Joowon Lee, a research fellow at Korea Advanced Institute of Science and Technology (KAIST), and Dong-Hee Shin, a professor at Chung-Ang University and the Ministry of Education in Korea, tapped data from mobile ad network IGAWorks in their study.
More specifically, they assessed over 1.4m transaction records and in-app behaviour data from random users who were offered free in-game items in exchange for interacting with ads – a strategy the authors equated with product sampling.
One key learning from their paper, entitled Positive Side Effects of In-App Reward Advertising: Free Items Boost Sales – A Focus on Sampling Effects, confirmed that this approach has clear revenue benefits for developers of games.
“After experiencing free-sample items, more than 17% of users made subsequent game-item purchases, whereas only 2.75% of users purchased game items when not offered free-sample items,” the authors wrote.
The impact of this “sampling”, they added, was not solely observed among inexperienced users, but also increased purchase levels and other core metrics for experienced players who had previously acquired in-game items.
Elaborating on their findings, the academics revealed that players who registered longer sessions each day responded better to reward ads in terms of spending volume and value.
“Before the direct experience with the free-sample items, users in both high and low daily session length groups spent the same amount – approximately $20 – to purchase game items,” the authors wrote.
“After the direct experience, however, users in the high-engagement group spent far more than users in the low-engagement group.”
One measure that did not witness a “significant effect” was the amount of daily connections, suggesting that how long people play for could be a more useful indicator of engagement than the frequency of playing.
In summing up the implications of their research, the two academics argued that reward ads are generally recognised as generating above-average response rates, but the new findings hint at another vital payoff of this approach.
“The results of this study reveal a positive side effect of in-app reward advertisements – boosting users’ in-app purchases,” they wrote.
Sourced from Journal of Advertising Research; additional content by WARC staff