Rewarded Video in Mobile Apps — What It Is, Types, and Working Principle

What Is Rewarded Video?

Rewarded Video is an ad format where users make a conscious choice to watch a video in exchange for a valuable in-app reward. Unlike Interstitial or banner ads, users initiate the ad themselves by clicking a “Get Reward” button or selecting the corresponding option in the interface.

The format has become widespread in free-to-play mobile games, where it has become the primary source of revenue for developers. According to Newzoo (2025), over 65% of revenue in the top 100 gaming apps comes from Rewarded Video. The key factor in the format’s success is voluntariness: users don’t feel forced and perceive ads as part of the gameplay experience.

Video duration is typically 15-30 seconds, after which the reward is credited. Reward validation is performed server-side by the ad platform — this eliminates the possibility of client-side fraud.

Difference Between Rewarded Video and Incentivized Installs

It’s important to distinguish Rewarded Video from Incentivized Installs. In the former, users receive an in-game reward for watching a video. In the latter, users are offered to install another app in exchange for a reward. Incentivized Installs may not be counted by organic platforms (Apple, Google) as genuine installs, while Rewarded Video is considered a quality ad format.

How Does Reward-Based Advertising Work?

The Rewarded Video mechanic follows a chain: user selects a reward → ad video loads → user watches the video → server validates the view → reward is credited. Each stage requires reliable handling to prevent failures and fraud.

Rewarded Video Display Mechanics

The user clicks a UI element (button: “Double Reward,” “Get Bonus”) that triggers a request to the ad SDK. If an ad is ready to display, video playback begins. After viewing is complete, the SDK sends a reward callback that must be processed by the app. It’s critical not to grant a reward if the user closed the video before completion — this is controlled by the rewardGranted parameter in the callback.

Server-Side Verification (SSV)

For additional fraud protection, Server-Side Verification (SSV) is used. SSV is a mechanism where the ad platform’s server sends an HTTP request to your server confirming a successful view. Only after receiving this confirmation does the app award the reward to the user.

class RewardedVideoManager {
    private var rewardedAd: RewardedAd? = null

    fun loadRewardedAd() {
        val adRequest = AdRequest.Builder().build()
        RewardedAd.load(
            context,
            "ca-app-pub-3940256099942544/5224354917",
            adRequest,
            object : RewardedAdLoadCallback() {
                override fun onAdLoaded(ad: RewardedAd) {
                    rewardedAd = ad
                }
            }
        )
    }

    fun showRewardedVideo(activity: Activity) {
        rewardedAd?.show(activity) { rewardItem ->
            grantReward(rewardItem.amount, rewardItem.type)
        }
    }

    private fun grantReward(amount: Int, type: String) {
        addCurrency(amount)
    }
}

Types of Rewards in Rewarded Video

Reward selection directly impacts conversion rates for Rewarded Video views. Different app types use different reward mechanics tailored to their audience and monetization model.

In-Game Currency

The most popular reward type — coins, crystals, gems, and other forms of premium currency. Game currency is universal: all users need it, regardless of progress level. Standard rewards are equivalent to 1-5 minutes of in-game farming, allowing users to choose between spending time or watching an ad.

Extra Lives and Boosts

In apps with life mechanics (3 lives, timer-based recovery), Rewarded Video gives users extra attempts. Extra lives are a powerful motivator: users who want to continue playing are highly likely to choose watching an ad over waiting for recovery. This reward type is especially effective in hyper-casual and puzzle games.

Premium Access and Acceleration

Users can get temporary premium access to app features: build acceleration, purchase discounts, exclusive content. Temporary premium — a mechanic that introduces users to paid app features without immediate payment. This can increase IAP purchase conversion by 15-20%.

SDK for Rewarded Video

Ad platforms provide specialized SDKs for Rewarded Video integration. Platform choice depends on the app type, target regions, and minimum payout threshold requirements.

Google AdMob

The largest ad network with Rewarded Video support via the Google Mobile Ads SDK. AdMob offers both the standard format and Rewarded Interstitial — a combination of reward with full-screen display. Average eCPM is $12-18 in Tier-1 regions. Supports SSV through the Google Verification SDK.

Unity Ads

A specialized platform for games where Rewarded Video is the key format. Unity Ads provides advanced analytics on Retention and LTV broken down by ad views. eCPM can reach $25 for gaming apps with high-quality traffic. A key feature is built-in support for playable creatives within Rewarded Video.

