Don’t expect to see many cryptocurrency ads for a minute. The companies behind them are cutting costs wherever possible, including advertising that costs huge sums of money but is difficult to monitor for effectiveness.
It’s all they can do to weather the violent storm of volatility that has been swirling around the cryptocurrency space since last fall. The cryptocurrency market has plummeted in value from $3 trillion to about $900 billion since November, and analysts predict the collapse will continue.
This environment has triggered a battle among investors for the existing one-third of an acre. When there are not necessarily a bunch of buyers, cashing out cryptocurrency seems to have become a problem faced by ordinary investors. Here’s the problem: the more panic investors get in cryptocurrencies, the more they pump these currencies into the market, leading to oversupply and limited demand. That's bad news for any company that stokes belief among investors that cryptocurrencies will make them richer. That belief has certainly been shaken, and with it, the views of cryptocurrency bosses.
The fast-growth, short-term mentality that guided many of them over the past two years has warped into a more conservative, survivalist mentality. Companies are cutting costs because the market has lost as much value as cryptocurrencies. As always, advertising dollars are among the first to go.
Zachary Greene, founder and CEO of GreeneryFinancial.com, a cryptocurrency investment and financial website, said: "I can tell you that spending at these companies has dropped by an average of about 70% in the past few months. Due to advertising revenue and other Revenue has been lost due to the economic downturn, and we have had to stop all marketing we were doing ourselves, as well as temporarily lay off some team members and reduce the hours of others over the last month. "
The pressure to survive comes fast for cryptocurrency companies. . Just earlier this year, they were spending millions on advertising during the Super Bowl. Now, they barely have any advertising. According to data tracked by digital advertising intelligence platform Pathmatics, digital ad spending by 10 cryptocurrency advertisers has dropped by approximately 90% since November. Worse, no one knows when those ad dollars will be restored. We must emphasize when rather than if.
Of course, there are true believers, thinkers who believe that these virtual currencies are here to stay. But they were not the real targets of cryptocurrency advertisers. Instead, they are looking for new investors, attracted to the industry due to FOMO. Now, that fear is much less common than ever before. Instead, they regretted their involvement. The last thing cryptocurrency advertisers are thinking about is chasing new investors, who are more conservative than before.
Dion Guillaume, global head of PR and communications at cryptocurrency exchange Gate.io, said: "From what I've seen, the sponsorships that have gone live will be honored, but it's hard for me to see anything else coming through, at least in crypto." The currency winter continues. Like any industry, the cryptocurrency industry has to make some tough decisions during hard times. "
Pull it or push it." Shift information or narrow it down. Stop acquiring new customers or focus on a leaner acquisition model; marketers are trying to understand all of this and more as they match the ebbs and flows of the market.
uses the ad spending of the largest cryptocurrency advertisers as an example. It’s in a state of flux, according to MediaRadar’s analysis of 200 cryptocurrency exchanges and currencies’ advertising across national television, magazines, newspapers, and online channels such as websites, podcasts, Facebook, and YouTube.
Coinbase’s ad spending dropped 98% between February and March. A month later, in April, this expenditure was cut by another 68%. Spending then began to recover in May and was 17 times higher than the previous month. The situation is similar at Crypto.com. Spending fell 71% in March compared with the previous month. In April, its spending was cut another 68%. Like Coinbase, Crypto.com increased advertising in May, with a 70% increase over the previous month.
Granted, this fluctuation in ad spending is not all due to cost-cutting. It's more complicated than that. First, the lack of major sporting events like the NFL season and the Winter Olympics may be a factor in the advertising decline. Likewise, advertising in this market is often driven by the price of a cryptocurrency and its performance in the market. Not to mention the current hostility toward these companies.
Canada-based NFT lawyer Harrison Jordan said: "Cryptocurrency advertising has taken a hit recently. As the market collapsed, brands were more hesitant to have a relationship with cryptocurrencies."
Like many things, this pullback is gradual occurring. After the Super Bowl, cryptocurrency advertisers started pulling back on ads after spending so much money together. This quickly became more severe as the market collapse deepened.
Ad spending on linear TV impressions from the top five U.S. cryptocurrency advertisers fell sharply in April 2022, according to data from TV insights and analytics firm Samba TV. Prior to that, from October 2021 to February 2022, more than Cryptocurrency brand steadily built on Super Bowl ad. Between February and May 2022, total linear ad impressions for these cryptocurrency advertisers fell by 64%.
Vice President of TV insights and analytics company Samba TV, Dallas Lawrence said: “As the cryptocurrency market hit rock bottom, crypto advertisers quickly reined in ad spend, clearly demonstrating the gap between valuations and the willingness to move closer to advertising. Correlation".
There is no doubt that advertising demand has plummeted. But they are not entirely free from advertising. Few cryptocurrency companies can afford to do this. Not when customer acquisition is so important, especially for exchanges like Coinbase and FTX. They must continue to spend, albeit in a more measured and meaningful way -- or at least those companies that can afford to do so must. The reality is that some of these companies are not smart enough to have a strong war chest ready for stormy times. For those companies that do, advertising dollars are shifting away from media deals and towards more purposeful advertising strategies and a greater focus on improving the underlying product.
Pat Larsen, CEO and co-founder of cryptocurrency tax software ZenLedger, said: “Depending on your product’s role in all of this, brands may need to rely on messaging to support their users in different ways. By finding ways to provide value and ways to help users successfully weather the bear market, brands can affirm their role in consumers' lives."
Bottom line: Cryptocurrency companies are using this time to strengthen their long-term strategies. After all, volatility is normal in this market, and while this turbulent period has been exacerbated by economic turmoil, industry observers are certain that it will eventually bounce back -- just like it has done several times before. Whenever this moment occurs, investors and business brands will quickly jump back into it. Cryptocurrency marketers will hope to capitalize on this hype to expand their brands.
"In the short term, ad executives are having to rethink their media plans, but it allows for new conversations and strategies across the board," said Michael Gaizutis, founder and chief experience officer of RNO1, an experience design agency for technology, e-commerce and Web3. Cryptocurrency and the digital ecosystem are here to stay: from cryptocurrencies to digital assets – to the future of metadata. Those who embrace this now will reap huge rewards in the near future."
