WHY ARE APP DE­VEL­OP­ERS TURN­ING TO­WARDS RE­WARD ADS?

PCQuest - - DEVELOPER NEWS - - Au­thored by Raghav Bin­dal, Pub­lisher Part­ner­ships Man­ager at GreedyGame

About 10 years ago in 2008 Google and Ap­ple launched their app stores which lead to the wide­spread pro­lif­er­a­tion of ap­pli­ca­tions that be­came avail­able to the masses. It is about at this point that re­ward-based ad­ver­tis­ing came into the pic­ture.

Ap­pli­ca­tion de­vel­op­ers were cau­tious about the price-sen­si­tiv­ity of ap­pli­ca­tions as well as the ex­tent of mone­tary ex­pense they wanted to in­vest for an of­fer­ing in such a nascent mar­ket. In ad­di­tion piracy of ap­pli­ca­tions was also a ma­jor

concern.

One way to mit­i­gate the risk of re­turns was ad­ver­tis­ing and a form of ad­ver­tis­ing which re­ally worked and con­tin­ues to do so was re­ward-based ads. The con­cept of re­warded ad­ver­tis­ing is quite easy to un­der­stand- Users can ei­ther choose to pay for spe­cific con­tent and in-game cur­rency or they can choose to en­gage with an ad.

Th­ese ads try to fill the gap and serve the pur­poses of pub­lish­ers, users, and ad­ver­tis­ers. It al­lows pub­lish­ers to mon­e­tise users who don’t want to spend on games, are un­able to spend on games or those that want to but do not have the means to do so ( The only way to mon­e­tise ap­pli­ca­tions through pur­chases for many de­vel­op­ers is via credit cards in many coun­tries and yet a sig­nif­i­cant num­ber of users are un­banked). With the right tar­get­ing, an ad­ver­tiser can reach and grab the at­ten­tion of the right user and cre­ate aware­ness about its brands. From a user’s per­spec­tive too if he or she doesn’t want to spend on an app or wants to try and ex­pe­ri­ence the prod­uct be­fore spend­ing this for­mat is ideal. They also like this for­mat over many other forms of in-app ad­ver­tis­ing be­cause it is a bet­ter value ex­change model for them.

It comes as no sur­prise then that a sur­vey of more than 2000 de­vel­op­ers & users found that a large ma­jor­ity pre­ferred this as the mode of ‘pay­ing’ for ap­pli­ca­tions.

Also as per the sur­vey most users at least have some form of en­gage­ment with re­warded ads.

The high in­ter­ac­tion with such ad­ver­tise­ments show why ad­ver­tis­ers are will­ing to spend high amounts on this for­mat to gen­er­ate in­ter­est in their prod­ucts. In­deed one re­port show­ing global trends in mo­bile ad­ver­tis­ing by Smaato has high­lighted re­warded videos as the fastest grow­ing for­mat in cer­tain types of ap­pli­ca­tions. Re­warded video ads are also said to have im­pres­sions al­most dou­bling (96%) quar­ter over quar­ter, ad spends jump­ing a mam­moth 153% and eCPMs in­creas­ing by 48%. This rise is largely driven by gam­ing apps. Ad spend­ing on re­warded video in gam­ing apps in­creased vir­tu­ally 2 and a half times (242 per­cent).

In the cal­en­dar year 2017, in-app mo­bile ad spend reached about $45 bil­lion, up $11 bil­lion from the pre­vi­ous year. As long as re­warded videos con­tinue to pro­vide a strong value propo­si­tion to all 3 par­ties (De­vel­op­ers, Users and Ad­ver­tis­ers) they will con­sti­tute a sig­nif­i­cant slice of this multi-bil­lion dol­lar pie.

RAGHAV BIN­DAL, Pub­lisher Part­ner­ships Man­ager at GreedyGame

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