After spending “hundreds of millions of dollars” on Super Bowl campaigns, sponsorship deals, and ads, most crypto firms cut spending on marketing. This was reported by The Wall Street Journal.
The reason for the revision was the downturn in the market and the increased attention of regulators after the collapse of Terra.
Since November, when bitcoin reached ATH on the verge of $69,000, the total advertising spend of key industry players has fallen by 90% or more. These figures were given by the representative of the research company Sensor Tower Dennis Yeh. He analyzed data from various platforms, including Facebook, YouTube and Hulu.
A similar situation is observed in the segment of traditional TV and streaming services, according to iSpot.tv. Tyler Babin, the firm's senior brand analyst, added that the lack of significant sporting events like the Olympics has contributed in part to the performance.
Activity in the field was reduced by Crypto.com and Gemini Trust. The first, after spending $40 million in January, set aside $2.1 million in May for Super Bowl ads. The second last month spent $478,000 — eight times less than in November ($3.8 million).
Coinbase was no exception after negative results for the first quarter. The focus of the company has shifted to the TV channel – after the November $1.5 million, expenses increased to $2.7 million due to the placement of a new ad that ridicules the message about the death of bitcoin.
FTX's marketing spending has increased. Digital and TV ad spending increased from $3 million in November to $5.2 million. The cryptocurrency exchange has hired Shaquille O'Neal as its ambassador.
eToro's spending remained about the same as in November ($1 million). Its representative explained that this is due to the key importance of the US market for the development of the company.
“It will take a combination of advertising and other forms of communication to restore what could be called the shaken image of the stability of investing in cryptocurrencies,” commented Andrew Frank, vice president and research firm Gartner.
Another challenge for crypto companies was the actions of regulators. In May, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau announced a crackdown on firms that claim to offer deposit protection.
In June, the SEC launched a public campaign warning of the risks for investors relying on opinion celebrities.
Grayscale Investments CEO Michael Sonnenschein said the sector needs to shift its focus to educating consumers about the benefits and risks of a still-emerging asset class. A similar approach, in particular, is implemented by Voyager Digital LLC, noted in the WSJ.
Recall, CEO of Binance Changpeng Zhao said that the crypto winter is the right time to hire new employees and further develop the business.
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