More and more publishers are turning to rewarded advertising for their monetization.
The reason behind this is simple. When ads aren’t an interruption, but a choice, they perform better.
Today, rewarded advertising includes two main formats: rewarded video ads and offerwalls.
And there’s much talk about them.
Which one performs better? Which one should you choose for your app or game?
Read along to find out.
Rewarded Video Ads vs Offerwalls
Even though they fall under the same umbrella, “rewarded advertising”, and they are both opt-in ad formats, video ads and offerwalls work in different ways:
- Rewarded video ads are short ad videos that usually last between 15 seconds and 1 minute. They are placed strategically within a game, and players can choose to watch them when they need a power-up, like an extra life, in-game currency, etc.
- Offerwalls resemble more of a marketplace, where players can look for a task to complete in order to earn in-game currency or any other in-game benefit. Offerwalls can either reward players for completing a single action/a set of actions, or for the time spent playing (see Multireward vs Play2Earn to learn more).
So, though they both require user engagement, offerwalls need a much more active effort.
For example, to get the reward, players need to complete a level, download an app or start a free trial for a service. For this reason, they appeal to a player who is usually more engaged.
Many studios and game developers often use rewarded videos and offerwalls together, making it easier to reach users with different behaviors and engagement styles.
Monetization Performance
In a previous article, we analyzed rewarded ads from a UA and monetization point of view, and we found out that it’s the ad format that delivers the best results.
However, these results may vary depending on which format you choose, either rewarded videos, offerwalls, or both.
Let’s dive deeper into this.
Engagement
Thanks to their strategic placement, rewarded video ads have one of the highest engagement rates in the industry, because they reward players when they need it most: after a failed level, when they’re running out of lives, etc.
According to Unity’s Mobile Growth and Monetization Report, the top genres for rewarded video engagement are Word (38.4%), Role Playing (37.6%) and Casual (36%), while Casino, Sports and Word are the genres that get the most repeated ad watches.
eCPM (Revenue Per 1000 Impressions)
If we compare rewarded ads with other ad formats, we see that their average revenue per 1000 ad impressions is higher.
But there’s a big difference between rewarded video ads and offerwalls:
- On average, rewarded video ads have an eCPM of $14.65. To put things in perspective, the average eCPM for interstitial ads is $9.18, while banner ads sit at $0.42.
- Offerwalls tell a different story. The average eCPM for offerwalls is around $400! And this figure can even peak at $1500 for certain categories.
How is it possible?
Offerwalls are known for attracting high-quality users, which means users who show higher retention and can bring higher LTV.
For this, advertisers are willing to pay more to acquire them, and publishers who monetize through offerwalls benefit from a high eCPM.
Ad Revenue
Offerwalls also tend to generate higher ARPDAU for engaged users compared to rewarded videos.
Looking at Unity’s data, we see that the average monthly ad revenue per converting user is:
- $0.15 for rewarded video ads
- $4.04 for offerwalls
- $13.27 for IAPs
This means that an offerwall can generate around 30% of the IAP’s value.
This is a great result, considering that it mainly comes from non-paying users.
Freemium environments are where offerwalls perform best.
When a user base is made mostly of non-paying users who stick with the free option, having an offerwall can increase their engagement, because they are more likely to complete offers to get in-app benefits.
In one of our recent projects, ARPDAU increased by +66% after the implementation of MyChips offerwall, since users would engage with the offers to get more in-app currency.
Rewarded Video Ads and Offerwalls: Key Differences
| Rewarded Video Ads | Offerwalls | |
|---|---|---|
| Format | Opt-in ad, short video | Opt-in ad, marketplace of tasks |
| Engagement | High, between 25% and 38%, depending on game genres | Lower than rewarded videos, but targets highly engaged users |
| eCPM | Average of $14.65 | Average of $400 |
| Ad Revenue (monthly average per converting user) | $0.15 | $4.04 |
Conclusion: Opt for a Hybrid Strategy
All things considered, a hybrid strategy seems like the best solution.
And that’s also what most experts recommend: to use both formats together as part of a hybrid monetization mix.
- Rewarded videos provide a steady, broad revenue with minimal friction.
- Offerwalls add a high-value boost of revenue from engaged users.
For example, you can segment your users (new vs engaged) and present the right ads at the right time. You can start with videos for new users and users who won’t engage for more than a few minutes, then introduce the offerwall for heavy spenders.
In this way, you make sure to capture almost your entire user base.
