When it comes to integrating rewarded video ads, many mobile publishers are hesitant for fear of cannibalizing IAP revenue. Despite the fact that top publishers like Supercell have included them as part of their overall monetization strategy, publishers still fear that players will grind out premium currency through video views that would have otherwise been purchased as an IAP.
Over the last few months, we’ve been conducting a study involving over 6M players across multiple freemium games in our network that offer both IAPs and rewarded video ads. Our goal was to find a conclusive answer as to whether or not engagement with rewarded ads has a positive or negative effect on conversion and revenue.
Key Take Aways
Rewarded video is a gateway to monetizing players through IAPs. A Fuse study of 6M players found:
- 37% of paying players engaged in rewarded video
- 54% of those players watched rewarded video first before making an IAP
- 4.7% of players who watched a rewarded video made an IAP – 6X more conversions than from those who did not
- Those who watched rewarded video made more IAPS and generated higher ARPPU
- Players who watched rewarded videos made 24% more purchases and spent 21% more money than those paying players who did not watch rewarded video
Rewarded video ads allow players to watch an in-game video in exchange for virtual goods or in-app gifts. While some developers have concerns about negatively impacting player engagement, this large-scale Fuse study shows the clear benefits of using rewarded video advertising in mobile games.
Fuse looked at 6M players as a sample set across a variety of mobile freemium games. Of the 6M players, 9% interacted with rewarded video during their player lifetime and 1.2% made an IAP. The study found that 37% of paying players engaged in rewarded video illustrating that paying players welcome interacting with this form of ad. As well, 54% of those players watched rewarded video first, indicating it is a gateway to monetizing with IAP. Of those who did not watch a rewarded video, only 0.7% made an IAP.
In comparison, 4.7% of players who watched a rewarded video made an IAP. That’s 6X more conversions from players who watched rewarded video than from those who did not, thereby debunking the myth that rewarded video cannibalizes IAP monetization. While those who watched rewarded video took slightly longer to make their first IAP (4.67 days versus 2.94), they went on to make more IAPs (3.08 versus 2.49) and generated higher average revenue per paying user (ARPPU) of $18.95 versus $15.60.
|Paying Players||Days to 1st IAP||# of IAPS||ARPPU|
|Didn’t Watch RV||2.94||2.49||$15.60|
The study confirmed players who watched rewarded videos made 24% more purchases and spent 21% more money than those paying players who did not watch rewarded video. For publishers, rewarded video represents an excellent way of further monetizing players without any negative impact on engagement or IAP monetization potential.