Cost of acquiring customers for decryption and encryption products: How expensive are crypto users?

Original title:The Numbers Behind Cost Per Wallet

Original author: Asaf Nadler, Chief Operating Officer of Addressable

Original translation: Luffy, Foresight News

About a month ago, I published an article about "Cost Per Wallet" (CPW). This is a quantitative metric for growth that is unique to the Web3 field, which measures the cost of access for visitors to websites with wallets installed on their browsers.

This article has received extremely enthusiastic response. Marketers, advertising agencies and project founders joined the discussion to share their ideas, challenges and data points. One thing is very clear: CPW touches everyone's sensitive nerves. Among the numerous private messages and replies, one question is particularly prominent:

"Tell me about the cost. What is the situation in a specific time, in a specific region, on a specific platform? Will success or not change the way costs are calculated?"

This article will answer this question with detailed data. I analyzed more than 200 programmatic advertising campaigns launched by more than 70 advertisers on the Addressable platform in 2024, targeting more than 1.5 million users worldwide, and aiming to study CPW's performance in different market cycles, regions, campaigns, and audience segments.

2024 CPW Trend: How does market cycle affect costs?

Bull and Bear Cycle: 2024 has experienced two completely different market cycles. At the beginning of the year, the market performed strongly, with a bull market in the first quarter, with the total market value of cryptocurrencies growing by 21% month-on-month to $1.7 trillion. But this momentum reversed in the second quarter, down 12% month-on-month, and the situation further deteriorated in the third quarter, with the market falling 27% month-on-month. However, in the fourth quarter, the market rebounded strongly, with a month-on-month increase of 109%, entering another bull market stage. These market changes naturally affect CPW, but the impact is not the same.

The fluctuations of CPW in different market cycles reveal more than just the expected model of low bull market costs and high bear market costs. It also highlights the sensitivity of different regions to market volatility, the importance of timing, and the strategic advantages of targeting markets with strong resistance to declines.

Developed markets: Developed markets like the United States and Western Europe often provide more predictable CPW during the bull market, but they are also highly elastic. In the first quarter, the US CPW remained at $5.87, but as market sentiment changed in the third quarter, costs soared nearly 4 times to $22.81. Western Europe also showed a similar pattern, with more drastic volatility, soaring 27 times from US$1.18 to US$32.79. While these markets can provide scale and quality during bull markets, when market sentiment turns to bear markets, costs increase significantly, making them less sustainable during market downturns.

Emerging markets: Showing different risk-reward situations. Under favorable conditions, their CPW is extremely low, but cost fluctuations can be extremely severe. For example, the CPW in Latin America was as low as nearly free USD 0.56 in the first quarter, but by the third quarter, the cost soared 60 times to USD 34.38, reflecting the sudden local liquidity restrictions and demand changes. The rise in Eastern Europe was even more astonishing, with CPW soaring 99 times from USD 0.21 to USD 20.79, indicating that costs may rise sharply when market conditions deteriorate.

Southeast Asia: The most stable performance in each market cycle, with CPW fluctuating within 5 times, from $3.73 in the first quarter to $16.61 in the third quarter. This stability suggests that local market factors, adoption curves or advertiser demands may create a more predictable environment that makes it attractive for brands that want to keep costs stable under different macro conditions, especially for projects that want to test product usage without being affected by market cycles.

The key point is that the market cycle not only affects the CPW, but also determines when and where to attract wallet holders. Although developed regions are quite efficient in bull markets, they are expensive when the market is down. Emerging markets are extremely low in costs, but with great volatility. With its relative stability, Southeast Asia may have the best long-term potential for brands that want to reduce risks in different market cycles.

Best performing with worst marketing campaigns CPW

Market cycles are not the only factor. Best-performing marketing activities always maintain a low CPW, even during market downturns. In fact, the top 25% of marketing activities, even in the bear cycle, cost per wallet to acquire customers is only $6-8, which is amazing. Meanwhile, poor-performing marketing campaigns have CPWs that fluctuate between $4.68 and $44.79.

This performance gap can be attributed to product market fit (PMF), community strength, market popularity, incentives, and creative execution. Marketing activities that are highly compatible with the audience and optimized for promotional information can maintain an affordable CPW regardless of the market conditions.

For marketing campaigns trapped by high CPW, switching to low-cost areas is not the only solution. Optimizing target audience positioning, publicity information, incentives and creative strategies can all improve efficiency and keep CPW stable in any market.

CPW segmented by audience

Decentralized Finance (DeFi)/Centralized Finance (CeFi) marketing activities are the most cost-effective, with median CPW of $2.79 and lower quartiles of just $0.10. The L1/L2 project followed closely with a median CPW of $3.23, reflecting its high adoption rate.

Gaming and betting marketing activities are the highest cost, with median CPW of $8.74 and lower quartiles of $3.40, perhaps due to high user churn, frequent speculation and fierce competition. If Web3 games are really "unstoppable", we need to find a stronger user acquisition engine that makes it as sustainable as Web2 games.

Conclusion: Using CPW as Web3 Growth Framework

CPW is not determined only by the market cycle, it is also affected by the effectiveness of marketing activities execution. The best-performing 25% of marketing activities kept the CPW at $6-8 throughout the year, even during market downturns, while the CPW for poor-performing marketing activities fluctuated significantly from $4.68 to $44.79. This proves that market conditions are not an excuse. Marketing teams that track data, optimize target audience positioning, and repeatedly polish publicity information and incentives can outperform the market cycle; regardless of macro trends, they can maintain efficient costs.

This also prompts us to change our strategy when launching our products. Targeting big investors in the United States during a bear market is an extremely expensive gamble, and CPW will reach unsustainable levels. On the contrary, starting with more stable and cost-effective regions like Southeast Asia will allow brands to optimize their product market fit before expanding to developed markets. Teams that do not adopt this strategy may run out of budget prematurely before demonstrating market demand and optimizing conversion rates.

Finally, these data from ad-driven marketing campaigns challenge the claim that Web3 advertising "doesn't work". In fact, these results suggest that ad-driven Web3 growth is measurable and scalable, rather than a dead end.