Game Monetization Trends: Reward Video Ads Leading the Way
As we approach a new year, many industry experts make predictions about what lies ahead for game monetization. However, predictions can often be uncertain, heavily influenced by optimism rather than tangible insights. Instead of guessing, let’s focus on observable trends within game monetization, particularly the growing role of reward video ads. These insights are shaping monetization strategies and creating new opportunities for game developers in both mobile and desktop environments.
1. Revenue Decline from Pre-Roll Video Ads
Pre-roll video ads—those that play before a game or level starts—have long been a staple in game monetization. However, user engagement with pre-roll ads has declined significantly. As players have become accustomed to in-game ads, they now prefer ads that offer direct rewards for their time. As a result, completion rates for pre-roll ads have dropped to single digits, indicating that this ad format may no longer be effective on its own.
Why the Decline?
- User Fatigue – Pre-roll ads often interrupt the user’s flow, especially for players eager to jump directly into gameplay.
- Lack of Incentives – Users increasingly expect rewards for their time, and pre-roll ads offer no direct benefit to the player. Without an incentive, players are more likely to skip or ignore these ads.
If you’re a developer relying heavily on pre-roll video ads, consider integrating rewards with ads to maintain engagement and revenue. By linking ads to valuable in-game rewards, you can improve completion rates and CPMs (cost per thousand impressions). For developers not adapting to this shift, CPM rates and ad revenue are likely to decline as user preferences evolve.
2. Rise of Real-Time Bidding Technologies for Video Ads
The digital advertising landscape has seen a major shift toward programmatic buying, where software automates ad purchases, unlike traditional methods that involve human negotiations and manual processes. Real-time bidding (RTB) has become a crucial technology in programmatic ad buying, enabling advertisers to bid for ad impressions in real-time, often finding the lowest-cost option. While this benefits advertisers by allowing them to maximize their ad spend, it can conflict with publishers’ interests, as lower bids can mean reduced revenue.
How RTB Impacts Game Monetization
- Optimizes Ad Spend for Advertisers – RTB helps advertisers reach audiences at lower costs, prioritizing impressions that are most likely to perform well.
- Potentially Reduces Publisher Revenue – For publishers, however, RTB-driven low-cost impressions may not align with the goal of maximizing ad revenue. Traditional CPM rates can suffer as automated bidding often drives prices down.
To address these challenges, ad networks like AppLixir have started using RTB technology to optimize revenue for game developers. By layering RTB with additional filters and targeting capabilities, networks can enhance ad relevance and engagement, creating a win-win for developers and advertisers alike. As programmatic buying continues to expand, developers should look for ad networks that integrate RTB thoughtfully to balance both advertiser and publisher goals.
3. Stronger CPMs and Engagement with Reward Video Ads
Among various ad formats, reward video ads have become a standout performer in recent years. Reward video ads incentivize players to watch an ad by offering in-game rewards, such as virtual currency, power-ups, or exclusive items. This ad format is popular among users because it provides value without disrupting gameplay, and it benefits advertisers by ensuring high engagement and completion rates.
Why Reward Video Ads Are Effective
- High View-Completion Rates – Reward ads boast an impressive 87% view-completion rate, significantly higher than other formats. Players willingly watch these ads to gain rewards that enhance their gaming experience, and this voluntary engagement results in a positive experience for both users and advertisers.
- Synergy Among Users, Advertisers, and Developers – Reward video ads create a synergy where users gain valuable in-game items, advertisers connect with engaged audiences, and developers earn higher CPMs. This alignment of interests is hard to achieve with traditional ad formats, making reward video ads highly appealing.
As a result, advertisers are increasingly willing to pay premium CPM rates for reward video ads, understanding that these ads drive meaningful engagement and brand recall. Developers, in turn, benefit from the higher CPMs, which make reward video ads a profitable choice for monetizing games.
Key Takeaways for Game Developers
With the current trends pointing toward reward video ads and programmatic advancements, game developers should focus on integrating these approaches into their monetization strategies. Here are some recommendations based on the trends we’re observing:
- Shift Away from Standalone Pre-Roll Ads
As players become less tolerant of unskippable pre-roll ads that lack incentives, it may be time to re-evaluate their placement. Instead of standalone pre-roll ads, consider blending reward elements into your ad strategy to boost engagement. For example, turn pre-rolls into incentivized ads that offer users a small reward for watching, thus turning a potential irritation into a positive experience. - Leverage Real-Time Bidding Carefully
While RTB can benefit advertisers, it may lower publisher revenue without strategic management. Partnering with ad networks that balance RTB with guaranteed pricing models or targeting tools can help you capture high-quality impressions without sacrificing revenue. Networks like AppLixir, which prioritize publisher interests within RTB frameworks, can maximize earnings by optimizing impressions that deliver the most value. - Prioritize Reward Video Ads for Higher Engagement and Revenue
With reward video ads seeing high completion rates and premium CPMs, they represent a sustainable monetization strategy for developers. The positive interaction—where users receive rewards for their engagement—leads to higher satisfaction and retention. Implementing reward video ads at natural breaks in gameplay or offering them at moments when players need assistance can keep the experience seamless and enjoyable. - Monitor and Adjust Based on Player Feedback
While these trends are shaping the industry, each game is unique. Regularly gather player feedback to understand which ad formats resonate best. For instance, some players may appreciate the quick access that pre-roll ads offer, while others may prefer the tangible value from reward ads. Adapting your ad strategy based on this feedback will help you build loyalty and engagement.
Why Reward Video Ads Will Continue to Dominate Game Monetization
Reward video ads are becoming a preferred method for monetizing games across platforms due to their high engagement and synergy between users, advertisers, and developers. Here’s why reward video ads are likely to remain at the forefront of game monetization:
- Sustainable User Engagement
Reward ads are non-intrusive and offer players something valuable in return for their time, making them more sustainable for long-term engagement. Unlike traditional ads, which can cause user fatigue, reward ads foster a positive relationship with players who feel they’re gaining value through the experience. - Advertiser Interest and Higher CPMs
As advertisers see the benefits of reward video ads—such as high view-completion rates and increased brand recall—they’re willing to pay more to reach engaged audiences. Higher CPMs make reward video ads more lucrative for developers, helping to secure stable revenue streams. - Flexibility Across Platforms
Reward video ads work well on both mobile and desktop platforms, enabling developers to implement a consistent monetization model across various devices. With an increasingly cross-platform gaming environment, reward video ads offer flexibility and ease of integration, making them an attractive choice for developers seeking a unified monetization strategy. - Player-Driven Engagement
With reward video ads, players choose to engage, creating a sense of agency. This choice fosters goodwill, as users feel that they’re not being “forced” to watch ads but are instead rewarded for their participation. This player-driven engagement is invaluable in a competitive gaming market where retaining users is key to sustained success.
Looking Forward: The Future of Game Monetization
As game developers navigate a rapidly evolving monetization landscape, focusing on trends that prioritize user experience and meaningful engagement will be essential. Reward video ads are proving to be a powerful tool for maximizing revenue while respecting player satisfaction. Real-time bidding continues to offer promise, though its full impact on publisher revenue remains to be seen.
By embracing reward video ads, leveraging RTB strategically, and staying attuned to player preferences, developers can create a monetization strategy that balances profitability with user loyalty. AppLixir’s reward video ad platform is one option that aligns with these trends, providing solutions that enhance revenue without compromising the player experience.
For questions or insights on integrating effective reward video ads, reach out to us at info@applixir.com.
