While the market is still growing over the past year, many crypto companies have spent hundreds of millions of dollars on advertising, such as Super Bowl ads, stadium naming, celebrity endorsements, and more. However, when the overall market capital tightens and companies lay off workers just to survive the bear market, these companies that have spent a lot of money on advertising in the past have also greatly reduced their marketing expenditures.
Crypto business marketing spending plummets
According to the Wall Street Journal, since Bitcoin peaked at $68,991 in November last year, ad spending by major crypto brands on digital platforms such as YouTube and Facebook have dwindled, falling about 90 percent from the peak. And in a bad market, coupled with the lack of major events such as the Super Bowl or the Winter Olympics recently, TV advertising spending has also dropped significantly.
“Overall, the level of macroeconomic confidence is pretty low right now. Plus when the price of bitcoin is low, there tends to be less engagement in apps and new customers,” said Dennis Yeh, an analyst at market research firm Sensor Tower.
According to the report, the following are the changes in digital and TV advertising spending of various crypto companies during this period:
1. Crypto.com spending dropped from $15 million in November 2021 and $40 million in January to $2.1 million in May, a drop of about 95%.
2. Gemini’s spending fell from $3.8 million in November to $478,000 in May, a drop of about 87%.
3. Coinbase spending fell from $31 million in February to $2.7 million in May, a drop of about 91%.
4. eToro’s payouts are roughly the same, falling around $1 million.
However, not all companies have reduced their ad spending. FTX’s ad spending in November last year was about $3 million, and in May this year, it increased by about 73% to $5.2 million. On June 1, it announced the hiring of NBA Lakers superstar Shaquille. O’Neal acts as a brand ambassador.
Industry enters cold winter
In addition to being hit by the downturn, regulators have also paid more attention to the crypto market due to recent industry scandals, and the American Stock Exchange warned investors in June of companies that rely heavily on celebrity endorsements.
Taylor Grimes, head of business development at the U.S. advertising agency Martin Agency, also said that he has received more than a dozen requests for proposals from crypto brands in 2021 and early 2022, but these requests have not been as strong as they used to be recently.
“Until a few months ago, it was an important new area and a very creative area. However, in recent weeks, the requests have largely dried up,” says Taylor Grimes.
In any case, the boom has its own cycle, and when reducing spending during a bear market, companies have more time to focus on construction and development. Michael Sonnenshein, chief executive of digital asset management firm Grayscale, said it was time for the industry to turn to educating consumers about the benefits and risks of emerging asset classes.
There are also many companies that choose to invest in the mining machine business, and the monetary cost and risk generated through mining are relatively lower.
Post time: Aug-17-2022