Debunking the Myths: Incentivized Ads

July 14, 2016 | Article written by Carly Morris

For as long as mobile marketing has been around, there has existed a divided stance on incentivized vs. non-incentivized strategies. Incentivized advertising has long been perceived as somewhat less than authentic when compared to the traditional non-rewarded route. As a result of this stigma, many myths and misconceptions have arisen, leaving some marketers weary of experimenting with the strategy altogether.

Incentivized ads, also known as rewarded or sponsored ads, work by rewarding a user for completing a desired engagement action. Incentivized actions can include watching videos, rating content, referring friends, completing forms, and even installing new apps. When users complete one of these actions, they’re granted virtual rewards, like product discounts, upgrades, new abilities, or extra lives.

Both incentivized and non-incentivized ads aim to promote your app, brand, product, or service, but incentivized ads often excel because they can guarantee desired engagement actions.

All of this sounds like an ideal mix, so why does rewarded advertising get a bad rep?

Myth #1: Incentivized ads drive low quality conversions
In the earlier and less sophisticated days of incentivized ads, many marketers focused on incentivizing app installs exclusively. While providing an extremely quick and cost effective means of boosting acquisition, incentivized installs can also come at lower quality, with many users immediately abandoning their new apps after reaping their rewards.

While this is still a popular strategy for some chart-climbing burst campaigns, incentivized strategies on the whole have come a long way since.

First and foremost, advances in technology and big data collection have allowed for much more accurately targeted and data-driven campaigns on both incent and non-incent platforms. This alone has been a huge step in helping marketers reach past this quality stereotype, and embrace a more holistic balance of quality and quantity.

Furthermore, marketers can incentivize countless engagement actions beyond just installs. While incentivizing installs can equate to rewards for low quality abandoning users, focusing on more organic engagement actions, like friend referrals, can drive much better quality results in the long run.

Myth #2: Incentivized ads disrupt the user experience
Incentivized ads have progressed and developed just like non-incentivized ads, and as they’ve become smarter they’ve also become more organic and natural.

While of course ad impact is dependent on strong creative testing and optimization, incentivized ads also have the added strength of context on their side. Because rewarded ads are inextricably linked to the content of the user’s experience, (eg. gaining more lives or coins in the game being played) they act as extremely relevant native-style ads, even if they’re not completely pertinent in content.

Moreover, incentivized ads create an environment of a more equal exchange. Because users actively benefit from the rewards in these ads, they’re much less likely to perceive them as a hindrance to their online experience. This not only makes the user more receptive to seeing your mobile ads, but can also help foster brand affinity through positive “gift giving” association.

Myth #3: Anything incent can do, non-incent can do better
The reason that both incentivized and non-incentivized strategies have continued to exist as successful and separate entities for so many years is because they each bring their own unique and legitimate strengths to the table. Each one offers something that the other simply cannot.

Now more than ever, one of the biggest strengths of incentivized ads is the guarantee that ads are actually being seen. With the rise of bots, click fraud, and ad blockers, advertisers and publishers alike can take comfort in this steady stream of revenue, and the guarantee that their ads are reaching real people.

Plus, according to a new report from AppsFlyer, only about 5% of mobile users actually make in-app purchases. Of course everybody wants premium content, but many users may not be willing to pay for it. For this, rewarded advertising creates an ideal compromise, offering users a way to access premium content without having to pay for it. These, for example, are two things that non-rewarded ads just can’t offer.

When it comes to incentivized advertising, most myths are just that: myths. As in most cases, the perceived pitfalls of rewarded ads don’t lay within the motivation itself, but in a lack of understanding of the best practices and optimization needed to mold the strategy to fit the advertiser’s needs.

Like any other mobile strategy, deciding whether incentivized ads are right for you depends entirely on your campaign goals and resources. But, it’s also important to remember that it doesn’t have to be an either/or situation. Many great campaigns use incentivized and non-incentivized strategies in tandem as a way to get the best of both worlds.