For over a decade, apps have found success monetizing with offerwalls, an in-app advertising unit that acts like a mini-store, listing multiple “offers” that users can complete in exchange for receiving an in-app reward. The user gets full control over which offers they engage with and how often. Today, developers see record earnings from this ad unit - eCPM in the US can reach $1,500 and average $400 across genres. Per user, monetization rates range from $0.07 to $0.33 according to MarTech Series.
Only recently, however, have apps beyond gaming realized the importance of this sort of value exchange. Offerwalls drive revenue and engagement by allowing users to get value from your app without having to pay for an in-app purchase or subscription, meaning your app should already rely on a functioning virtual economy. The offers, after all, function as sources of hard currency without the price tag.
Dan McAdams, Sr. Director, Developer Relations at Tapjoy, shares his insights on why apps should implement an offerwall and how you can maximize the success of the ad unit.
Why implement the offerwall in your app
Implementing an offerwall has a proven positive impact on engagement and revenue, and delivers high eCPMs for apps. The ad unit ensures you’re monetizing each and every user in your app, but how?
Users may be resistant to pay, but not to engage with ads
With a free-to-play or subscription monetization model, users expect to gain free entry into your app before being hit with some sort of cost requirement. Users also understand that a lot of premium features will be behind the subscription wall, and they don’t always intend to spend money for access. Users do, however, expect to be able to engage with ads in exchange for rewards or additional content. Enter the offerwall.
Offerwalls are completely opt-in and require users to actively seek out the ad unit, meaning it doesn’t disrupt the user experience, but gives each user the opportunity to enhance their journey through your app whenever they want to. With hundreds of ad engagements, or “offers,” to choose from at any given time, users have everything they need to continue interacting with your app when they run out of coins, lives, etc. This means users can remain in your app in the long-term, without dropping a dime.
With users familiar with cash back incentives in the real world, users are comfortable and prepared to engage with the offerwall.
Users are familiar with cash back rewards
Offerwalls resemble cash back incentives as seen in the real world, which means users are familiar with the monetization tactic and comfortable engaging.
It’s no secret that reward shopping is a concept most users can get behind. Many people are members of some sort of reward program, such as the well-known initiatives at CVS, Starbucks, airlines, or even through a credit card. The offerwall is no different - you get rewards for your engagements and interactions.
As users engage more frequently with your offerwall and get access to premium features, they may decide to pay for the in-app purchases. It’s important to note that users who convert on ads and users who engage with in-app purchases are not mutually exclusive groups. Once you get a free, special edition frappuccino as a Starbucks reward and love it, you’re likely to just pay for it the next time, but that doesn’t stop you from collecting more rewards.
The offerwall is a valuable revenue stream, allowing you to monetize the users who opt-in while encouraging them to eventually convert to paying users. Once you’ve decided to implement an offerwall, there are key tactics to keep in mind.
6 tips for optimizing the offerwall to maximize revenue
With the offerwall functioning as a non-paid virtual economy, the key to maximizing its potential means mastering your offers, or currency, and how it flows through your app. With a virtual economy already in place, here are some key tactics for optimizing the offerwall to maximize revenue.
1. Ensure your currency generates value
Your app’s hard currency can be simple, such as credits, points, or cash, or even tied directly to your existing in-app purchase offerings. They can also be related to the app experience itself, such as minutes or months of free ads. The main goal is to determine the currency generating value in your app and to use that as your starting point. Whatever currency exchange rate (i.e., 100 credits = $1) you put in place, be sure it uses a similar exchange rate as your virtual shop. Keep in mind that you can always A/B test your exchange rates to ensure they’re incentivizing.
2. Foster a sense of achievement through gamification
One of the many reasons mobile gaming is so appealing is because it gives players a feeling of internal accomplishment, which is often facilitated by virtual economies that make it easier for users to progress. The best way to mimic this same sense of achievement through your offerwall is by gamification - placing value on currency that leads to progression or challenging users to reach goals, for example.
A well known shopping app where people bid on products allows users to earn “points” through offerwall, which are transferred to a wallet. The more points in their wallet, the faster users can bid and win products, instilling a competitive mindset.
3. Make sure the offerwall traffic drivers are visible
Traffic drivers, buttons that lead users to your offerwall, should be visible, accessible, and easy to find. One way to ensure they’re seen, is to show them at multiple places throughout the app, such as the home screen, in the store, or at the top or bottom of the screen. The call to action button should also be clear and direct, such as complete, view, buy, claim, etc. This is a great place to A/B test different options.
4. Create urgency around your offers
Showing offerwall traffic drivers when users are in need of a boost is important for maximizing engagement. For example, if a user runs out of coins in the middle of a session and needs more coins to save a photo without a thumbnail, they’re likely to open offerwalls. You can also offer limited time sales to incentivize engagement - for example, for a limited time, you can allow users to get more coins in exchange for a less important task. Similarly, if a user is looking to purchase items in the virtual store, you can offer a product that costs more than the user can afford. You can then direct them to offerwall to get more coins.
5. Serve the offerwall to groups of users differently
It’s no secret that user groups are going to respond to offers differently, which makes segmentation a critical part of your offerwall strategy. You can segment users by paying/non-paying, advanced users/new users, geo, and more. For example, you can increase currency exchange rates to serve different users, based on the user’s familiarity with your app. For example, you could set $1 = 100 coins for early users and $1 = 300 coins for advanced users. You may also want to consider how often you show the offerwall traffic driver to subscribers or users who interact heavily with the existing virtual economy. The last thing you want to do is encourage those users to stop spending real money.
6. Brand your offerwall page
Your app has a unique look and feel, and your offerwall should mimic that. When an offerwall is in line with your app’s branding, users won’t see it as an ad but a native part of the device experience, making them more likely to engage.
If you've already invested into developing a virtual economy for your app, it may be time to consider the offerwall as a new revenue stream. You don’t want to miss out on the opportunity to give your users another touchpoint to engage and add value to your monetization strategy.