There is not much in common between these two formats. However, they are both extremely effective for generating ad revenue in their own ways. Rewarded videos are an essential part of user retention, while banners are great for wider audience reach. In this article we’ll discuss what’s the best way to place these formats in an app.

Rewarded video for the win

Rewarded video ads became a sensation over the past few years. It’s a dream ad format for everyone. App users get to choose an engaging ad that comes with a reward, publishers increase their revenue since this format has the highest eCPMs, and advertisers get positive ROI and bigger exposure for their brands.

First of all, let’s get to those eCPMs. In our latest Performance Index we analyzed rewarded video format in 3 regions USA, Western Europe and Eastern Europe. Rewarded videos’ eCPM continues to grow, even though this year’s progress is a bit slower compared to 2018. For example, the U.S.’s rewarded videos on iOS and Android both saw their eCPM increased by 13% to a high average of $15.18 and $12.68 respectively.

The format flourishes in game applications where it became the easiest way to attract and retain users eager to stay in the game. Since it’s an integral part of the app’s success, the first tip for developers is to think through where rewarded videos would naturally fit at an early stage of designing the game. Rewarded videos shouldn’t feel like an interruption or an obstacle in the game. If you incorporate rewarded videos to look like a logical sequence in the game, you’ll surely receive positive response from users.

Rewarded videos for gaming apps

The reward offered for watching the video should be strongly connected to the user’s goals in the game and be valuable to them. For example, after watching one a user may get more time to complete a game task, purchase more game currency for in-game purchases, get a second chance after failing a level, etc.

An example of a useless reward could be an offer of a single coin when a user needs hundreds of them to buy a necessary gaming unit to continue the game. The quality of the reward should be more important than its quantity.

Let’s take a look at Archero game that handles rewarded videos really well. To progress in the game, a player needs energy that is re-chargeable on its own, but you have to wait. Alternatively, when a player is out of energy and dies, they receive an option to watch a video or several videos in a row to get enough energy to continue playing confidently.

Archero lets users earn more energy by watching a rewarded video

Rewarded videos for non-gaming apps

Do non-gaming apps even need rewarded videos? Even though rewarded videos flourished in game applications, this format has so much potential outside of games and can boost ad revenue for apps that primarily rely on subscriptions or in-app purchases. Since rewarded videos are in an opt-in scenario, there is a high probability that a user would find this ad format a positive reinforcement.

An excellent example of rewarded videos in non-gaming app is the popular gay social networking app Grindr. The number of profiles users can see is limited, unless they pay for a subscription. Free users, however, can unlock more profiles and therefore chat with more people by watching a rewarded video.

Grindr limits the number of profiles free users can view but provides an option to unlock more by watching a rewarded video

In general, giving users a sample of paid gated content within an app is perfect for rewarded videos as it also helps increase the likelihood of the user making a purchase. However, as with gaming apps, you have to maintain a balance — the value exchange should be reasonable for users.

Summary of rewarded video benefits

Easy integration

High retention rate ➜ increased revenue from in-app purchases

Traditionally high CTR and eCPM

The format is advantageous to everyone—users, app developers and advertisers

Hello banner, my old friend

Even though banners are not as engaging or lucrative as rewarded videos, they are ideal for wider reach and stable revenue. Up until this day it is the most common mobile advertising format that first emerged in web marketing. It continues to be a steady source of revenue for publishers.

Due to the high frequency of impressions, banners are one of the most stable formats out there, especially when it comes to ARPDAU. Even though users have developed the so-called “banner blindness”, publishers are guaranteed to profit from the display of banners, whether the user scanned the information on the banner or not. And it’s fairly easy to produce for advertisers (and publishers if they do a cross-promo).

According to our research for Performance Index, banners are still important for revenue base in 2019—they account for around a quarter of the ad revenue share. However, on Android in Western Europe, its eCPMs decreased by 27% to an average of $0.16 from H2 2018 to H1 2019 compared to the same period the previous year, and decreased by 15% on iOS. Interestingly, in the U.S. its eCPMs increased by 13% to an average of $0.62 on iOS.

Banners are usually placed in the upper or lower margin of the screen. Since the advertising space is limited, banners have a better chance of attracting attention if they have a very concise and compelling message. Despite the ease of handling banner placement, it’s important to remember that banners should not be placed where users might accidentally click on them. For example, users might click on the banner, because there is an essential app button or menu item that is located too close to the banner.

In Relaxing Melodies app banners are smartly placed in the lower part of the static screen at a safe distance from menu item buttons

Generally, a small banner is good for using in applications with a long session (more than 3 minutes) and a static screen. These can be utility applications or single-screen casual games. The average CTR for this format is 0.5-1.5%.

Summary of banner benefits

Steady source of ad revenue

Low-budget ad format ➜ high supply of banner ad fills

Looks good on the screens of all sizes

Easy to integrate

By the way, more inventive ad formats like MREC (Medium Rectangle), Interstitial and Native ads all came from banners. They are an extended version of banners if you will.

How to incorporate banners and rewarded videos in your app

Since every app is unique, we would like to share a summary of what we see as best practices for rewarded video and banner within the space of one app.

Make sure that rewarded videos provide a real value for the user (in exchange for watching a video, user gets enough of a reward to keep using an app) and are placed logically within an app (when a player loses/dies in a game or reaches gated content).

Consider offering a number of rewarded videos outside of gameplay or the main app function to watch voluntarily, irrespective of events in the app. This will likely help increase user retention (for example, you can place a tv icon in the app menu or map for additional rewards).

Despite its allure rewarded videos can be repetitive, so adding other ad formats like banners actually helps create diversity. Users are used to banners and don’t find them disruptive anymore.

Carefully think through the banner placement. You can place banners on app pages that deal with settings, volume, app shop, etc. Those are the spaces where users do not feel agitated to make a decision or get frustrated, because they are interrupted while taking an important action.

Reduce banner frequency and work with ad networks or DSPs that choose to work with trustworthy brands. Banners definitely should not be abundant and it’s better when they’re simple and can be easily closed.

Most importantly, remember that ads are a way for users to continue enjoying your app for free and to support in-app purchase incentives. They are not meant to bombard users for the sake of ad view stats.

If you are curious to learn more about how rewarded videos, banners and other ad formats perform in 2019, download our most recent Performance Index that focuses on in-app ad revenue and provides insights for mobile app publishers on the top earning mobile ad networks, ad exchanges and DSPs, along with their eCPMs, the average eCPM of each country globally and the eCPM trends of mobile ad formats on both iOS and Android devices.

Boost your monetization efforts

In case you’re looking for a new way to integrate ad formats into your apps, we offer two products that our Stack team developed with publishers’ interests in mind.

For an all-in-one ad mediation platform, consider Appodeal with its ample tools and features (Demand Control Center, user segmentation, A/B testing, cross-promotion, and many others) to make sure those ads boost your app’s revenue.

If you’re looking to top off your existing ad monetization setup with the best quality ads for higher revenues, check out our ad exchange BidMachine. With in-app header bidding technology BidMachine connects you to the biggest DSPs and best prices for your app inventory. Both Appodeal and BidMachine are simple to integrate via SDK (more options are available for BidMachine).