Crypto Gaming and Gambling Campaigns Lead in User Acquisition Costs, Study Finds

Recent data shows that crypto gaming and gambling campaigns are among the most expensive ways to acquire users with existing crypto wallets, surpassing all other sectors of the crypto industry in terms of user acquisition costs.

According to Asaf Nadler, co-founder of Web3 marketing firm Addressable, campaigns in the gaming and gambling sectors have a median Cost Per Wallet (CPW) of $8.74, with the lower quartile dropping to $3.40. CPW is a valuable metric that tracks the cost of acquiring website visitors who already have a crypto wallet installed in their browser, making it a higher-quality indicator compared to other measures of user engagement.

“Gaming and gambling campaigns are the most expensive, with a median CPW of $8.74,” Nadler said in a recent report posted on X.

These sectors are known for their intense competition and high churn rates, factors that can drive up the cost of acquiring users who are already familiar with crypto products.

Why Crypto Gaming and Gambling Are So Costly

The high costs associated with crypto gaming and gambling campaigns can be attributed to several factors, according to Nadler. One primary reason is higher churn rates—a phenomenon where users quickly lose interest or move on to other platforms. In the gaming and gambling world, speculation and market volatility often drive user behavior, making these campaigns more costly with a lower conversion rate.

“The high cost-to-return ratio of crypto gaming and gambling might be due to higher churn, speculative behavior, and intense competition,” Nadler explained.

Despite these challenges, some industry leaders view high CPW as an opportunity to innovate. Axie Infinity co-founder Jeff “JiHo” Zirlin encouraged developers to use times of high CPW as a chance to experiment and prepare for future market expansions.

“Create new games/product lines, consolidate our market share, and get ready for the next market expansion,” Zirlin said in an April 11 post on X.

Zirlin believes that these “coiling phases” are essential for preparing for the next phase of growth when market sentiment shifts in favor of crypto.

While gaming and gambling campaigns carry hefty costs, DeFi and CeFi (Centralized Finance) campaigns present a more cost-efficient option for attracting new crypto users. According to Nadler, campaigns in these sectors have a median CPW of just $2.79, with the lower quartile dropping to as low as $0.10.

The lower costs in DeFi and CeFi can be attributed to the relative ease of attracting new users who are eager to explore the benefits of decentralized and centralized financial systems. These sectors have seen widespread adoption, especially among those already familiar with the core principles of crypto.

How Market Cycles Impact User Acquisition Costs

The market cycle also plays a crucial role in how much it costs to acquire users in different crypto sectors. Nadler pointed out that premium markets—such as the U.S. and Western Europe—are typically cheaper to target during bull runs when crypto sentiment is positive. However, during market downturns, the cost of acquiring users in these regions can skyrocket.

“While these markets provide scale and quality during bull runs, they become significantly more expensive when sentiment turns bearish, making them less sustainable during downturns,” Nadler explained.

For example, between Q1 and Q3 of 2024, CPW in the U.S. increased by four times, and in Western Europe, it surged by 27 times, as markets consolidated and interest from crypto wallet holders declined.

On the other hand, emerging markets like Latin America and Eastern Europe offer a stark contrast to the high costs of premium markets. These regions provide “exceptionally low CPW” under favorable conditions, making them attractive targets for crypto marketers. However, Nadler warned that these markets also experience extreme cost volatility, which can make user acquisition strategies riskier.

Emerging markets can be a double-edged sword for marketers: while the cost per wallet is lower, fluctuations in market sentiment and regional economic conditions can lead to unpredictable spikes in user acquisition costs.