As per industry estimates, 90% of all video advertisements run on gaming platforms are reward based ads
The world of casual gaming runs on the back of advertisement revenue. Amongst the three advertising formats– rewarded video, interstitial ads, banners and native banners– it seems the reward form has emerged as the most preferred. Presented as an opt-in feature, reward advertisements provide users with an opportunity to watch a video or engage with a playable ad in exchange for a reward such as lives, coins, tokens within the app. As per Vaibhav Odhekar, COO and co-founder, POKKT, reward based advertisements are a lucrative option simply because these are presented as an option to the users rather than pushed onto them. “With reward ads, the user is happy and because she is in a relatively positive mindset, she is then open to the idea of looking at the messages shown via ads,” Odhekar told BrandWagon Online.
As per industry estimates, video advertisements account for 60% of overall advertisements on gaming platforms while the rest 40% goes towards banner ads. Of that 60%, over 90% video ads are reward video advertisements. Furthermore, because of the quid pro quo model of a reward video ad, the format has clocked higher click through rates and retention rates than any other format. A recent global survey by Unity Ads, a monetisation platform for Unity, iOS, and Android developers, shows that 54% of players specifically opted for reward ads as their preferred way to ‘pay’ for games while ‘pay up front’ and in-app purchases account for 18% and 11%, respectively.
To give perspective, there are two things that a brand aims at while advertising on gaming platforms– branding and conversion. Brands use banners and interstitial ads for branding purposes while reward ads are used for conversion. Categories such as FMCG, quick service restaurants (QSR), and electronic devices advertise on gaming platforms to create brand awareness and recall. Meanwhile, digital first categories such as edtech, fintech and ecommerce use gaming platforms to boost conversion rates. Interestingly, gaming companies indulge in cross platform advertising. Under this these players advertise on competing gaming platforms. For instance, Gameberry Labs which runs Ludo STAR advertises on other gaming apps via programmatic Google ads claims to have seen higher conversion rates with rewarded ads. “From our experience as an advertiser, we essentially look at high-value players, the ones who will purchase the most. Banner and Interstitial ads do not work for conversion. When we just have to create a recall and make users aware of a new feature then we use banners or interstitial ads,” Pradeep Gupta, head, marketing and growth, Gameberry Labs, stated. Run solely on the back of reward ads, Gameberry Labs experimented with banner and interstitial ads six to eight months ago on their own platform, but ultimately discontinued the alternate ad formats due to low impact on their topline.
Some platforms also run an alternate of reward ads– incentivised ads. Based on the back of the same structure, incentivised ads are shown as an opt-in format and provide users with rewards but only after downloading or registering for a sponsored app. While reward ads simply introduce users with brands, incentivised ads result in direct conversion for advertisers. “The key value for a brand is that by using our performance campaign they are able to reach out to their core users in a much more direct way rather than throwing their inventory in different platforms. For a platform, they are able to monetise their user base in a very interesting way and charge a premium for the core users. As for users, they get an incentive by downloading certain apps and services which gives them access to more time and currency on our platform. We provide rewards to our users for downloading certain apps, or registering with certain services, retaining on certain services and for making deposits or purchases on different services,” Piyush Kumar, founder and CEO, Rooter, highlighted. Rooter claims to have 65 brands advertising on the platform. Of this, 40-50 brands opt for performance marketing.
Reward ads increase app revenue by 20-40%, according to a global ad-mediation network Ironsource. In India, the cost of a reward video ad on a gaming platform ranges between Rs 20-60 paisa per completed view, with 75-80% of users completing the ad. As for incentivised ads, cost differs from Rs 40-90, depending on the key performance indicators (KPIs) of the advertisers and the platform gets paid only if those KPIs are met. On the other hand, cost per thousand impressions (CPM) of a small banner ad would be anywhere between Rs 40-50 CPM, while normal video ads’ CPM would range between Rs 120-150.