Introduction

User Rewarded Content (URC) is a standard feature and a default setting in major areas of today's video advertising. The vast majority of digital campaign optimizers quietly assume it is safe and beneficial towards the brand. But not opting out of URC can result in a significant part of the budget going towards them. As a result, many brands find their ads reaching audiences outside of their target, and potentially not receptive to their message. CMOs need to understand the scale of URC, compatibility of URC audience with brand’s target audience and carefully re-evaluate the company-wide strategy towards URC.

What is User Rewarded Content?

User Rewarded Content (URC) refers to ads where a consumer receives an award after viewing the ad. The bonus could come in a form of in-app currency or an in-game power-up. It is a standard feature of the largest advertising system - Display and Video 360 (DV360) by Google, part of Alphabet. It applies only to video ads outside of YouTube. It used to be even more prevalent and popular and is now officially described as “limited” and potentially resulting in “narrow reach”. 

The Default of URC and its Perceived Safety

User Rewarded Content is included by default. If you stick to the recommended set-up you may get impressions within the URC websites and apps. You need to exclude them in order not to have advertising displayed in their placements.

Interestingly, almost nobody seems to be excluding URC. Based on our latest research over 90% of video campaigns purchased through DV360 did not filter out URC placements. Many major advertisers do not have a single campaign that would be excluding URC. The issue seems irrelevant to them. As if it was safe and desired. 

The Budgets Redirected to URC

What happens if you do not exclude URC? We analyzed a global sample of relevant campaigns from 2023. The results vary wildly. For over 50% of campaigns the effect is negligible - less than 1% of the budget goes towards URC. At the other end, there are 6% of campaigns where over 80% of the budget goes towards URC. On average a campaign in this global sample would see about 14% of its budget going to URC. A number that cannot be ignored.

What URC and Their Audience Really Are

URC consist of a long tail of games and apps. Many of those placements reach a small fraction of the budget. The specific URC vary depending on geography, time and many other factors. Some titles appear more often than others. Leaders often include Soccer Manager, Hungry Snake, Candy Crush Saga, Lumber Empire, Subway Surfers, Fashion Battle, Crazy Hospital and School Simulator. 

When diving deeper it is easy to see a frequent audience mismatch. Brands often aim for adult decision makers while many URC are appealing heavily towards children and teens. If you ignore the mismatch and skip your “understand-the-audience” homework you may end up advertising coffee machines inside kids games or promoting a period calendar among male-dominated audiences. Such cases inspire a broader question of the desired target demographics. Many marketers seem ignorant about the children-friendly nature of most URC environments. Brands appreciate the patient eye-balls and are unaware how many of them come from game-addicted kids desiring a bonus in their play.

Another crucial question is if ads placed within games are noticed, remembered, seen as desired and promote positive emotions toward your brand. For example, if the person in the audience is so desperate to get a reward that they receive as a bonus, where is this person's attention? Are they likely to keep their focus at the game, while quickly forgetting the unwanted advertising interaction? Can they be even annoyed that they are waiting to resume their addictive interactive play but are forced to watch a video. 

The Recommended Next Steps

What should CMOs and Media Heads do? Given the scale and nature of URC it is not some irrelevant “technical” issue. It should be a company-wide decision whether you allow for URC, and if so, what the rules are.

A great first step is understanding where your brands, regions and markets currently are. Check the set-up of your campaigns and ads and verify if you are excluding URC placements. The Adfidence platform has a Best Practice related to URC so that you can see how you are doing immediately - at a company level overall, by brand, by geography etc.

Afterwards your marketing team should analyze and decide whether the URC audience is compatible with your target. Moreover, ask your team if the reward mechanism works well with the message or is an unwanted or unnecessary distraction.

Ultimately you have three leading options

• Quit URC altogether

• Keep URC while using an Inclusion List to rely only on quality places you know

• Keep URC while using an Exclusion List to get rid of undesired placements

Given all the uncertainties erring on the safe side and avoiding URC before you feel confident about them will minimize the potential damage for your brand and advertising bduget. 

Please feel free to reach out to our team should you consider working together with us on this issue and more.