Sergino Dest of USA and Milad Mohammadi of Iran battle for the ball during the FIFA World Cup Qatar 2022 Group B match between IR Iran and USA at Al Thumama Stadium on November 29, 2022 in Doha, Qatar.
Matteo Ciambelli | Defodi Images | Getty Images
There were Super Bowl ads, arena sponsorships and celebrity endorsements. TV commercials landed during the nightly news. Money flooded onto Facebook, Twitter and TikTok.
Crypto companies were spending anywhere and everywhere.
Through October of 2022, crypto-related brands shelled out $223 million on ads in the U.S., up 150% from $89 million for all of last year, according to MediaRadar. Few were as aggressive as Crypto.com, which said in late 2021 it was committing $100 million to an ad campaign that would feature Matt Damon and run across 20 countries. The company is an official sponsor of the 2022 World Cup taking place in Qatar.
What the crypto industry giveth, it can taketh away.
The stunning collapse this month of cryptocurrency exchange FTX and founder Sam Bankman-Fried’s broader empire spells further trouble for ad-supported media businesses that had come to see crypto as a new growth engine with money to burn. And FTX is far from the only problem, as the contagion has been spreading for months.
Coinbase has lost over 80% of its value and the company cut 18% of its staff in June, when CEO Brian Armstrong admitted the business grew too quickly and stressed “the need to manage expenses.” Crypto.com has reportedly cut 40% of its workforce, eToro downsized by 6% and in July canceled a planned merger with a special purpose acquisition company, and BlockFi just declared bankruptcy.
“Crypto winter is a crypto advertising winter,” said Grant Harbin, CEO of performance marketing firm Headlight, which has worked with companies in the industry. “There’s probably very little consideration on scaling advertising budgets right now.”
In the third quarter of this year, the top crypto advertisers spent just $35 million on ads, according to MediaRadar, an 80% drop from the first quarter, which got a huge boost from the country’s single biggest sporting event — the Super Bowl.
The pullback in spending, which is expected to intensify given the industry’s deepening turmoil, is notable as ad-based companies face broader challenges from soaring inflation and fears of a recession. But while crypto represented a promising area for growth, it still makes up a tiny portion of the overall ad market.
Companies overall are expected to spend almost $89 billion on TV ads this year, across linear programming and connected devices, and close to $250 billion on digital ads, according to Insider Intelligence.
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