After spending ‘hundreds of millions of dollars’ on campaigns, sponsorship deals, and advertising on the Super Bowl, most crypto firms have cut marketing spending. The Wall Street Journal reports.
The rethink was driven by the market downturn and heightened regulator scrutiny after the Terra crash.
Since November, when Bitcoin reached an all-time high near $69,000, total advertising spend by key industry players has fallen by 90% or more. These figures were provided by Sensor Tower’s Dennis Yeoh, who analyzed data from various platforms, including Facebook, YouTube and Hulu.
A similar pattern is seen in traditional TV and streaming services, according to iSpot.tv. Tyler Babin, the firm’s senior brand analyst, said that part of the dynamic was due to the absence of major sporting events such as the Olympics.
Crypto.com and Gemini Trust cut activity in the space. The former, after $40 million in spending in January, allocated $2.1 million in May for spots ahead of the Super Bowl. The latter spent $478,000 last month — eight times less than in November ($3.8 million).
Coinbase, the bitcoin exchange, was no exception after negative results for the first quarter. The company shifted its focus to a television channel — after November’s $1.5 million, spending rose to $2.7 million due to airing a new ad, which mocks the notion of the death of Bitcoin.
Marketing spend at FTX rose as well. Spending on digital and TV ads increased from $3 million in November to $5.2 million. The exchange hired Shaquille O’Neal as brand ambassador.
eToro’s expenditures remained roughly at November levels ($1 million). A spokesperson said this reflected the US market’s central importance to the company’s growth.
A combination of advertising and other forms of communication will be needed to restore what could be described as a shaken view of the stability of investing in cryptocurrencies, said Andrew Frank, vice president at Gartner, the research firm.
Regulatory actions posed another challenge for crypto firms. In May, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau said they would crack down on firms that claim to offer deposit protection.
In June the SEC launched a public awareness campaign warning investors against relying on celebrity endorsements.
Grayscale Investments CEO Michael Sonnenshein said the sector needs to shift its emphasis toward informing consumers about the benefits and risks of the still-forming asset class. Voyager Digital LLC has taken a similar approach, noted the WSJ.
Binance CEO Changpeng Zhao said that the crypto winter is a suitable time to hire new staff and to grow the business.
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