Debunking the Myth: Rewarded Video and IAP Cannibalization

February 5, 2016

Diana Aquino

Rewarded_Video.pngWe’ve all heard the rumour – rewarded video cannibalizes IAP revenue.

When it comes to integrating rewarded video ads, many mobile publishers are hesitant for fear of cannibalizing IAP revenue. Despite the fact that top publishers like Supercell have included rewarded video ads as part of their overall monetization strategy, many publishers still fear their players will grind out premium currency through video views – currency that would have otherwise been purchased as an IAP.

But, is there actually any truth to support this myth? We couldn’t just sit back and let this rumour become the talk of the town; we had to get to the bottom of it. Over the last few months, we conducted a study of over 6M players across multiple freemium games in our network that offer both rewarded video ads and IAPs. Our goal was to find a conclusive answer as to whether or not engagement with rewarded ads has a positive or negative impact on IAP conversion and revenue.

 

Key Takeaways from our Study:

Rewarded video proves to be a gateway to monetize players through IAPs. Our study of 6M players found:
  • 9% interacted with rewarded video during their player lifetime and 1.2% made an IAP
  • 37% of paying players engaged in rewarded video
  • 54% of those players watched rewarded video prior to making an IAP
  • 4.7% of players who watched a rewarded video made an IAP – 6X more conversions than from those who did not
  • Players who watched rewarded video made 24% more IAPs, spent 21% more money than players who did not watch rewarded video, and generated higher ARPPU

Study-Results.png

 

The Verdict?

For publishers, rewarded video represents an excellent way to monetize players without any negative impact on engagement or IAP monetization potential. The proof is in the pudding, and these stats can’t be fudged.

In: Product

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