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Incentivized mobile ads: Can they really drive lifetime value?

By Michael Essany     Mar 4, 2015 in Business
Today, there are two metrics widely deemed to be among the most important of all in mobile advertising — click through rate (CTR) and video views.
The higher each of these is, the more money that follows. In fact, in the extremely competitive mobile gaming industry, the money we’re talking about is around $30 billion.
As you might imagine, with that much coinage at stake the biggest question that advertisers, marketers and mobile game developers are asking is this: What’s the best way to increase CTR and video views in order to get a bigger slice of that massive $30 billion pie?
For the in-app monetization and user acquisition specialists at Supersonic, the answer is simple; incentivized (or rewarded) video ads. These are sponsored video ads that appear when a gamer is enjoying their favorite mobile game or app. When prompted, they’re given the option to watch or not and, when they do, they’re rewarded with points or gear that they can use in their favorite games and apps.
And it works like a charm.
According to details gleaned in a recent VentureBeat interview with Supersonic CEO Gil Shoham, the average CTR for the rewarded videos that his company is placing is between 20 percent and 35 percent. Understandably, that has left many in the industry drooling. Shoham believes the reason is because rewarded videos give gamers and app users the opportunity to either opt-in or not, reducing the negative impact to almost nil and increasing the completion rate exponentially.
Shoham calls incentivized mobile a “safe route to take as far as the user experience.”
While the main push for Supersonic has always been the monetization of apps in general, the space where they see the biggest potential for growth is gaming, simply because with games you can offer highly specific incentivized videos that reward the player with credits they can immediately use in that game, increasing the likelihood that they’ll click through and watch the video ad.
So far, most of the ads are for film trailers and trailers for other apps, which in many cases lead to the viewer downloading and using the app that they just saw in the ad. It’s actually quite brilliant, as the CTR and video view numbers attest.
But some in the industry question whether rewarded or incentivized videos will actually have a positive effect on driving loyal users in the long run.
They reason that, while incentivized ads keep viewers engaged and are an excellent way for developers to drive revenues in the moment, is giving a few points or trinkets to gamers going to create true long-term loyalty, or just short-term attention?
At a time in the mobile ad industry where developers and advertisers alike are beginning to play long-ball — making strategic decisions designed to help reach a specific goal or numerous goals over a protracted period of time — many are wondering if short term gimmicks can really drive lifetime value. And if not, are said gimmicks even worth it, if not potentially counterproductive?
In recent years, studies have suggested that the increase in CTR that incentivized ads can give over-weighs the fact that there is an incentive other than the content. Consequently, savvy advertisers have learned to deploy a combination of incentivized and non-incentivized ads in any major campaign and then subsequently evaluate what the best long-term mix truly is for driving ROI.
In any case, Supersonic is definitely onto something and, in the last few years, has tripled its revenue every year. Today they employ more than 200 people and work with some of the biggest publishers in the industry, including Electronic Arts (EA). Not bad for a company that migrated from desktop to mobile less than three short years ago.
More about Supersonic, Mobile ad, Mobile advertising, incentivized mobile ad