Struggling with the low ad revenue? Rewarded video ads could be just what you need to increase your ad engagement, clicks, and, ultimately eCPM. In this blog, we will walk publishers through all-things-rewarded video ads and how they can maximize their potential.
Driving meaningful ad engagement is a challenge, even with the most relevant and well-crafted ads. If users aren’t paying attention, your ad impressions lose their value. For publishers, the goal isn’t just visibility—it’s active participation. Enter rewarded video ads, a format designed to captivate users by offering something in return.
Publishers are increasingly acknowledging the tremendous benefits of incorporating rewarded video ads into their monetization strategies. Particularly in the gaming industry, these ads have taken center stage, with a staggering 90% of gaming apps employing them as the “hottest revenue generator” in the market
Today, we’ll talk about another amazingly powerful ad format: Rewarded Video Ads.
So without further ado, let;s dive right in.
What are Rewarded Video Ads?
Rewarded video ads are ads users can watch in exchange for some incentives – an extended free trial, extra coins or goodies in the games, a puzzle hint, or access to some exclusive features or content.
For example, if users are playing a mobile game, they can be rewarded with in-app virtual currency for watching a full-screen ad for 15 to 30 seconds. These ads are non-skippable, but there’s usually an option to opt out of this type of advertising be.
Rewarded video ads are gaining momentum because they offer an honest value exchange – a user views an ad for a specific time duration and receives a premium gift.
Typically, people dislike in-app ads because they interrupt the user experience. However, when there is an exchange of value, the experience becomes less intrusive and more rewarded.
In short, rewarded video ads are:
Ad Specifications for Rewarded Ads
Specifications for these ads differ by ad platform. However, below are a few of the most-followed guidelines:
Having covered “what are rewarded video ads” and their specifications, let’s dive into how they actually function.
How Do Rewarded Video Ads Work?
The rewards advertising gives users an option to proceed with the ad or to ignore it. However, how the ad will reach to the right audience is another story.
Here is how the whole process works:
Targeting Your Users
The ads are not blindly targeted to the crowd but are reviewed and delivered to people with similar interests. Targeting the audience this way results in more success rates and clicks.
Rewarded Video to Complement IAP
It has been observed that reward ads typically do not affect the IAP ( In-App Purchases) in any way negatively. However, since the users feel more included and feel some added value to their experience, rewarded video ads are now being used by a majority of publishers and advertisers.
Smooth Ad Integration
Since these ads mostly appear in games, their reward must be relevant and add value to the overall gaming experience. For instance, if a player’s character dies, an advertisement can be prompted to grant him an extra life. Likewise, various points multipliers or other rewards can be provided for smoother integration, in such a way that it does not feel irritating.
Here’s how the process of rewarded video ads looks like in a nutshell:
- Rewarded Video Ad Offer:
An in-app event triggers a pop-up of a video app. The pop-up offers the app user to watch a video in exchange for a virtual gift.
- Watch the Ad:
The user can either dismiss the offer or choose to watch the ad for a specific amount of time (5 seconds to 30 seconds) to get the premium reward.
- Earn the Reward:
Once the ad is watched completely, or till the prompt demands, the user is rewarded with a power-up or something similar.
6 Best Rewarded Video Ads Practices
Now that you know how they work, let’s take a look at the rewarded video best practices.
1. Ensure Proper Ad Placement
How you implement rewarded video ads within your app will determine how it is impacting the user experience. To ensure your best ads placement, make sure to prioritize user experience.
For example, if you place an app right before a pivotal moment in your mobile game, this placement can ruin the in-app experience of a user.
You can place ads between levels to give users an opportunity to progress further by leveraging ads. Similarly, when a user runs out of lives (or virtual currency), they can view ads to continue the game without paying.
2. User Experience Should be a Priority
Yes, people don’t mind watching an ad if they’re getting something valuable in return. But there is no need for this ad format to sacrifice a user’s experience. Instead, you should make the in-app experience a top priority and try to deliver ads in a seamless manner.
3. Target Ads to the Right Audience
Another one of the best rewarded video ads is targeting the right audience. It is extremely important to segment users into different audience groups. You can do segmentation based on user behaviour and how people are interacting with your ads. For users who frequently use the app, you can offer less valuable rewards, so they remain engaged.
And for users who use the app infrequently, you can surprise them with a high-value reward to encourage them to use the app more often.
Your first goal should be to know what kinds of ads a user would be interested in. Once you have that information, you can use ad filters to ensure that ads are shown to customized app users who are interested in watching them.