AppLovin and ironSource

Both platforms support Rewarded Video with in-app bidding. AppLovin MAX mediation allows combining AdMob, Unity Ads, and AppLovin’s own sources, automatically selecting the best bid for each impression. ironSource offers similar functionality with a focus on gaming apps and A/B testing tools.

import UnityAds

class RewardedVideoViewController: UIViewController {
    let adUnitId = "Rewarded_Video"

    func showRewardedAd() {
        UnityAds.show(self, adUnitId: adUnitId) { result in
            switch result {
            case .finished:
                self?.grantReward()
            case .skipped:
                print("User skipped the ad")
            case .failed:
                print("Ad failed to show")
            }
        }
    }
}

Advantages of Rewarded Video Over Other Formats

Rewarded Video holds a unique place in the mobile ad ecosystem due to its combination of high profitability and minimal negative impact on user experience. A comparison with other formats clearly demonstrates its advantages.

High eCPM and LTV

Rewarded Video achieves 20-40% higher eCPM than Interstitial Ads and 5-8x higher than banner ads. The reason is that advertisers pay a premium for voluntary views with high brand recall probability. User LTV for those who regularly watch Rewarded Video is 30% higher than the app average — such users stay in the app longer.

Voluntary Display Nature

Users decide for themselves whether to watch an ad. This fundamentally changes perception: instead of irritation, users feel grateful for the opportunity to earn a reward. Retention in apps using Rewarded Video is 10-15% higher than in apps with Interstitial Ads. According to GameAnalytics (2025), apps with Rewarded Video show Day 7 Retention of 25-30%, while the average for free-to-play games is 15-20%.

• eCPM — 5-8x higher than banner ads and 30% higher than Interstitial Ads.
• Retention — users who watch Rewarded Video have 40% higher Day 7 Retention.
• User Experience — voluntary viewing eliminates negative ad perception.
• ARPDAU — Rewarded Video can double revenue per user without increasing churn.

Integrating Rewarded Video into Your App

Step-by-step integration of Rewarded Video includes SDK setup, creating entry points for users, and handling rewards. Proper implementation ensures stable ad serving and user trust in the reward mechanic.

SDK Initialization and Preloading

The first step is initializing the ad SDK at app launch and preloading Rewarded Video. Unlike Interstitial Ads, Rewarded Video does not need to be immediately ready — users choose when to watch. However, preloading at startup ensures the ad is ready when the user decides to watch it.

Creating Entry Points

The Rewarded Video button should be visible, logical, and contextual. Place it where users naturally want to earn rewards: level completion screen, in-game item shop, or game over screen. UX rule: users should understand what reward they’ll receive before starting to watch. Specify the quantity and type of reward on the button.

Reward Handling and Validation

After successful video viewing, the SDK calls the onRewarded or onUserEarnedReward callback. Inside this callback, the reward must be granted to the user. For critical rewards (premium currency), server-side validation is recommended — SSV callback ensures rewards are granted only for genuine views, not emulation.

data class Reward(
    val type: String,
    val amount: Int
)

sealed class RewardResult {
    data class Granted(val reward: Reward) : RewardResult()
    object NotReady : RewardResult()
    object Skipped : RewardResult()
}

Rewarded Video Metrics

To evaluate effectiveness, Rewarded Video uses a set of specialized metrics distinct from standard ad indicators. The key difference is the focus on engagement and voluntariness rather than forced reach.

Completion Rate (CR)

The percentage of users who watch Rewarded Video to completion. The average Completion Rate for a well-integrated format is 70-85%. Low CR (below 50%) indicates creative issues: video too long, uninteresting content, or incorrect ad network targeting.

Impressions per DAU

The average number of Rewarded Video views per daily active user. Optimal values depend on app type: for hyper-casual games — 3-5 views, for mid-core — 1-3, for non-gaming apps — 0.5-1. If too low, users don’t find motivation to watch; if too high, the game may become an “ad simulator” rather than entertainment.

ARPDAU (Average Revenue Per Daily Active User)

The main business metric for Rewarded Video. ARPDAU accounts for all ad revenue divided by the number of daily active users. Growth in ARPDAU while maintaining Retention indicates effective monetization. The target for free-to-play apps is $0.05-0.15 per user per day.