Amidst the current crypto market downturn, crypto firms have naturally sought measures to reduce spending. Several have opted for job cuts and downsizing of their workforce. However, reports indicate that expenditure on marketing, especially TV advertising, has also taken a significant hit, with glitzy commercials featuring celebrities disappearing recently.
Total TV Ad Spend For July Falls To $36,000
According to TV-ad measurement company ISpot.tv Inc., spending by the major crypto firms decreased by 99.9% to $36,000 in July in the US. The value is the lowest recorded since January 2021 and is significantly down from the peak of $84.5 million in February 2022.
The high in February came as big firms flooded the airwaves with adverts around the time of the Super Bowl. The likes of Crypto.com, FTX US, and Coinbase splurged on high-profile ads to raise awareness about their services. Glitzy and expensive ads featuring Matt Damon, LeBron James, and Tom Brady aired with Crypto.com’s ad campaign costing an estimated $65 million.
Accordingly, the industry’s drop in national TV marketing over the four months between February and July coincided with the massive sell-off in digital assets. Bitcoin has seen its value decline by over 50% since March. Meanwhile, a raft of bankruptcies and increased scrutiny on the industry by authorities has seen interest wane significantly.
Several big firms have opted to scale back on paid advertising, with Coinbase informing its shareholders of this plan via a letter. The reduction in the advertising budget has led to experts warning ad sellers to manage their expectations about vertical growth in 2022. Eric Haggstrom, director of business intelligence at Advertiser Perceptions, issued this warning. He said,
“Crypto has been a boom and bust industry since its inception, and advertising budgets will follow the same trajectory.”
Furthermore, the decline in ad budget has coincided with a lighter sports schedule in the US. In February, the end of the National Football League (NFL) season—America’s most watched sport—brought less demand for TV advertising from cryptocurrency companies. Meanwhile, the off-season has seen the total investment-services sector decrease national TV spending to $17.4 million in July, an 87% decrease from February.
Crypto Ads Could Rebound In The Future
There is a strong possibility that demand for TV ads by crypto companies will come back once the sports schedule starts in the fall. However, experts believe there may be a considerable change in the message.
According to Bill Daddi, head of marketing firm Daddi Brand Communications, the dread of losing out and seizing the day has been the main theme for ads so far. However, a shift towards education and rebuilding investor confidence may be a better focus considering the current market turmoil.
Even though TV ad expenditure is declining, sports partnership advertising remains very popular. A Financial Review report revealed that over the previous 18 months, cryptocurrency firms like Binance Holdings, OKX, and FTX spent over $2.4 billion on sports marketing. A partnership deal between English premier league champions Manchester City and OKX reportedly cost $12 million. Meanwhile, FTX secured the naming rights to the Miami NBA stadium for 40 years in a deal worth $135 million.
This article originally appeared on The Tokenist
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