Each ad provider probably has variations but in general ads generate money when they have some form of interaction. There are bascially three types of methods ads pay:
CPM - You’re paid per “mill” or for every 1000 ads shown. This is generally the lowest payout. Too many people flood users with ads to try and make those thousands add up. The advertiser gets no value from this. In games involving any action, people are not going to interact with ads.
CPC - Or Cost per Click. In these campaigns, you are paid when someone does tap on the ad, but the user doesn’t have to go any further. Video ads that are watched to completion are considered CPC type ads.
CPI - Cost per Installation. If your user tap turns into the user buying something then you get paid.
All of that is averaged out (you might get CPM, CPC and CPI ads from a vendor) to compute an “Effective CPM” or eCPM.
Now generally speaking Interstitials pay better than banners because they have a higher chance of be interacted with and the ad buyer knows they have the users full attention for the time the Interstial is on the screen. Because CPM rates on banners is so low and depending on the game, there will likely be little interaction with them, Interstitials win.
You will probably make some money just for showing the ads, but it will go up if they click on them. You however are not supposed to encourage people to click on ads with the exception of rewarded ads.
For the last question about rewarded video, you need to use a provider that supports rewarded video. You will write a listener function that waits for messages fro the ad provider. Those messages/events will have fields that indicate that the video was completed. Some will tell you to reward users X number of coins (or whatever). Each rewarded ad vendor is a little bit different. It’s best to read the docs for each of the plugins and see how its implemented.
Rob