Why top PC free-to-play publishers run UA on a CPA model

Marketing games used to be simpler.

Previously, companies paid for advertising to buy eyeballs and awareness. That might have worked in the days of single-player boxed games, but it certainly doesn't for free-to-play PC titles

Some publishers do still use the old ways; Amit Nagrani, head of business development and client success at performance marketing specialist PWN Games – which is celebrating its tenth anniversary this year – says that on PC, user acquisition is still "heavily focused on awareness and consideration" campaigns – brand and creator pushes, and paid media on the likes of Meta, Google, YouTube and Twitch. These kinds of campaigns still make sense for premium games, but not modern live-service free-to-play experiences, which are better served by a cost-per-action (CPA) approach – a method of UA that is becoming increasingly common.

"With premium games, the purchase is the whole thing," Nagrani explains. "The spend goes heavily into awareness and consideration through the pre-launch window, building recognition and wishlists, and then UA kicks in hard at launch as a boost. That's a sensible way to do it, because once someone buys and installs, the revenue is in.

"Live service is a different proposition, free-to-play especially. You don't catch the launch wave and call it done. You need players arriving steadily, year after year. And getting someone to play is only the start. You've got to keep them engaged and eventually get them converting, because that's where the revenue actually comes from."

As well as more traditional UA being at odds with live-service free-to-play titles, it's also riskier financially.

"Publishers used to expect to recoup their acquisition costs back within 30 days, partly because a lot of successful PC publishers right now came from the mobile free-to-play world," Nagrani says. "Now, depending on the genre and market, we’re often talking about a three to twelve month payback window. And when you’re looking that far out, you need a lot more confidence in the quality of the players you’re bringing in."

In the past, user acquisition on PC has focused on cost-per-mille (CPM) and cost-per-click (CPC). You can read more about the different UA models here.

The former sees companies paying for every thousand impressions on a fixed basis; in short, a publisher has to pay if someone sees their advert, regardless of whether they engaged with it. Meanwhile, CPC has companies paying on whether someone clicks on an advert, though this doesn't show anything other than the person in question was curious.

"You need players arriving steadily, year after year. And getting someone to play is only the start"

There's a third way for UA on PC: CPA, aka cost-per-action or cost-per-acquisition. This is a more directed form of user acquisition that rewards an advert achieving specifically defined goals.

"You pay when a defined 'action' happens, and you choose which 'action' that is," Nagrani explains. "It moves as the game moves through its lifecycle, and choosing it well is an important conversation I have with a game publisher before we go live."

This works well with the free-to-play games that dominate PC these days, as the defined action can change a great deal across a game's lifespan. Before launch, a CPA campaign can reward people signing up for information about a game.

"There are two versions. Single opt-in (SOI) means the player submits their details and that counts. Double opt-in (DOI) means they also confirm through a verification email first," Nagrani says. "DOI costs more because you’re basically paying to filter out people who weren’t that interested in the first place, but it can lead to better conversion at launch. Which one makes sense really depends on how confident the game publisher is in their funnel and how well they expect that initial interest to convert later on."

Then, at launch, Nagrani says a "natural action" is a CPA campaign where the set action is someone installing the game, though this is only a starting point.

"Experienced publishers rarely stop there," he continues. "They’ll usually add a qualification layer, so the install only counts if the player reaches D1 or D7 [user retention metrics that show a player stayed for one day or seven days, respectively], or completes the tutorial. That way, you’re paying for a player rather than just a download, which matters a lot for a live-service title where the install is really just the starting point."

From there, CPA campaigns can reward user engagement – players buying something in-game for the first time, for example – but the cost of paying for these UA pushes goes up.

"The trade-off is always the same: the further down the funnel you buy, the more certainty you're paying for, and certainty is never free," Nagrani says. "The cost per conversion goes up, and in some cases volume gets harder to find.

"Everything is built around LTV. CPM and CPC don't connect to it. So the return stops being something you find out afterwards"

"There's no setting that's right for everyone. It depends on the genre, where the title sits in its life, and what that publisher needs this quarter, which is why we build a plan around those questions with our game publisher client together rather than handing over a rate card."

There's a reason why CPA is a very popular UA model when it comes to top free-to-play PC publishers. There's a direct link between CPA and a game's lifetime value (LTV). This means that a publisher can plan and roughly figure out how much a registered or paying player is worth over the course of more than 90 days. Working back from that means they know how much to pay in UA costs at the start.

"Everything is built around LTV. CPM and CPC don't connect to it. You buy impressions, you buy clicks, and then you hope the rest of the funnel behaves. CPA connects to it directly, because you're paying for the outcome you already modelled," Nagrani says. "So the return stops being something you find out afterwards. If your data says a registered player is worth $30 over 90 days, we set the payout so the maths works inside your payback window. You know your return on ad spend (ROAS) going in, not three months later."

CPA also exposes a truth at the heart of the UA industry; with CPM and CPC models, publishers pay regardless of the outcome. The game companies take on the risk, not the advertising networks.

"On CPM or CPC, if the targeting is off or the creative isn't landing, the publisher still pays," Nagrani says. "With CPA, we're only paid when a qualified conversion happens, so we've got the same reason to find out what's wrong as they do. Both sides are looking at the same number, and that tends to produce a more collaborative working relationship."

"We're only paid when a qualified conversion happens, so we've got the same reason to find out what's wrong as the publisher"

While CPA is the most cost-effective pricing model for user acquisition, it isn't a magic bullet that will work for any game or service. It is one part of an overall strategy, one that relies on the fact that the game being promoted is high enough quality to be worth a user's attention. A bad game cannot be fixed by a better pricing model.

But CPA distributes the risk evenly between the developer or publisher and the marketing firm. A model that pays out based on outcomes means that both sides of the business relationship are incentivised to make sure a product is performing adequately; both have the same underlying incentive to figure out why a game isn't receiving an appropriate amount of attention as maybe it deserves.

Maybe the traffic source is wrong. Maybe the creative isn't communicating the game's value proposition. Maybe one region is dramatically outperforming another. Maybe a particular audience has strong install rates but terrible retention.

The partner has to keep testing because its own revenue also depends on finding the answer rather than just doing the job and handing over a report.

CPA is not the answer to every part of that equation, but for the conversion layer, it offers something increasingly valuable: shared risk and shared incentives. When the publisher only pays when the agreed outcome happens, and the acquisition partner's economics depend on delivering that outcome, both sides have a reason to solve the same problem. As Nagrani puts it: "CPA is a win-win model for game publishers and us. We win only if they win."

Learn more about PWN Games and conversion-driven PC game performance marketing: pwngames.com.