Mobile monetization company Tapjoy is expanding its video ad strategy with new native ad units that users can watch in exchange for virtual currency in a game.
It’s basically an extension of what Tapjoy and many other rivals have been doing to move away from offer walls that get users to directly download apps for virtual rewards. Apple cracked down on that type of app promotion in the spring, arguing that it was having an unfair influence over the chart ranking system. Developers have since scrambled to find alternate means of both distributing and earning revenue from their work.
Unlike the older video product however, these videos are native. They don’t lead out to another mobile web page where an app publisher risks losing or frustrating users — unless the user wants to click through and go there. They also pre-cache, so users don’t have to wait for the videos to load.
The way the video product works is that if users want to get virtual currency in a game and not pay with real money, they can agree to watch video ads. They’re usually trailers for games or more like TV commercials for brands. Like in the company’s older version fo the offer wall, consumers choose which ads they want to watch. Tapjoy says about 90 percent of users who click on one of these ads watch it all of the way through. They didn’t share statistics on what percentage of users actually convert to an advertiser’s desired action like downloading their app or becoming a fan on Facebook because the product is new and the rate varies widely.
Advertisers can expect to pay at least 15 cents for a completed video view. But since Tapjoy works on a competitive bidding system, this amount can also vary a lot.
Video ads have been one of the most promising revenue replacements for developers, but the issue has been that there hasn’t been enough inventory. Social-mobile game developer Glu Mobile has said that when it can find inventory, it can replace 50 to 75 percent of the revenue it was getting from offer walls. But because it hasn’t found enough of these ads to place in its games, the company said it was only able to replace about 15 to 25 percent of the offer wall revenue in its most recent quarterly earnings.
Linda Tong, Tapjoy’s vice president of product, said inventory won’t be as much of a problem as it was before since the company has been scaling up its sales team.
“We have a dedicated salesforce out there selling this inventory,” she said. “I think that publishers will expect to see greater fill than they have before.” The company says it’s “TBD” to see how much revenue the video ad product can produce relative to what Tapjoy was able to do before with download-driven offer walls.
Tapjoy adds that this new video ad product should be out on at least one to two thousand developers’ apps in the next week or so. The company has about 10,000 applications in its network.