The mobile advertising industry has long applauded rewarded user acquisition (UA) as a win-win for users and developers.
It’s an approach to UA that is becoming increasingly popular.
But as the $270 billion mobile ad industry continues to expand, the dark side of rewarded UA is emerging and many of the problems are attributed to ineffective partnerships.
Understanding Rewarded UA and Its Evolution
Rewarded User Acquisition, or Rewarded UA, is a marketing model in which users are incentivized with rewards. These can come in many different forms from in-game currency to gift cards, or even real cash.
In exchange, users complete specific actions within an app. This might include engaging with ads, reaching a certain level, or spending a designated amount of time on the app.
Traditional rewarded UA was very focused on early sales funnel actions, specifically install numbers, often meaning volume was prioritized over quality. This approach failed to consider retention, engagement, and LTV, meaning churn rates were extremely high.
The traditional quantity-focused approach delivered a low ROAS since users who downloaded the app did so primarily for rewards and often did not stay active or contribute value beyond the initial engagement.
Today, Rewarded User acquisition requires a much more sophisticated strategy if apps and advertisers want to drive high-value engagement and user loyalty. There is a reliance on data and partnerships to make these new strategies possible.
Modern campaigns are structured to keep users engaged over extended periods, often using multi-step rewards or play-to-earn playtime engagement to foster consistent interaction and deeper app involvement.
While many in the industry highlight the benefits of rewarded inventory, the risks often go unspoken. Modern marketing teams must consider both sides of the coin.
The Hidden Risks of Rewarded UA
Much of a campaign’s success comes down to choosing the right partners and being aware of any potential pitfalls.
With this awareness, it’s possible to steer a campaign’s success and optimize ROI and ROAS.
So what are the risks that are so critical to campaign success?
Audience Quality and Download Intentions
Low-quality traffic can be devastating for a campaign as many users engage solely to earn quick rewards rather than to become engaged and valuable long-term users.
When choosing rewarded user acquisition partners it’s important that the approach doesn’t primarily attract users seeking fast rewards.
So what should you be looking for?
Choosing a partner that utilizes recommendation algorithms for a more targeted, high-intent audience can help avoid these low-quality users. Consider the platform’s audience demographics, traffic sources, and user interface as contributing factors to audience quality.
Fraud Protection Standards
Reward-based platforms often attract fraudulent users who employ tactics such as proxy usage, duplicate accounts, in-app event manipulation, and spoofing to abuse the system and obtain quick rewards.
This can significantly increase acquisition costs and reduce traffic quality.
A partner’s anti-fraud policies and protections are really important and it’s vital that they actively monitor and combat these issues.
Data Segmentation and Targeting Precision
Poor data segmentation can mean that users disengage after incentives run out. This impacts ROAS and can dramatically lengthen payback periods.
When selecting a partner, investigate their data collection and targeting capabilities to ensure they are structured to reach high-value, retention-focused users.
This step is particularly critical for IAP and advertising IAA models where timely returns are important.
Publisher Network and Traffic Quality
When integrating a rewarded platform across multiple sites or apps, quality control of the publisher network becomes essential. To assess whether the traffic volume aligns with your campaign objectives, it’s crucial to verify the source and scale of the traffic, including metrics for monthly and daily active users.
A partner with robust publisher standards can help maintain high engagement rates and traffic quality, mitigating the risk of unmet campaign goals.
By closely monitoring and validating the publisher network, you can have confidence that your rewarded ads are being served to a high-quality, engaged user base – not inflated metrics or fraudulent traffic.
The Value Of A Good Rewarded UA Partner
While Rewarded UA presents a compelling opportunity for driving user engagement and loyalty, the approach requires careful consideration of potential risks and the selection of partners.
Evaluating audience quality, fraud prevention, targeting precision, and publisher standards is essential when selecting a rewarded user acquisition partner.
Choosing a reliable, high-integrity partner allows advertisers to drive valuable engagement and achieve impactful returns on their Rewarded UA efforts.
Scrambly is a gaming loyalty app in rewarded UA, connecting games and gamers. It is dedicated to optimizing advertiser campaigns through targeted engagement and advanced segmentation.
With a focus on detailed attributes like age, gender, game preference, education, and household income as well as behavioral data like in-app purchasing and game-retention behavior, Scrambly aims to use rigorous audience assessment to mitigate many of the risks associated with rewarded UA.
Katerina Marukha, User Acquisition Manager at Murka had this to add to the importance of successful rewarded user acquisition partnerships.
In combination with effective fraud protection and excellent quality control, Scrambly’s approach allows businesses to take advantage of the many benefits of rewarded user acquisition.
Scrambly stands out by specifically targeting users invested in enhancing their gaming experience, which translates to stronger ROAS and higher retention rates for advertisers.
Additionally, it is among the few platforms to implement fintech-level KYC identity verification, ensuring user credibility and platform trust.
Through data-driven insights and personalized recommendations, Scrambly delivers tailored engagement that boosts both user satisfaction and campaign effectiveness.
By leveraging platforms like Scrambly, which prioritize high-quality engagement and user retention, advertisers can maximize their ROAS and achieve sustainable growth.