4. Mediate Ads From 3rd-Party Networks
App developers can maximize their ad revenue by partnering with third-party ad networks. They can also use the tool AdMob Mediation, which enables developers to mediate ads from third-party ad networks.
Adding multiple ad networks means developers have a higher chance of filling in the ad inventories. On AdMob, you also get the option to set minimum eCPMs for ad spaces so the in-app ads are not shown unless they meet a certain price. This might mean fewer ads for users, but the ads that are displayed will result in greater revenue.
5. Mystery Rewards to Surprise Users
People love surprises. Publishers should consider offering surprise rewards to users who visit more often. You can place mystery rewards that further boost ad engagement. For example, once a user watches a certain amount of ads, they can send them a treasure chest with more rewards.
The unexpected rewards offer a more satisfying user experience by increasing satisfaction and building suspense when a high-value reward is unlocked. So, if a user wants to get a specific reward, they won’t mind watching multiple ads to achieve their aim.
6. A/B Test Different Rewards for Optimal Results
It is crucial to test different types of rewards or incentives that you can offer to your users. Testing helps developers learn which rewards are most loved and understand optimal offerings that can monetize their apps.
When you’re A/B testing the rewards, including variants such as type of reward, duration of ads, quantity per session, and ad placements.
Who Should Implement Rewarded Video Ads?
These reward video ads are most commonly used in gaming apps. However, they are not just limited to mobile reward videos; this ad format can have other placements and uses that are not exclusive to mobile gaming.
Any kind of app can implement a reward system as long as there is a medium to reward the user. One of the best examples would be Spotify, a music streaming app. On Spotify, users can stream and download music in exchange for viewing ads.
Duolingo, a language education app, has also incorporated this system. Users can gain virtual currency (called ‘hearts’) by watching an ad video. They can use the rewarded currency to access free lessons and progress through the course.
If you plan to implement these ads, make sure to know what your options are, what incentives you can offer, and how you can balance the revenue you generate through the ads.
The key is to serve the right in-app video (with attractive rewards) at the right time to generate the best results.
Advantages of Using Rewarded Ads
With increasing market competition, developers need to find the right balance between user experience and monetization – two components that are crucial to the success of any app. These ads are becoming one of the most effective mediums for achieving that balance.
Rewarded video ads hit three birds with one stone – users, advertisers, and developers/publishers:
I. For Users:
1. Value exchange
2. User opt-in
This type of ad is less intrusive for users because the viewers have an option to either dismiss or accept the reward offer. There is no autoplay, and the users are never forced to watch them.
Since these ads are accompanied by incentives, users don’t mind spending a few seconds watching an ad. Furthermore, they are able to gain in-app premium features without spending money. Put simply, it’s a beneficial deal for users.
In fact, according to Google, 50% of users say that they would be less satisfied with the app experience if rewarded video ads were removed.
II. For Advertisers:
1. Guaranteed Quality Engagement
2. Retention
3. Positive Brand Association
Rewarded video ads have a higher ad viewability score as compared to other ads – because users are not rewarded unless they’ve viewed the ad completely. There’s also no option to skip ads, so it guarantees a higher completion rate of ad views.
Since these ads allow users to either opt in or opt out, it’s more likely that viewers are watching ads they have some interest in. In other words, such ads ensure better audience targeting.
III. For Publishers/Developers:
1. Engagement
2. Retention
3. Revenue generation
If you’re a publisher or developer aiming for higher user retention rates on your ads, you must consider rewarded video ads. Users are more likely to stay if they have the opportunity to earn rewards or get something interesting in exchange.
As much as 80% of the rewarded video ads target audience opt-in to view ads. The more users more will be more revenue you generate through your ad units.
Rewarded video ads are developers’ favourite because they keep users engaged and boost ad revenues. These formats are designed to protect the core app experience and efficiently monetize users who don’t want to make in-app purchases.
Finally, this type of ad provides a great opportunity for implementing a hybrid monetization model through in-app purchases. An increasing number of apps that monetize via in-app purchases are implementing rewarded video ads as a by-product of IAP (In-App Purchase).
That’s not all – rewarded video ads can also serve as an introduction to paid features of an app, so not only do users stay engaged, some of them might eventually become paid customers over time.
Disadvantages of Rewarded Ads
Along with numerous advantages, rewarded video ads come with some disadvantages that are worth knowing. The following list shares those disadvantages:
Low-Quality Traffic
A majority of these in-app users watch these ads just for the sake of rewards. It means they are not really interested in the product or service that is advertised. Hence, the conversion rate or the response rate is generally quite low.
