Don't miss
  • 2,000
  • 5,500
  • 5,791
  • 118

How much does it cost to acquire a Facebook customer?

By on May 9, 2011

Customer acquisition is one of the biggest challenges on Facebook.

Since Facebook shut down the flow of viral customers (or, as some call it, stopped the wall spam), companies have had to spend significant money on acquiring new users. Some reports suggest that Zynga is spending $100 million a year on Facebook marketing. (According to Raf Keustermans, former marketing director of Playfish).

But if you’re modelling a social game on Facebook, how much should you put in for customer acquisition?

Portalarium logo

Dallas Snell, co-founder and head of development at Richard Garriott’s Portalarium has an answer. He told AdAge:

“Last year, Mr. Snell said he could buy an ad for 15 cents to 20 cents a click, but now, those same ads are costing as much as $2 a click — and not getting much action. In the first six months of his game release, Mr. Snell said Portalarium spent around $50,000 on Facebook advertising.”

That’s $2 CPC, not per customer. So if you are only managing to convert 10% of clicks to players, your CPA is $20. And then you need to convert those people to payers…

(Interestingly, on the third page of the article, Dallas says that he spends $1 per paying customer on Facebook. Impressive, given the numbers above)

It’s pretty tough out there. If you need to spend that much money on marketing, you better have a good retention and monetisation strategy.

Otherwise, you’ll be pouring marketing money into a bottomless pit.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • Anonymous

    I suspect a lof of people *are* just pouring money into a bottomless pit in this case. If you got there first, like zynga, you avoided all this mess, but what we are looking at now, (just my guess) is a lot of companies with VC money who look at zynga and dont realise that they may not be able to replicate that situation.

    How many big and genuinely profitable facebook-game developers exist right now who staretd acquiring custoemrs after the wall spamming was stopped?

    I suspect nobody in the VC meetings asked that question. I’ve tried facebook ads twice myself, selling a $22 game, and concluded they are unprofitable for my case.

  • Anonymous

    I suspect a lof of people *are* just pouring money into a bottomless pit in this case. If you got there first, like zynga, you avoided all this mess, but what we are looking at now, (just my guess) is a lot of companies with VC money who look at zynga and dont realise that they may not be able to replicate that situation.

    How many big and genuinely profitable facebook-game developers exist right now who staretd acquiring custoemrs after the wall spamming was stopped?

    I suspect nobody in the VC meetings asked that question. I’ve tried facebook ads twice myself, selling a $22 game, and concluded they are unprofitable for my case.

  • http://twitter.com/pcmacgames Celso Riva

    @cliffharris:disqus I think might be because FB works better with casual players, so not really your target. Still is true that I gave up on FB ads too since most people there expect to play the “free to play games” and not normal shareware games.

  • http://www.gamesbrief.com Nicholas Lovell

    Indeed, but Facebook ads are all about trying to find the whales who will spend much more than $22 on a single game. If you can find people who want to spend tens or hundreds of dollars on a game, that may make it work better (plus you need hypereffective conversion funnels)

  • http://www.webcada.com web design

    omg! people now a days are smarter than they thought. maybe thats one of the reason of the decline and too much marketing budget allocated.