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In the past year or so we’ve seen a meteoric rise of a new “medium” – the loyal incentivized traffic players.
Companies like Mistplay, Exmox, AdJoe, Influence Mobile, Fluent, and newer players like AlMedia, are making waves in the mobile app download space generating incredible results – contrasting the results that are typically expected from incentivized inventories.
Unlike the incentivized offer walls and the rewarded videos of the past – these companies are doing much better on all fronts as they own their own assets: 1st party data, and a web app or native app, driving rewarded and “rewarded” inventories to Advertisers.
This article goes through both the history of incentivized inventory, as well as explaining why this new genre of loyal incentivized inventory is doing so well, going through the 3 main reasons:
If you already know much about the incentivized inventory space , skip to the middle of the article, to learn more about the new era of incentivized.
Incentivized inventory has suffered the worst reputation in digital advertising history. Following an explosive rise in popularity around the days of Facebook canvas games and virtual tokens offer walls, incentivized inventory as a term was often used interchangeably with “poor quality inventory”. Unfairly so.
The original incentivized inventory offer wall worked in a simple way: A publisher will offer users Y virtual coins in exchange of completing “offers”, for which the publisher received $X per offer completed. The offers could be anything from “submit an email address” to “sign up for a 7 day trial to Netflix”.
An offer wall platform would facilitate the conversion between $X>Y , and would work with Advertisers or affiliate networks to source CPA offers.
As the mobile advertising era started, many of the offer wall companies shifted their focus to mobile apps, integrating an offer wall within an app, promoting games and apps allowing users to gain virtual coins and rewards.
Rumors said that Apple did not like this practice as it was skewing the app store results, and often leading to poor user experience, and in turn, Apple issued new restrictions banning apps from featuring “offer walls” or operating app promotion services, thus killing several companies like Appsfire, AppGratis, and others.
The demise of the offer wall left a hole to be filled. Publishers lost an important monetization engine which often covered the smartphone full screen.
Without further ado, the full screen was filled with a new incentivized format - the rewarded video.
The idea was very creative – as users opt in to get a reward, a full screen, unskippable 30 seconds (or more!) video , or playable ad, will be presented to them, to be followed with an “end card” – a full screen clickable interstitial ad.
Publishers loved it. Advertisers loved it. Users – not so much. But it grew like wildfire.
Similar to the offer wall, a deep integration would need to happen between the ad platform and publisher, so that users would get their reward if they opt in to watch an ad. This integration meant an SDK, allowing only a few large players to dominate this space.
And indeed, only large players such as Vungle, Unity, IronSource, and AppLovin ruled this space, with their SDK widely circulated, offering other players such as DSPs, the opportunity to bid on the same inventory they were offering, often to the same advertisers.
While there are no hard statistics on the size of the rewarded video inventory, I would estimate that Rewarded Video represents the largest ad format in terms of ad spend on mobile today.
The only challenge with rewarded inventory is that the companies operating it act as ad networks, with their SDK circulated with publishers, relying on 3rd party data access for tracking and attribution.
And as Apple enforced a privacy first approach with App Tracking transparency starting in 2021, access to user-level data was cut gradually, hurting both the capability of precise targeting, as well as the measurability of advertising while relying on 3rd party data. You can read more about the impact of App Tracking Transparency here.
A new incentivized era was ready to start.
The new incentivized inventory era is propelled by 3 main drivers:
If there’s one thing that’s common with most of the rising loyal incentivized players is that they all own an asset that attracts users. Whether it's by doing high scale user-acquisition themselves, or by developing a community – the new era incentivizes players to grow an actual community of users, typically gamers, who are offered promotions, rewards, and so on.
Unlike reaching an audience using a network of publishers integrating an SDK – owning the direct access to users gives these ad platforms with unique 1st party data, allowing them to target, and as a result, monetize the users better than ad networks.
Surprisingly: Some of these players are operating within the iOS app store. Rather than position themselves a community for app-discovery (which is not allowed), the apps are often built as communities to QA games, or clubs to discuss app features, thus being allowed to stay and grow within the iOS app store as de-facto app-discovery platforms.
There are many articles written already about the challenges created by Apple’s App Tracking Transparency, but in this article, we can also reflect on an opportunity that Apple created for the incentivized inventory space, with SKADNetwork 4.0 finally bringing real support for Web to App measurement.
Web to App tracking was a complete farce up to this point. Mobile browsers had no access to the IDFA, causing attribution platforms to default to tracking using cookies, IPs, and device headers, which unsurprisingly, were mismatched between the clicks and conversions.
SKAD4.0 gave the market a measurement framework that was able to bridge the gap.
And while Apple banned offer walls in apps > Apple can’t really ban the open internet leading companies to be able to develop incredible reward communities and app discovery services, sending users from the web to the app store, while tracking (finally) actually works!
The original incentivized offer walls carried several technological and usability challenges.
First – the app publishers needed to integrate the offer wall platform within their game, so that users would receive their incentive once they completed offers. This was a tech heavy process including connecting the postback to the app economy, and often required customer support as users complained when they completed an offer and did not get the virtual coins they were expecting.
Secondly – the better the incentive was (to the users), the more difficult it was to complete the offer, leading the users who were most after the incentive to complete the offers, dropping off the moment after.
The new incentivized world assumes and leverages on the fact that App developers and Games are already offering users incentives as they open the app for the first time.
i.e. If you download Sleep Cycle – you’ll be offered a 7 day free trial.
Same as if you download any game out there – you’ll be prompt for “starter kits”, “introduction loot box” and other incentives.
The new incentivized inventory understands that by offering users with an incentive that users would get already – they are generating traffic that is on par with what the app expects from any other type of non incentivized inventory!
The legacy players in the incentivized space, companies like TapJoy, Fyber, and others, acted as a network – benefiting and growing from the powers of scale.
They operated their own sales staff, signing publishers to integrate their offer wall SDKs, and selling directly to app and gaming marketers, or sourcing offers from the performance networks.
The new loyal incentivized players will need to source offers from somewhere, while only having their own inventory to present those to, creating a limitation in their inventory supply.
With a supply limitation, these new players will be unable to build a sales staff equivalent to those of the networks, forcing them to either source in-direct offers from one another, or merge and acquire smaller similar players.
Recently, after years of legal battles, Apple has been forced to allow side apps, and offer alternative app stores in the EU.
It is only assumed that alternative app stores will not be as strict as apple when it comes to app discovery services, leading to a 2nd wave of app promotion services and within those riding the wave, will be the new loyal incentivized platforms who will now be able to increase their own footprint, expanding their own assets, without the risk of putting their eggs in one basket (i.e. getting banned by Apple).
If you have your own thoughts about the topic and wanted to chat about it – feel free to reach out to me at maor@incrmntal.com
Maor is the CEO & Co-Founder at INCRMNTAL. With over 20 years of experience in the adtech and marketing technology space, Maor is well known as a thought leader in the areas of marketing measurement. Previously acting as Managing Director International at inneractive (acquired by Fyber), and as CEO at Applift (acquired by MGI/Verve Group)