What is a rewarded ad?
Rewarded ads are a popular ad format that gives users an opportunity to watch a video or engage with a playable ad in exchange for a reward within the app. Unlike traditional ad models that rely on a “push strategy” — where developers decide when to show a user an ad — rewarded ads follow a “pull strategy” — where users choose when to watch an ad.
Why use AdMob rewarded ads
Creating a successful app business involves balancing the needs of three different groups: strong revenue for your business, a great app experience for users, and user engagement for advertisers. AdMob rewarded ads are a winning combination that delivers across the board.
- Developers: Users are 20-40% more likely to opt in to rewarded ads versus other ad formats, meaning that developers see a higher and steadier flow of revenue.
- Users: Rewarded ads provide a non-intrusive way to gain valuable items, such as premium app versions, by watching an ad instead of paying for them.
- Advertisers: Rewards make ads more compelling, and combined with a better user experience, people are opting in to watch more rewarded ads — resulting in a higher return on ad spend (ROAS) for advertisers.
We want people to keep playing our games, and rewarded ads helps us do that. It’s a good experience for the user to watch an ad in exchange for a reward. AdMob’s innovation has helped us scale, and we now use them for every game we launch.
UA & Monetization Manager, Voodoo,
Best practices for rewarded ads
There are many factors that affect your ad’s performance, such as: implementation, design, or placement within your app. In this guide, we’ll share the most important tips and resources to help you succeed with rewarded ads. Read on for more.
The rewarded ad funnel has four steps: the ad prompt, the ad impression, the ad reward, and the moment the item is used.
In this guide, we will be focusing on the two steps developers control: the ad prompt and the ad reward. Below are some general rules to follow as you begin to design your ad.
Designing your prompt
The ad prompt is where a user is presented with the option to view an ad in exchange for a reward. A good prompt can increase opt-in rate — leading to more impressions and higher revenue.
1. Focus on clear messaging that delivers value to your user. Your prompt should clearly communicate the value exchange that is about to occur.
2. Design for your target audience. Understanding who sees and interacts with your ads will help you match their needs and preferences.
Designing your reward
With your prompt in place, you now have to determine which items you will offer.
1. Design rewards that will retain users. You can increase session time by offering users a variety of rewards throughout their app journey.
2. Find a value middle ground for your rewards. The rewards you offer should not be so valuable that they hurt your in-app purchases (IAPs), but valuable enough that users want to watch the ads in exchange for the reward(s).
Optimizing your rewarded ad placements can be the push you need to see a major revenue boost. For example, when CookApps, a video game developer in South Korea, tailored the placement of their rewarded ads — their revenue grew 86%. Follow these best practices to make sure users can easily find your ad.
1. Place the ad in an area that has high user traffic. One great place for your ad is the homepage, where 100% of your users are guaranteed to end up. You can also use pop-up opt-in prompts to increase discovery of your ad.
2. Place your ad somewhere crucial to the user experience. Through rigorous user testing, you can find which parts of your app have higher opt-in rates. Showing ads areas with higher opt-in rates leads to increased engagement and more revenue.
3. Leverage your IAP store to drive purchases. Rewarded ads as a great way for users to discover other in-app rewards that might not be attainable through ads. Rewarded ads can also help you bring awareness to new app features — such as boosters, supplies, or premium access.
When you’re ready to implement your reward ads, you can follow these best practices to help you organize and track your results.
- Test your ads. Ad performance can vary depending on prompt design and ad placement, apps categories, and user geographies, so try multiple designs and test them against each other. To find the best performing ad that also engages your users, try using Firebase to A/B test different designs.
- Check out the rewarded ad policies to make sure your ads are compliant. These guidelines can help you create ads that lead to a positive user, developer, and advertiser experience.
- Keep track of visibility and completion rates to track performance. Well-performing ads should have over 50% of Daily Active Users engaging, and an 80% completion rate.
Rewarded ads with smart segmentation
With smart segmentation, you can personalize your rewarded ad experience to different audiences. Smart segmentation uses machine learning to split your users into two groups — predicted purchasers and predicted non-purchasers.
- Show predicted non-purchasers more ads with better rewards. More ads with better rewards can increase engagement and boost revenue without risking IAP earnings. Make sure to randomize your rewards to ensure fairness within your community.
- Increase your LTV by showing ads to predicted non-spenders earlier. Avoid losing out on potential revenue by showing ads to predicted non-spenders earlier without cannibalizing IAP revenue.
- Relax frequency caps for predicted non-spenders to maximize revenue. A large percentage of users will never become purchasers — smart segmentation can extend frequency caps for those users.
Get inspired. See how other publishers have implemented rewarded ads in their apps.
Below is a list of further resources that might come in handy:
- AdMob Help Center: Overview of Rewarded Ads
- AdMob Help Center: Creating a Rewarded Ad Unit
- AdMob Help Center: AdMob Reports (insights into how much you’re earning and what impacts those earnings)
- Developer documentation: A/B Testing Your Ad with Firebase
- Developer documentation: Guide to rewarded ads for iOS and Android
Ready to create a rewarded ad?
If you’re looking for an easy way to get started, check out our developer guide to rewarded ads for Android or iOS. These guides have all of the code for a simple rewarded ad, so you can use them as-is or customize them to better match the look and feel of your app.