The Sugar Crash: performance marketing loses its sweetness

Since SXSW back in March, I’ve seen more and more cracks appear in the relationship between performance marketing and the industry historically most reliant on it: mobile gaming.

Candy Crush and its mobile gaming peers are part of a category so deeply hooked on performance marketing that the cost of acquisition now eats into the bottom line in a way that has become unsustainable. Money talks, and a new generation of businesses waking up to the power,  and the value of investing in brands.

Wind the clock back 5 years and it’s certainly easy to see why budgets were diverted away from more traditional channels with their lack of accountability. Performance marketing promised growth in an active user base with an easily measurable ROI; invest X and acquire Y. So, what’s changed?

Mobile gaming has reached saturation point. It’s become commoditised. Of all the games released last year, only 5 made it into the top 100 downloads and none of those broke into the top 75. It’s harder than ever to get a portion of that coveted share of the phone. Add to that the diffusion of traditional console games onto mobile devices and it has become a space so competitive that a game really has to earn its place.

Game bosses are finally looking for new ways to acquire users and these involve narrative, emotion, brand, and budget!

At SXSW I listened to Pixel United boss Michael Lang launch their Shadow Legends short films, a collaboration with some of the best creative minds in Hollywood. It felt almost surreal to see a mid-core mobile game given narrative, and the characters given a back story. But… the most interesting element by far was his candid response to the question ‘what does success look like?’. His response… a reduction in our cost of acquisition, “You can’t simply buy audiences anymore, we need to give people reasons to download. Simply putting a game under someone’s nose who already plays a similar game just isn’t enough”.

It’s not new news that gaming is inspiring other forms of content; even Tetris has its own big-budget Apple movie. What feels different is the explicit intention to drive down the reliance on performance marketing in this space. I believe it still has a place, but performance marketing certainly isn’t as sweet as it used to be.

By: Fleur Horner

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