Last year, the Super Bowl was the crypto world's coming out party.
Buzzy firms shelled out millions of dollars on ads encouraging viewers not to be afraid of this new-fangled digital investment — and for God's sake don't miss out on this exciting opportunity!
This Sunday, you can expect a lot less noise from Team Crypto.
Here's the deal: In the year since those celebrity-packed ads debuted, the entire crypto industry has been rattled by a collapse in digital asset values. Bankruptcies began to pile up over the summer.
Then the real pain started.
Of the four crypto or crypto-affiliated companies that advertised in the Super Bowl last year, one (FTX) has collapsed completely. The others (Coinbase, Crypto.com and eToro) have all fought against industry headwinds. Shares of Coinbase, the only publicly traded company in the group, have fallen more than 60% since its "floating QR code" ad became one of the most talked-about spots.
Don't expect any of those companies to be back this year. FTX is bankrupt and under criminal investigation by federal prosecutors. Etoro, a multi-asset trading platform, confirmed to CNN it would not be splurging on an ad this year, saying that while it continues to invest heavily in marketing, "we dial up or down specific channels based on many factors including market conditions."
Coinbase declined to comment. Representatives for Crypto.com — the company behind the ad featuring LeBron James telling his younger self to "call your own shots" — didn't respond to requests for comment.
To be sure, crypto is down but not out. And sports advertising remains a key sector for those companies. That's largely because the Venn diagram of crypto-dabblers and sports enthusiasts has significant overlap. Both are largely male, young and more likely to embrace risk.
But turmoil in the crypto space means marketers are changing their tactics.
The tone has shifted toward "Web3-driven fan engagement over crypto-specific advertising," said Silvia Lacayo, head of marketing at crypto exchange Bitstamp US. (Web3 refers to a future internet framework that is decentralized and gives consumers more control over their own data). "Crypto firms are focusing less on crypto advertising and more on investing in better user experiences, products, and customer service," Lacayo added.
Although we don't yet know the final lineup of advertisers for the Super Bowl, the usual suspects — beer, snacks, cars — are on deck.
"The fact that the crypto players are not going to be on the Super Bowl reflects the fact that that world has profoundly changed," Tim Calkins, a professor of marketing at Northwestern University's Kellogg School of Management, told me. "Last year it was an exuberant time for crypto ... This year, everything is different."
What a difference a year makes...
A year ago, FTX fetched a private valuation of around $32 billion. Its Super Bowl ads starred Tom Brady and Gisele Bundchen telling you about this cool new way to invest, just download the app and start raking in wealth.
But just nine months after the big marketing splash, FTX was filing for bankruptcy and its executives were being investigated for fraud.
It's not only the "crypto winter" that's changed the mood this year. Higher interest rates, stubborn inflation and the end of pandemic-era stimulus money has put a damper on all financial markets. Given the uncertainties, Calkins tells me, you can expect to see a slightly less exuberant tone in the Super Bowl's ads.
"Our economy's in a strange place," Calkins says. "So if you're an advertiser, it's hard to know — how do you play that?"
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