Reward-Based Advertising: Unlocking the Power of Customer Engagement and Retention -

Reward-Based Advertising: Unlocking the Power of Customer Engagement and Retention

5 MIN. READ

I’m sure you’ve heard of reward-based advertising, an effective way to engage with users and incentivize them to install your app via various rewards. Let’s explore the importance of reward-based advertising in customer engagement and retention, what they are, how they benefit businesses, and the best practices for implementing them. Go, go, go!

What is reward-based advertising?

Reward-based advertising is a type of mobile advertising that offers users an incentive in exchange for their time or engagement. These incentives can come in the form of virtual currency, discounts, exclusive content, or other rewards. According to a survey conducted by Unity Technologies, 71% of mobile gamers prefer watching reward-based advertising to receiving in-app rewards.

Rewarded Ads

Rewarded ads refer to a type of advertisement where users are given the option to watch a video or interact with a playable ad in return for a reward within the app. For instance, when players reach a crucial point in mobile games, they may die and have to restart from the beginning. This can be frustrating, and users often wish to continue playing without starting over.

  • First, the user is prompted with an option to view an ad in exchange for a reward.
  • If they opt-in to watch the ad, they will receive a reward upon completion of viewing the ad, such as an extra life or power-up. 
  • Once they use the reward, they can continue playing the game from where they left off. Users are eager to keep playing, so they frequently complete the entire process. 

Rewarded ads are helpful in terms of balancing monetization and user experience. They are popular among users as they can obtain in-app benefits, such as faster progression or paid items, by investing their time rather than money. Moreover, the opt-in approach of rewarded ads empowers users to control their ad experience, making it a safe integration option that does not interfere with the user experience. 

Rewarded Engagement (Offerwalls)

Offerwalls are ads that offer users rewards for completing a specific action, such as downloading another app or filling out a survey. These ads can be effective because they give users a tangible reward for their time and effort. Similar to rewarded ads, offerwalls are also fully user-initiated. Players can choose different offers from various apps, such as signing up or reaching a certain level to get rewards. AppSamurai’s rewarded engagement campaigns are conversion-based, meaning that app owners pay only for completed tasks but still earn revenue from the time players spend in the app. 

Offerwalls should be implemented carefully to ensure users don’t feel that the rewards are not worth the effort or that the ads are misleading. 

Success Stories

Several businesses have successfully used reward-based advertising to engage and retain customers. For instance, Lyft, a ride-hailing app, offers users ride discounts in exchange for watching ads. 

Similarly, Hulu, a streaming service, allows users to watch ads to access premium content.

Spotify also benefits from reward-based advertising by allowing users to download and stream music for free with ads. 

Lastly, the famous language lessons app Duolingo puts rewarded ads into practice by enabling users to gain ‘’hearts’’ that unlock new learning material.

How Reward-based Advertising Benefits Your Business?

Reward-based advertising offers several benefits to businesses, including increased customer engagement and retention. By offering users incentives, apps can encourage them to spend more time on their apps, thereby increasing engagement and the app’s stickiness by offering users a reason to return to the app.

Reward-based advertising can also help businesses differentiate themselves from competitors. By providing unique and valuable rewards, apps can set themselves apart from others. 

Another benefit of reward-based advertising is that they offer a cost-effective way to acquire new customers. Businesses can attract new users to their apps or service by offering rewards. This can be particularly effective for startups and small businesses that may not have a large marketing budget.

Best Practices for Implementing reward-based advertising

To implement reward-based advertising effectively, businesses should follow these steps:

  1. Identify the most suitable reward for your audience and app: The reward should be valuable enough to motivate users to engage with the ad, but not so valuable that it becomes too expensive for the business to provide.
  2. Design a user-friendly and engaging ad experience: The ad should be visually appealing and engaging, and the reward should be communicated to the user.
  3. Set realistic goals and measure success using relevant metrics: App owners should set clear goals for their reward-based advertising campaign and track progress using metrics such as engagement rate, retention rate, and return on investment (ROI).
  4. Test and optimize the ad experience regularly: App owners should continually test and optimize their reward-based advertising campaign to ensure that it is effective and provides a positive user experience.

However, businesses may face challenges while implementing reward-based advertising. For instance, users may find the ads intrusive, leading to negative feedback. Additionally, app owners may need help balancing the rewards offered with the cost of the rewards. By carefully planning and testing their reward-based advertising campaign, businesses can overcome these challenges and reap the benefits of this powerful tool.

Final Thoughts

Reward-based advertising is a must-try strategy if you want to keep your customers happy and coming back for more. By offering incentives, you can keep your customers engaged, stand out from your competitors, and make them feel like VIPs. But hold your horses, don’t just dive in blindly! Planning and testing are crucial to ensure a positive user experience.

So, what’s the bottom line? Incorporating reward-based advertising can unlock the power of customer engagement and retention. Follow best practices and continuously optimize your reward-based advertising campaign, and you’ll be on your way to reaping the benefits and staying ahead of the game!


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