, for which the install is incentivized.

At the same time, depending on which action is required, a stronger incent will be presented for the user. This ensures the “non-intrusiveness” of the ad unit and that the action will be lucrative to the end user, hence ensuring a positive connotation.

This, can result in different scenarios: Rewarded Video is a softer incent for users, as they do not have to install the app. This offers a great way for advertisers to familiarize users with their app or product and create strong brand recall. Users who take a liking in the app experience, will download the app with a better chance of being engaged users with a higher lifetime value.

Rewarded Video can be combined with a Playable end card which can make it more performant. Rewarded Video is not just brand awareness – it can actually drive performance that results in increased LTV per user, as they have seen a snapshot of the app experience, or even interacted with a playable end card in some instances, so the likeliness of driving genuine installs is high.

Rewarded Ads, through burst campaigns, can boost visibility and inspire incremental genuine downloads. When it comes to quickly scaling results, Rewarded Ads can be extremely powerful. For sustained Rewarded Ads campaign, focused purely on ROI-positive performance, it can be a highly performant format for advertisers resulting in long-term scale.

Advantages are to be had on both sides: Rewarded Ads help scale quicker and are extremely performant at a lower cost, while Rewarded Video combines the strength of brand awareness with ROAS-centric performance, resulting in increased lifetime value per user. For any campaign strategy the combination of both can make sense at different stages of a campaign and for different purposes.

When it comes to adopting the right format, both these ad formats have their use cases depending on the advertiser goals. It is best to strategize in a way that one can leverage both to drive optimal results.

AppLift’s Anna Schmitt (Team Lead, Product Marketing) and Anica Rademan (Manager Rewarded Ads Platform) contributed to this article.

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