Low Lifetime Value of Users
The same goes for the apps as well. Players downloading an app through these ads might not be interested in the app itself, but in the rewards.
Despite these disadvantages, rewarded video ads are still a great win for publishers and advertisers.
Common Challenges Faced with Rewarded Video Ads
In simple terms, while rewarded video ads come with a host of advantages for app owners and marketers, they also present a few hurdles that need careful navigation to truly maximize their potential.
Here are some of the core challenges tied to the use and management of rewarded video ads:
Ad Frequency Balance
One of the main issues is maintaining a balance between ad frequency and maintaining a positive user experience. Overloading users with ads can lead to frustration and app abandonment. Conversely, displaying too few ads might need to bring in more revenue to justify the effort.
Technical Integration Hurdles
Integrating rewarded video ads seamlessly into an app is not a cup of cake. Ensuring that these ads work smoothly without disrupting the user experience demands careful coding and extensive testing. This process is not only time-intensive but may also require continuous maintenance to resolve any technical glitches that might arise.
Challenges in Measuring Effectiveness
Estimating the success of rewarded video ads is another challenge for publishers. While these ads undoubtedly drive engagement and revenue, locating the exact return on investment (ROI) can be challenging. Hence, advanced analytics tools are necessary to track user behavior and ad performance with precision, making this both a resource-heavy and technically intricate task.
Now, you must be wondering where the trade takes place. How do we actually buy/sell or access rewarded video ads demand? The answer is Rewarded video ad networks.
What are Rewarded Video Ads Networks?
Rewarded video ad networks are platforms that connect advertisers with publishers, offering a range of video ad formats where users can opt to watch ads in exchange for rewards or benefits.
These networks have gained popularity due to their effectiveness in engaging users, driving higher ad completion rates, and providing a win-win situation for both advertisers and users.
Some of the popular rewarded video ad networks for ad publishers or mobile game ads are include:
Rewarded Video Ads Trends for 2025 and Beyond
Our research into rewarded video ads statistics suggests that rewarded ads will be a great way to grow your revenues, not just this year but in the future.
Here are some stats:
Over 80% of game developers use rewarded video ads, with most calling them their most effective format, according to Meta Audience Network.
- 71% of video game players prefer in-game video ads over the in-app purchases
- 62% of developers saw user retention increase after introducing rewarded video ads
- 52% of mobile game developers call rewarded ads to be their most lucrative type of in-game advertising
- Rewarded video ads can be 2X more effective than interstitial videos
In Closing
Using rewarded video ads in your app is an excellent way of increasing an app’s revenue and providing a high volume of quality of ad impressions. Developers using rewarded video ads have seen a positive impact on both revenue and user engagement.
Did you know that you can use AdPushup to create a rewarded video popup that boosts engagement on your site? Or maybe you want to learn how to run ads that are less intrusive and more appealing to your viewers?
Either way, we’ve got you covered. Adpushup combines cutting-edge ad technology with best-in-class optimization techniques to deliver a better experience for your video ads.
Got a minute? Take a look at how we delivered a 534% ad revenue uplift in 6 Months for CCNA7. If you want to learn how our technology can do the same for you, go ahead and request a demo.
Frequently Asked Questions
As the name suggests, these ads allow users to watch a video or interact with a playable ad in exchange for a reward. As an example, mobile game players will eventually “die” upon reaching a critical point.
A Successful Ad Must Have These Five Elements-
i. The target audience should be clearly defined.
ii. The value proposition.
iii. Content and design of high quality.
iv. Call-to-Action (CTA)
v. Follow-up.
The main advanatgs of these rewarded ads is that it helps your users to watch a video and win a reward within the app or engage with a playable ad.
These ads offer the highest eCPM rate. So you can expect eCPM rates to be $15 to $55 per 1,000 impressions.
Rewarded interstitial ads are full-screen ads that offer rewards but don’t require users to watch a video; they usually involve static images or interactive elements. On the other hand rewarded video ads, specifically require a user to watch a video ad in exchange for a reward. Both engage users, but the format and experience differ.
Deepak has a keen eye for detail and a deep understanding of the ad tech landscape. Whether it’s through in-depth articles, thought-provoking insights, or compelling storytelling, he’s dedicated to helping people navigate the complex world of ad tech with the simplicity of his words.
