A recent study released by San Francisco-based in-app mobile advertising firm Tapjoy, in partnership with comScore, has found rewards-based advertising are significantly more effective, by most metrics, than traditional digital advertising.
The two-year long study asked nearly 25,000 participants (including a control group) to examine 14 campaigns across a wide variety of industries, including brands such as Olive Garden, Dodge, LEGO and Sephora.
The study concluded that incentivizing users to view ads results in a more than seven-fold increase in awareness, twice the ad recall and four times the message association.
The study also found that this method of advertising leads to triple the brand favorability, 1.4 times the likelihood to recommend and more than double the purchase/consideration intent.
“We wanted to demonstrate how valuable it is, and this study definitely shows that,” said Steve Wadsworth, the CEO of Tapjoy. “Up and down the entire funnel, we’re able to impact the user’s engagement with a marketer that’s trying to get their brand message in front of a user.”
Wadsworth explains that when the app store first opened its digital doors, many games and applications charged users a download fee. Since that time, a majority of games and even some non-game applications have switched to a freemium model, where apps are free to download with additional features available for small amounts of money.
“But in the end, with the micro-transaction model, only 3% – 5% are actually buying something. So if 95% of my audience isn’t monetized, now I have an option to put ads in front of them,” he said, adding that rewards-based advertising allows users to obtain those in-app features by viewing ads instead of paying for them.
“Now you have an opportunity for an advertiser to not interrupt but facilitate a user’s engagement in a media experience, to be part of that experience in a way that they’ve never been able to be before, and be viewed by the consumer as further enabling of something they’re already doing in a valuable way.”
While Wadsworth said the study definitively confirms the effectiveness of this method of advertising, he suggests there are even more basic reasons why it is considered superior to traditional digital advertising.
As ad blocking and concerns about viewability continue to plague the digital advertising industry, he believes rewards-based advertising is an obvious solution.
“The rise in ad blocking highlights that a lot of advertising in digital is not resonating with the end consumer, whereas rewarded advertising is,” said Wadsworth. “They’re opting in, they’re watching to completion, it’s facilitating the engagement with what they’re already doing, the advertiser is part of that facilitation and therefore they’re the hero.”
