October 25th, 2017

Rewarded Advertising: Unlocking Premium Content within the Programmatic Ecosystem

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Guest blog by Steve Smelt, Tapjoy Global Director, Programmatic

There appears to be no stopping the programmatic advertising train. eMarketer’s latest estimates project that nearly 80% of all US digital display ad dollars will be spent programmatically this year, accounting for approximately $33 billion. That’s a 28% increase over 2016. By 2019, nearly $46 billion, or 84% of the market, will transact programmatically.

And yet, programmatic is not without its challenges. The very things that make it great also present obstacles that many of us are still trying to solve. While the industry certainly has its challenges in terms of fraud, complexity and transparency, a poll conducted by Strata found that the top fear about programmatic advertising among ad agency professionals had to do with inventory quality.

For many of these advertisers, the logic dictates that because programmatic ads often falls on the less expensive side of their ledger, they likely represent remnant space, or less-than-desirable placement. In some cases, that logic holds water. But private marketplaces (like the Tapjoy Private Exchange), which tightly control their publisher networks and can therefore provide quality assurance, are gaining prominence, with an estimated participation from two-thirds of today’s brands.

Using a private exchange, however, is only part of the solution. For truly premium ad inventory that is available programmatically, I would argue that one of the best places a brand can look is to rewarded ad platforms.

Rewarded ads put consumer needs first

The main reason why rewarded ads are so effective at engaging consumers is, first and foremost, a matter of consumer choice. Today’s mobile, tech savvy audiences simply prefer to engage with rewarded ads over any other types of ads. Tired of being bombarded and interrupted by traditional ad formats such as pre-roll videos and auto-play banners, consumers are demanding a new advertising paradigm — one that represents a more balanced exchange of value between them and the advertisers seeking to reach them.

Rewarded ads allow users to initiate and engage with ads on their own terms, and in turn participate directly in the value exchange between advertisers and publishers. This sentiment was reflected in the latest Mary Meeker Internet Trends Report, which found that the vast majority of consumers say they feel negatively about intrusive advertising, such as pre-roll videos and mobile app pop-ups, while nearly 7 out of 10 say they actually like video ads that offer some type of in-app reward.

Similarly, a Tapjoy study conducted earlier this year found that mobile gamers prefer rewarded ads by a 4-to-1 margin over mandatory ads. The study also found that videos are far and away consumers’ favorite type of rewarded ads on mobile — favored by at least 6X over playable ads, app installs, surveys and other types of advertising offers.

In fact, mobile consumers not only prefer rewarded videos, but are willing to watch lots of them. We found that more than half of those surveyed — 51 percent — said they would watch at least four videos per day in exchange for a reward. Thirty-seven percent said they’d watch six or more videos per day. That’s remarkable considering how challenging it is to convince those same consumers not to skip through a 30 second pre-roll

Freemium publishers drive high engagement

There’s another factor driving high engagement for rewarded video ads, and that’s the type of publishers who run them. Rewarded advertising is driven by and inextricably linked to the freemium model, in which enables publishers to offer their apps for free, while driving monetization through advertising for in-app purchases. Rewarded ads generally allow users to unlock content, in-app currency, or other premium offerings within the app, therefore fueling user engagement, as well as monetization. The model is so advantageous that the mobile gaming industry has become dominated by freemium; in fact, every one of the top grossing iOS games is free to play.

These mobile environments are nothing if not “premium.” Gaming apps consistently rank among the top categories for mobile time spent and are by far the most popular category in the App Store by share of available apps. Mobile games offer such a positive user experience that 69% of gamers play at least three to five times per day, and nearly a quarter play 10 times or more. Mobile gamers also spend a lot of time playing: 71% play for an hour or more every day, and 21% play for more than three hours a day.

In short, mobile games offer the ideal place for advertisers to reach engaged, opt-in consumers through high quality placements. Mobile gamers are not only eager to opt-in to rewarded ads, but they’re actively rewarded in exchange for their time. No other format puts the user so front and center in controlling the value exchange with advertisers.

Quality drives programmatic growth

Ad agencies and media buyers are absolutely right to concern themselves with quality when buying mobile video ads programmatically.

“The scale and reach that programmatic buying provides makes little difference to the overall success of a campaign if the ads are run in unscrupulous environments,” said Michael Barrett, CEO of Rubicon Project. “Which is why quality and transparency are our primary concerns when selecting a partner. Tapjoy is the perfect match for Rubicon because its inventory offers advertisers the assurance that they will reach an engaged, quality audience through 100% opt-in, in-app placements. With Moat-verified 98% viewability, 90% completion rates*, the proof is in the pudding that the rewarded format simply works.”

For advertisers seeking both scale AND quality, look no further than rewarded ads and the Tapjoy Private Exchange. Contact our team to learn more.

*Tapjoy’s Moat Benchmarks, Q2 2017


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