The fusion of payments and adtech

By Jure Grahek, SVP Strategic Initiatives, ZBD

Rewarded ads (users watch ads to earn in-game rewards) have been around for a while in the gaming world and have worked incredibly well. They are the most popular format with users. However, due to a range of factors including the emergence of privacy-first marketing regulations on iOS, there has been a decline in ad revenues across all formats meaning developers have struggled to monetize mobile games well. The same trends have been visible across the mobile app landscape in general.

Revenue sharing is where the magic lies

In this environment, it’s essential for the industry to find new solutions. An approach we’ve been pioneering since 2019, and seen work incredibly well, is rewarding users not just for watching ads but for actual real-time engagement online – through gameplay, engaging with content, the possibilities are ongoing. And, when these rewards come in the shape of real money (rather than in-game or in-app content), in real-time, then we have something very powerful on our hands.

For games and apps that monetize primarily through ads, this model is surprisingly easy to set up and very sustainable. Real time, real money rewards don’t have to be big cash outs. In fact, it’s not really about the dollar amount users are earning, it’s about the experience of earning something of real value as a native part of gameplay. Imagine picking up a coin inside a game, but that coin is worth real money, which you receive instantly and can also spend instantly. That coin will probably only earn you a fraction of a cent, but the dopamine hit is very real and the rewards stack up over time.

At ZBD, we make this work by fusing the global utility of Bitcoin’s Lightning Network with advertising and modern payments technology, (we are talking about micropayments as small as $0.00005). Complex payments processing is made simple and instant when you’re using digital-native money. Users can be paid a revenue share for each ad impression or engagement. This simply doesn’t work with dollars and traditional payment rails. And it’s all set up using simple APIs or our Unity SDK.

While the concept of spending yet more money at such a time might feel unpalatable, we have strong evidence that shows that sharing ad revenue with users is a uniquely surefire way to create a sustainable business model – spend a little, earn a lot. Because while you are giving a bit of money back to users, it’s a percentage of a potentially much larger “pot”. And since you’re tying rewards to ad monetization, you don’t run the risk of overspending.

Proven impact in the games industry

This approach has already worked well in mobile gaming – a particularly performance-driven industry. By reinvesting a percentage of revenue back into the community through rewards, developers have not only strengthened their relationship with players but also ensured sustainable growth. This model has proven to be a win-win, with rewarded users monetizing 2-3 times better than non-rewarded counterparts when developers give back 15-30% of their ad revenue through in-game rewards.

For example, Ludo Zenith from Square Enix saw an 82% increase in ARPDAU after integrating ZBD’s revenue-sharing rewards tech, which is actually on the modest side of the spectrum. Looking at more extreme uplift numbers, PlayEmber saw an increase of +350% revenue per user on D14 in their portfolio of ZBD-rewarded games. These monetization uplifts are the direct result of two factors: players that get rewards retain longer and play longer sessions, thus viewing more ads.

This isn’t just a quick trick to pump numbers either, but a great way to make the game actually more engaging in the long-term. For example, Fumb Games saw their D30 retention climb by over 1200% in their game Bitcoin Miner after introducing rewards, turning a game that couldn’t hold players’ attention for longer periods into their flagship and most profitable title.

Pioneering payments innovation in Adtech

The success of combining real-money rewards with ads extends beyond gaming, and even beyond mobile. In the cookieless future and world of adblockers, you become an acceptable advertiser by offering rewards in exchange for attention. There are a couple of innovators already shaking up traditional models by fusing ZBD’s real-time payouts into adtech.  Fountain is a podcasting app where users can see their cash going up in real-time as they listen to opt-in audio ads, since the instant processing of micropayments allows money to be ‘streamed’ in real time alongside audio. Slice is a browser extension that shows you ads as you browse the web, but these ads pay you real-money rewards for each impression, with ZBD powering the withdrawals, making payouts instant, global and with no technically imposed minimums.

Or if we’re looking at the fusion of two very innovative products, we can examine AdInMo, an in-play ads provider that works mostly with mobile games (think billboards along the track in a racing game). These are non-intrusive ads, meaning they don’t interrupt the playing experience in any way. You’re just seeing them naturally as you play. And because they fused their tech with ZBD payments, users generate a bit of Bitcoin for every impression! This is a completely streamlined way for games to give players real-money rewards with zero interruption of gameplay. Rewards incentivise players to play more, they in turn see more ads and everyone from the user to AdInMo and their advertisers profits.

The future

While there’s different ways to implement real-money rewards into games, apps or directly with adtech products, the core concept is always the same: implement a revenue share into anything that generates revenue. Even if it’s in sub-cent values. That’s a powerful proposition that’s already transforming business outcomes for the innovative companies bold enough to try something new.

We are just scratching the surface of what this concept for user engagement can look like in practice. The concept is proven to work, now it’s time to bring it into more games, more apps, more solutions. In the digital-native age, payments don’t need to be a boring operational process. They can be embedded directly into products to create brand new experiences that users want and businesses can use to create separation in the increasingly crowded online world.

I, for one can’t wait to see what the next few years will bring. The idea is out there, now it’s time for tech companies to do what they do best: innovate.