What are incentive ads?

Unlocking User Engagement: Exploring the Power of Incentive Ads in App Marketing

by Liz Rustia

Incentivized ads are marketing tools that offer users a reward or incentive in exchange for completing an action. They often appear on shopping or gaming apps. And they’re sometimes referred to as sponsored, rewarded or value exchange advertising.

Incentive ads can result in direct conversions for advertisers. And statistics show that users are over 25% more likely to convert when rewarded this way.


Incentive ads in app marketing enhance user engagement


What are some of the types of incentive ads?

Incentive ads can take various forms, including rewarded video ads, offerwalls, and incentivized installations. Rewarded video ads allow users to voluntarily watch a video advertisement and receive rewards upon completion. Offerwalls present users with a range of offers and tasks from advertising partners, which users can complete to earn incentives. Incentivized installations involve rewarding users for downloading and installing a promoted app.

Rewarded Video Ads:

Rewarded video ads are one of the most common types of incentive ads. Users are presented with the option to watch a video advertisement voluntarily, and upon completion, they receive in-app rewards such as virtual currency, extra lives, or exclusive content. These ads allow users to choose their level of engagement while providing tangible benefits.


Offerwalls provide users with a selection of offers and tasks from advertising partners within the app. Users can complete these tasks, such as surveys, app installations, or sign-ups, to earn virtual currency or other incentives. Offerwalls offer flexibility and a sense of control to users as they can select the tasks that interest them the most.

Incentivized Installations:

Incentivized installations involve rewarding users with in-app perks for downloading and installing a promoted app. This approach is commonly used in app cross-promotion campaigns, where developers promote each other’s apps within their user bases. Incentivized installations can be an effective way to boost app downloads and generate mutual benefits.


Pros of Incentive Ads

Increased User Engagement:

Incentive ads encourage users to spend more time within an app, increasing overall user engagement. By offering rewards, users are motivated to interact with advertisements voluntarily, resulting in a positive user experience.

Higher Retention Rates:

Incentive ads can contribute to higher user retention rates. When users are rewarded for their engagement or installations, they are more likely to continue using the app and explore its features. This leads to increased app loyalty and reduces the risk of churn.

Monetization Opportunities:

Incentive ads provide a revenue stream for app developers. By partnering with advertisers and integrating incentivized ad placements, developers can generate income through ad views, completed tasks, or conversions.


Cons of Incentive Ads

Potential Quality Concerns:

Some users may engage with incentive ads solely for the rewards without genuine interest in the advertised product or service. This can lead to lower-quality engagements and reduced effectiveness of the ads. It is crucial for advertisers to ensure that their targeting strategies align with the desired user base to mitigate this issue.

User Perception:

Incentive ads may affect user perception of an app, especially if they are overused or disrupt the user experience. If users perceive an app as excessively focused on advertisements, it can negatively impact their overall impression, leading to decreased trust and potential uninstallation.

Higher Costs for Developers:

Implementing and managing incentive ad campaigns can require additional resources and costs for developers. Building and maintaining systems to track user engagements, rewards, and payouts can be complex and time-consuming. Moreover, the cost of providing rewards or virtual currency to users should be carefully managed to avoid excessive expenses.


Incentive ads offer app developers and marketers an effective strategy to drive user engagement and downloads. By providing rewards and incentives, these ads can increase user interaction, improve retention rates, and unlock monetization opportunities. However, developers must carefully balance the use of incentive ads to avoid negative user perceptions and ensure quality engagements. By leveraging the various types of incentive ads available, app marketers can optimize their campaigns and achieve their goals while providing a positive user experience.

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