Our CEO and Co-Founder Jacek Chrusciany wrote an article “Is User-Rewarded Content the New MFA? A Look into the Hidden Impact of URCs on Brands” featured in Advertising Week.

Link to the original article: Adfidence URC research in Advertising Week

A reprint of this article can be found below.

Made-for-Advertising (MFA) sites, primarily designed to display ads vs. provide quality content, face criticism for compromising brand integrity. But they’re not the only category that stewards should be looking out for when doing their brand safety checks.

User-Rewarded Content (URC), offering incentives such as in-app currency or access to content for viewing ads, represents another controversial channel for campaign investments, applicable across various platforms. In fact, a study by Adfidence recently revealed that over 90% of video campaigns purchased through DV360 did not filter out URC placements.

Those with some passing knowledge of the category might not have an issue with this number – at first. They may even seem like a smart option. After all, who can argue with guaranteed engagement? But delve a little deeper, and the value is not so straightforward.

URC, by design, offers an incentive for viewing ads. The problem is that it’s hard to know if the engagement is genuine. Users may just be tolerating the ads for the reward.

That means those ‘engagement’ and ‘view’ metrics could be lacking in quality. A brand might be making impressions – just not the kind they want. In addition, the bargain URC seems to offer can be misleading. These cheaper options often yield less meaningful engagement.

The more important question media planners and strategists should ask is what type of impressions these ads are having: are they fostering a positive brand image, or are they just a necessary evil for users to get to their reward?

If the answer to that question isn’t immediately clear and measurable, as Adfidence’s research suggests, this gap in campaign setup could be leading to significant ad spend on unqualified views. Campaigns without the URC filter spent on average 14% of their budgets via URC. However, this expenditure wasn’t consistent across the board. While most campaigns report URC below 1%, others reached 40-60%, and even as high as 80%. These ads also showed up across a wide array of games. The ANA’s recent report on programmatic media supply chain transparency already highlighted how a large chunk of ad spend isn’t hitting the mark. URC could be contributing to this scattershot landscape, leaving brands with a muddled view into where ad dollars are actually going and the impact they’re truly having.

Of course, URC is not inherently bad. They can be an effective tool for increasing app engagement for a select audience. If brands are looking for clearer insights into the ROI of URC, they should consider these tips:

• Select target audiences carefully. Advertisers should decide on target audiences that matter and allow only a set of pre-selected URC through curated inclusion lists.This ensures ad placements are contextually relevant and align with brand standards and target demographics, maximizing engagement and relevance.

• Frequently update exclusion lists. Regularly reviewing delivery reports and updating exclusion lists is important for avoiding non-aligned URC. Excluding certain categories, such as children’s games on adult devices, ensures ads reach the right viewers. Ads should align with games that adult target consumers are likely to play.

• Consider eliminating URC entirely. In targeting adult decision-makers, evaluate if URC aligns with their lifestyle, especially if they’re less likely to engage in mobile gaming. Removing URC can lead to more accurate audience targeting, ensuring ads resonate with the specific interests of the adult demographic.

Ultimately, the key to successfully leveraging URC lies in a balanced, strategic approach. For many, it may mean fully excluding URC. If not, brands should work from a carefully curated inclusion list that aligns with their standards and targets the right audience. By focusing their approach in this way, brands can be sure they’re using their resources responsibly, while making impressions on their audiences that are both impactful and enduring.