Tapjoy’s latest study explores the impact of rewarded ads on IAP, retention & engagement
Tapjoy’s latest Maximum Impact Report, now available for download, explores the impact that rewarded ads have on key user behaviors, such as the likelihood to make an in-app purchase (IAP), average user spend, 30-day retention, and average daily sessions.
Our June, 2017 Modern Mobile Gamer report found that mobile gamers overwhelmingly prefer rewarded ads to mandatory ads, such as pre-roll videos, by a 4-to-1 margin. This validates the effectiveness and value of the rewarded format — both for the advertiser in captivating an engaged, opt-in audience, and for the developer in integrating a form of monetization that users prefer, while introducing players to the app’s in-game economy. But we wanted to go a step further and explore whether rewarded ads can benefit developers in other ways, namely:
- Are those who engage with rewarded ads more likely to make an in-app purchase?
- Do users spend more after engaging with rewarded ads?
- Are users who engage with rewarded ads more likely to continue using an app?
- Do users engage more frequently with an app after completing a rewarded ad?
The findings revealed that users who engage with rewarded ads are not only more likely to make a purchase, but they also spend more. The study found that those who engage with rewarded ads are 4.5 times more likely to make an in-app purchase than those who do not. In addition, user spend significantly increases after users engage with an ad — by an average of 326 percent across all apps studied.
“Some app developers fear that giving their users the option to earn currency through rewarded ads will reduce the likelihood of IAP or negatively impact user spend. Our data shows that not only do developers have no reason to worry about such cannibalization, but rewarded ads are actually conducive to IAP,” said Benjamin Chen, SVP & GM, Developer Relations at Tapjoy. “Our hypothesis is that rewarded ads serve as an initial introduction to an app’s in-game economy or premium content. Once users get a taste for it, they want more — and they’re willing to pay for it.”
Tapjoy’s research also revealed that rewarded ads appear to have a positive impact on user engagement metrics, such as 30-day retention and average daily sessions per user. Across all apps studied, the average number of daily sessions per user increased 34 percent among those that completed at least one rewarded ad, while 30-day retention increased 3–5x among those who engage with rewarded ads.