Sergino Dest of USA and Milad Mohammadi of Iran fight for the ball during the FIFA World Cup Qatar 2022 Group B match between IR Iran and USA at Al Thumama Stadium in Doha, Qatar, 29 November 2022 increase.
Matteo Chamberi | Defoddy Images | Getty Images
Crypto companies were spending money everywhere and everywhere.
According to MediaRadar, by October 2022, cryptocurrency-related brands will generate $223 million in advertising in the US, up 150% from $89 million overall last year. Few companies are as aggressive as Crypto.com, which is set to launch in late 2021 committed $100 million For ad campaigns featuring Matt Damon and running in 20 countries.the company is Official sponsor of the 2022 World Cup held in Qatar.
What the crypto industry gives, it can take away.
of Spectacular collapse of cryptocurrency exchange FTX this month And founder Sam Bankman-Fried’s wider empire is creating further problems for ad-supported media companies that have come to see cryptocurrencies as the new growth engine. And FTX isn’t the only problem, as the contagion spreads over months.
coin base lose more than 80% of its value, The company cut 18% of its staff. In June, CEO Brian Armstrong acknowledged the business was growing too fast and stressed the “need to control expenses.” Crypto.com is Reportedly cut 40% of employees, eToro down 10%, in July Cancel A planned merger with a special purpose acquisition company; and BlockFi just declared bankruptcy.
“Crypto winter is crypto advertising winter,” said Grant Harbin, CEO of performance marketing firm Headlight, which has worked with companies in the industry. “Right now, there is probably very little consideration given to increasing advertising budgets.”
According to MediaRadar, in the third quarter of this year, the top crypto advertisers spent just $35 million on advertising, down 80% from the first quarter. It got a big boost from the country’s biggest sporting event, the Super Bowl.
Given the deepening turmoil in the industry, the decline in spending is expected to be even more pronounced. Ad-based companies face broader challenges From fear of rapid inflation and recession. However, although cryptocurrencies are an area of potential growth, they still represent a very small percentage of the total advertising market.
Facebook (including Instagram), snapAccording to SensorTower, Twitter and TikTok together are expected to pull in $57.1 million in advertising from cryptocurrency exchanges this year. This is about the same number as in 2021, but almost all of last year’s spending went to Facebook and Instagram.
of alphabetof Third Quarter Financial Results Announcement company last month condemned Revenue growth has slowed, in part due to cutbacks in advertising spending by crypto companies and other financial firms. Google’s revenue growth was the slowest for all but one quarter since 2013. covid pandemic.
wasted roller coaster
SensorTower data shows that crypto ad spend in digital media surged as prices peaked around October and November last year, before plummeting after the first quarter of this year. In April, the sale of cryptocurrencies began in earnest. Bitcoin When ether Each loses more than half of its value over the next three months.
The Super Bowl sparked a spending spike the industry will never see again. His 30-second spot at his NFL grand finale in February was $6.5 million averagecryptography was a big theme.
According to MediaRadar, Coinbase, Crypto.com, eToro and FTX spent $54 million to match the Super Bowl ad. Coinbase aired a 60-second commercial showing a bouncing QR code that, when scanned, led to a promotion offering a new user $15 worth of his free bitcoin. FTX featured his Larry David in an ad, urging viewers to keep an eye on cryptocurrencies and declaring NFTs to be the “next big thing.” A version of “Fly Me to the Moon” that plays in the eToro commercial.
Advertising costs were not limited to airtime.
In 2021, Crypto.com will pay $700 million to name the home of the Los Angeles Lakers for the next 20 years. FTX has signed his 19-year deal worth $135 million with the NBA’s Miami Heat for naming rights to the team’s arena. Partnering with NBA’s Golden State Warriors The logo was placed on the uniform worn major league baseball umpire.
Miami-Dade County is currently trying to acquire the FTX name. Rubbed from arena. Miami has become a major hub for the cryptocurrency industry, and in September he launched FTX moved US headquarters there from Chicago.Company spread your wings At the city, 3-day crypto weekend Called ‘FTX Off the Grid’ in South Beach in May.
Miami-based venture capitalist Jordan Levy said while other crypto firms are advertising in the city, FTX is on another level.
“No company has a more significant presence in Miami than Bankman-Fried and FTX,” said a managing partner at SBNY (formerly SoftBank New York). “They tried guerrilla marketing to be at the top of the food chain from a perception standpoint.”
The money FTX was spending will likely go to zero. According to SensorTower, the company’s online ad spending quadrupled this year to $13.3 million, about half of which occurred in the first quarter.
According to SensorTower, Crypto.com’s online ad spend plummeted from about $16.2 million in the first quarter to $1.6 million in the third quarter. Also, exchange Gemini, owned by the Winklevoss brothers, cut spending in the first quarter from his $8.5 million to $2,500 in the third quarter.
Coinbase, the only major US-listed exchange, said in it: earnings report This month, third quarter sales and marketing expenses decreased 46% from the prior quarter to $76 million. The company attributes the decline to “our decision to reduce performance marketing due to inefficiencies in spending as the crypto market softens and savings associated with headcount reductions.”
Coinbase did not respond to a request for comment.
A Crypto.com spokesperson said in an email that the company’s $100 million campaign ran from October 2021 to February 2022. ‘ said the spokesperson. This includes World Cup sponsors.
Brad Michelson, eToro’s head of U.S. marketing, said the Israel-based investment platform “will aggressively adjust spending based on performance” and plans to continue building its brand in the U.S. I was.
“It’s no secret that the market is in recession and budgets are being reallocated accordingly,” Michelson said in a statement to CNBC.
The crypto market has suffered recessions in the past, but has bounced back, attracting even more cash and new entrants.
Joseph PanzarellaA high-profile scandal in 2022 will force companies to take a more serious approach when promoting their products, even as the market begins to recover, he said. He says he won’t get it.
Citing the industry’s focus on decentralization and its ability to function without heavy government influence, Panzarella said, “The results they put out are ‘let’s leave it to the Federal Reserve.’ That’s what it was,” he said. “They eat little crows and say, ‘Hey, we’re here now, we’re here now [open to] regulated.”