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Four Tips for Making Rewarded Video Pay

by Pete Schlaefer on Sep 18, 2015

Rewarded video is an incredibly popular ad format, but why? Developers like rewarded video because it generates revenue, and players like it because it’s opt-in advertising and offers them something valuable in the game for their time. They can either watch the video or not, and if they choose to, then they know exactly what they’ll get in return.

But getting the most out of your rewarded video campaign takes some finesse. If you’re considering using rewarded video in your monetization strategy, here are a few tips for getting it right.

Tip #1: Use rewarded video early and often.

Rewarded video clearly shows players the value of currency in the game, so you want to demonstrate that to the player as soon as they start playing, and often. A lot of people worry that rewarded video will cannibalize IAPs because they think that, given the option, players will always prefer not to spend their own money. But it can be the reverse: rewarded video generally increases IAPs because it gives the player a taste of what’s possible — and just how valuable the IAP items are that you’re offering.

Tip #2: Keep a close eye on when you’re getting diminishing returns.

Every game is different, but it’s generally the case that after a certain number of rewarded videos shown, the impressions become less valuable. Imagine, for example, that you serve 20 people two rewarded video ads each. You’ll have served 40 other types of ads, and chances are, these 40 will be far more effective than 20 rewarded video ads served to two players. In each case, it’s the same number of ads served, but you’ll see drastically different results. You should continually test and optimize showing one more rewarded video per user per day against other metrics you care about, like retention and IAP. Track all these closely with analytics.

Tip #3: Place rewarded video in different places in your game.

To make sure you’re getting the right number of ads per player per day, be sure to place the rewarded video in multiple places in your game. This way, no matter where your players are in the game , they interact with rewarded video, and you can generate more impressions. Good places to place rewarded video include natural breaks in the game like between levels, or in the store where players are browsing items. Make the options clear to your players : “Wait 20 hours or watch this video now to gain instant access to Level 7.”

Tip #4: Continually test the amount of in-game currency you give away.

Testing the amount of currency you give away as a reward is important not just because the right amount maximizes your ad revenue, your IAPs, and your retention, but because the “right” amount can change over time, and you want to manage accordingly. You should also find the sweet spot of how much currency you offer so you give players a good idea of how IAPs can make their experiences better, but not so much that you devalue it. Test, run cohort analyses often to make sure you pull all the right levers to find the happy medium.

So if you haven’t already, get on the rewarded video bandwagon, but be smart about it: remember that properly executed rewarded video can also increase IAPs; place video often, and strategically, in your game; and do the analysis to optimize your ad revenue against other important metrics, including IAP, revenue, and retention.

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Pete Schlaefer is AppLovin’s Vice President of Growth Partnerships.

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