Key Takeaways

• Rewarded video ads are opt-in advertisements that give users in-app rewards for watching 15-30 second videos

• These ads generate 2-3x higher eCPMs ($9-17 per 1000 impressions) compared to interstitial or banner ads

• Publishers benefit from improved user experience and retention while advertisers get higher engagement (45% better CTRs than non-rewarded formats)

• 79% of mobile gamers prefer this format over other ad types because they control when to view them

• Successful implementation requires offering valuable rewards, optimal placement, and non-intrusive timing

What Are Rewarded Video Ads?

Ever noticed those "Watch a video for 5 gems" offers while playing mobile games? Thats a rewarded video ad – one of the most effective and user-friendly ad formats in mobile monetization today.

Rewarded videos are exactly what they sound like: short video advertisements that users choose to watch in exchange for something valuable. Unlike other ad formats that interrupt gameplay, these ads are completely optional and initiated by the user.

When a player runs out of lives, needs in-game currency, or wants to unlock premium features, they can opt to watch a 15-30 second ad to receive that benefit. It's a simple value exchange that works remarkably well for everyone involved.

How Rewarded Video Ads Work

The mechanics behind rewarded videos are straightforward:

1. The app presents an opportunity to gain something valuable (extra lives, coins, power-ups)

2. Users choose to watch the ad (critical: it's their decision)

3. The full-screen video plays for 15-30 seconds, often with a countdown timer

4. After completion, the promised reward is automatically delivered to the user

Here's what makes this format unique: it transforms advertising from an annoying interuption into a positive user choice. Instead of forcing users to watch ads at random moments, rewarded videos appear at natural pain points where users actually want what's being offered.

Benefits for Publishers

For app publishers, rewarded videos deliver several crucial advantages:

Higher Revenue

The numbers don't lie – rewarded video ads consistently earn more than other formats:

• Average eCPMs of $9-17 per 1000 impressions in the US market

• 2-3x higher earnings compared to interstitial or banner ads

• Completion rates often exceed 90% since users are motivated to finish watching

According to Udonis, games implementing rewarded videos typically see a 20-30% boost in overall revenue without harming user experience.

Improved Retention

The opt-in nature of these ads actually helps keep users engaged longer. Research from ironSource shows apps using rewarded videos see:

• 30% higher session length

• 4x better retention rates at day 7

• Increased likelihood of in-app purchases among non-paying users

This seemingly contradicktory outcome makes sense when you consider that rewarded ads help players progress further in games without getting stuck or frustrated.

Benefits for Advertisers

Advertisers love rewarded videos because they deliver exceptional performance metrics:

• 45% higher click-through rates compared to non-rewarded videos

• 93% greater install rates for app promotion campaigns

• Higher brand recall since users actively choose to watch

When users actively opt into viewing an ad, they're more attentive and receptive to the message. This creates a quality impression that's substantially more valuable than forced viewership.

Implementation Best Practices

Getting rewarded video implementation right requires thoughtful planning. Here are key strategies based on industry data:

1. Offer Genuinely Valuable Rewards

The reward must be worth the user's time. AppLixir recommends:

• For casual games: Power-ups, extra lives, or skip-level options

• For strategy games: Premium currency, speed-ups, or rare resources

• For non-gaming apps: Premium content access, extended trial periods, or feature unlocks

The key is understanding what your specific users value most within your application.

2. Strategic Placement Points

Place rewarded video opportunities at natural friction points:

• After failing a level (offer a continue option)

• When resources run low (offer a refill)

• Before accessing premium features (offer temporary access)

• As a daily reward booster (double your daily rewards)

These moments create natural opportunities where users are most likely to see value in watching an ad.

3. Balance Frequency and Availability

Finding the right balance is crucial:

• Too few rewarded opportunities frustrates users who want rewards

• Too many reduces their perceived value and clutters the experience

• Most successful apps limit rewarded videos to 5-7 per day per user

Common Implementation Methods

Most developers use specialized ad networks or mediation platforms to implement rewarded videos. Popular options include:

• Google AdMob - Google's mobile advertising platform

• ironSource - Specializes in game monetization

• Unity Ads - Integrated directly into Unity game engine

• AppLovin MAX - Ad mediation platform with strong video support

These platforms handle the technical aspects of serving ads, tracking completions, and delivering rewards.

Looking Forward: Trends in Rewarded Video

The rewarded video format continues to evolve with several emerging trends:

Interactive Rewarded Videos

Rather than passive viewing, some networks now offer interactive elements within rewarded videos, such as playable mini-games or interactive storytelling. These formats show even higher engagement rates than standard rewarded videos.

AI-Driven Reward Optimization

Machine learning algorithms are increasingly being used to determine optimal reward timing and value based on individual user behavior patterns. This personalization helps maximize both user satisfaction and revenue.

Rewarded Video Expansion Beyond Gaming

While initially popular in mobile games, rewarded videos are expanding to other app categories:

• Fitness apps offering premium workouts

• Educational apps providing access to advanced lessons

• Streaming services offering ad-free viewing periods

Conclusion

Rewarded video ads represent one of the rare win-win-win scenarios in digital advertising. Users get valuable in-app rewards, publishers generate higher revenue without harming experience, and advertisers receive quality, attentive viewership.

For beginners looking to monetize their apps, rewarded videos should be a primary consideration rather than an afterthought. With proper implementation focused on genuine value exchange, they can form the cornerstone of a sustainable monetization strategy that users actually appreciate.

Have questions about implementing rewarded videos in your app? Let us know in the comments below!

This article is part of our Monetization Minis series, designed to help publishers and adtech professionals understand key monetization concepts.