Is reward-based advertising the booming frontier for digital medium?

Industry observers say that when users are blocking intrusive ads, reward-based advertising might be the way ahead to restore the lost sheen of consumer engagement

by Misbaah Mansuri
Published - Aug 19, 2019 8:37 AM Updated: Aug 19, 2019 9:27 AM

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Consumers have started leveraging smarter ways to avoid advertisements, thanks to the increasing antipathy towards advertising. You can praise native ads all you want but it’s still not a silver-bullet as a vast majority of digital ads are still intrusive, irritating and creepy. So how does the industry make digital advertising work?

The answer might be simple. Instead of fighting with consumers, respect them. Give them autonomy and freedom. Give them something in return of their time. A new wave of platforms has figured that out, as they tap on incentive-based advertising that might well be the big driver of sweeping changes in ad tech, brought to you by an unexpected underdog: value exchange.

According to Rohit Sharma, CEO, POKKT, which works with Patanjali, Unilever, Coke and Pepsi, in a market like India where less than 1 per cent people do in-app purchase, value-exchange provides a huge amount of inventory and reach for brands to talk to audiences.

Sharma says the space is growing more than 100 per cent in terms of rewarded video growth and inventory, providing an engagement level that may vary from 5%-25% and a high completion rate. “In the app ecosystem, one of the fastest growing category is mobile games. Here rewarded ads create huge amount of user base and traction which brand marketers can use. As the publisher is anyway not making any revenue from that user who doesn’t indulge in in-app buying, it’s the incremental revenue from the ad that benefits him,” he added.

Some of the most common types of reward-based mobile advertising are trailers for other apps, games, and products.

If various consumer studies are anything to go by, they have revealed that rewards generate significantly more excitement than traditional display ads and create deeper engagement and retention from users, which can keep users coming back for more in the future. Advertisers are willing to pay big for users with such values which in turn, heavily reward publishers.

Ashish Bhasin, CEO Greater South, Dentsu Aegis Network and Chairman and CEO India, feels that value-exchange advertising is a space that might be in its infancy but is definitely something to be watched-out for. “It may appeal to a certain type of audience. Various trends and sub-trends come in here, like group-buying is becoming a big deal. There are platforms that are getting you to listen to jingles and reward you on that basis. So I feel that this is a space where many experiments will be done. Some might work, some might not,” Bhasin said.
Batooni, a hyper-local mobile advertising start-up that launched earlier this year, transfers money to user accounts instantly as a reward for their time and attention spent on watching the ads. Owing to this business model, the platform crossed half a million users in 60 days of its launch. Dollartune, another app launched in 2016, awards points redeemable at Paytm for watching or listening to ads on their platform.

Jitendra Chaturvedi, Director and Co-founder of Batooni Advertising, explains that what Batooni is predicated upon is that most advertising, actually all advertising subsidizes media consumption. And so, Chaturvedi and his team understood the scope for direct monetary transfer of this money to consumers. “When we start rewarding consumers, passing up a fraction of a sizeable fraction of advertising money into consumer wallets, it will do a lot of things, a lot of good things to consumers, to advertisers and to the economy. Now when consumers get more money in their wallets, they are happier. This money will invariably find its way back to the markets. That means advertisers who are transferring money to consumers, they get to sell more. Once they get to sell more, they advertise more,” he adds.

Chaturvedi states that with the help of platforms like Batooni, advertisers reach their targeted demography and they pay only for the video advertisements which have been seen by people. “They can save money and advertise more,” he says.

It might be interesting to watch how advertisers leverage rewarded advertising as part of their overall strategy to maximise the success of their campaigns and whether it helps them revive consumer engagement with ads.

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