Billions Are Spent Marketing Crypto To Sports Fans — Is It Worth It?

Since the 2021 bull run, cryptocurrency displays have been placed on every available sports surface, from stadium name displays and team kits to Formula 1 racing cars. But in the current bear market conditions, it’s hard to calculate the all-encompassing performance of the crazy big screen of 2021.

Australia, where I live, saw a dramatic rise in 2021-2022 for crypto businesses spending heavily on AFL advertising and sponsorship. While it might make sense for a local cryptocurrency exchange, why would a global project spend tons of dollars on a sport that isn't even the main football code in every state, since some of the larger states prefer national rugby? League?

Take, for example, the Staples Center in downtown Los Angeles, home to the Lakers and Clippers of the National Basketball Association, the Kings of the National Hockey League, and the Sparks of the National Women's Basketball Association. On Christmas 2021, it was rebranded as Crypto.com Arena for a $700 million deal.

Although the financial terms of the 20-year deal were not disclosed, it is believed to be the most expensive name rights deal in the history of the sport. Time will tell if the money was well spent. Because Kobe Bryant is the home ground where Kobe Bryant played basketball, many today will refer to it as the Staples Center indefinitely, but the younger generation probably won't.

Crypto.com wasn't the only brand to spend big money on sports deals.

VeChain paid $100 million to display their logo in the arenas of the Ultimate Fighting Championship. Will a barely recognizable logo in front of kickboxing fans on TV attract new customers for your supply chain tracking solutions or new users in the crypto ecosystem?

Is this all wasted spending generated by a bull market, or a wise long-term commitment to promoting cryptocurrency adoption?

Depends on who you ask. Cryptocurrency leaders have sparked a backlash against this practice.

In June of this year, Crypto.com announced the layoff of 260 employees, which means a 5% reduction in headcount. Binance Founder Changpeng “CZ” Zhao tweeted, “A few months ago, it wasn’t easy to turn down Super Bowl advertising, stadium naming rights, and big sponsorship deals, but we made it through by hiring 2,000 jobs for #Binance.”

However, not all sports sponsorship deals are of dubious value, and industry marketers say crypto marketing spending can be justified based on product segmentation and brand authenticity in the crypto market.

wasted spending

Chris Ghent, head of brand strategy at Near Foundation, a carbon-neutral blockchain project, has invested in sports sponsorship but also believes it can be a huge waste of money if done poorly.

“In the past, non-exchange crypto projects have ignored paid media. And without the obvious use cases associated with the huge amounts of money paid for sports marketing sponsorships, branding simply results in the display of a logo.

For these large sports sponsorship deals, the metrics used to determine profits are unclear. But since exchanges are the gateway to cryptocurrency adoption, aren’t they doing everyone else in the industry a favor by spending big money to attract new retail users from the traditional sports community?

Yes, Gent says, “but big sports sponsors are reckless. Earth sponsors the Washington Nationals: what is it for today? “He is referring to the main sponsor of the Terra baseball team in the US capital. He signed a $38.15 million down payment with the Nationals. Then Terra fell apart. Bad press for everyone involved, but the team manages to keep the money.

There are 10 F1 motorsport teams this year, eight of which are sponsored by cryptocurrency companies. We can say that this is smart marketing. A study by global analytics company Nielsen Sports has shown that F1 has the potential to attract close to a billion fans worldwide, with the largest share coming from the 16 to 35 age group. However, the logic of sponsoring a market segment is understandable, but whether it justifies the exorbitant costs is another question.

Some sports sponsors may offer good value for money.

Gent argues that carefully selected sponsorship deals, which are deeply integrated partnerships, can offer good value for money if authentically crafted. The Near Foundation began sponsoring sports facilities such as sailing regattas on the SailGP F50 catamaran. The cost of this transaction was not disclosed.

Ghent insists SailGP's spending is not reckless, as some might argue, such as Bybit, the cryptocurrency exchange that sponsors the Red Bull F1 racing team in a three-year, $150 million deal.

Gent suggests that Nia got the opportunity to embed protocols into sports instead of sticking a logo on something. SailGP is a modern version of the famous America's Cup with F50 carbon boats. All competing ships share the same design and open source data sharing via Oracle Cloud. As a result, the races reflect the high skill of the athletes, unlike F1 racing where only the most funded teams can actually win a championship.

As part of the partnership, SailGP is running a DAO-owned racing team in the short-range protocol. Members of the DAO community can participate in athlete selection, team management, marketing opportunities, operations, and team strategy. He says, “The best form of marketing is when superfans become your most loyal supporters. The Near brand inspires what's happening with technology." Logically, DAO fan ownership means in-game skins and organic marketing engagement directly with esports fans.

Gent told the magazine that the DAO-led team is busy starting this season. Of course, sports team owners' DAOs are experiments, but the bottom line is that authentic marketing of cryptocurrencies means proving that you stay true to the crypto culture by finding a broader market segment.

You could say these are open source boat projects, not centralized private racing car teams with wildly skewed budgets.

Something similar is also being done in British tier four football Crawley Town FC, which was bought by crypto group WAGMI United in April and also plans to create a DAO-run team.

And in July, after voting in favor of the NFT, they signed a new player, midfielder Jayden Davis.

The small club also sold over 10,000 NFTs that year, in stark contrast to football leader Liverpool's NFT collection, which sold poorly, possibly due to a lack of authenticity, and was a marketing disaster. It looks like Crawley Town's mission to reach the top flight of English football has resonated with NFT buyers.

Another link between the brand and the sporting event is that Animoca Brands has secured the naming rights to the Australian Motorcycle Grand Prix and the Aragon event this year and next. Animoca is developing the official blockchain-based MotoGP game called MotoGP Ignition and certainly appreciates the opportunity to bring the game to a global audience of 400 million racing fans.

Crypto Guerrilla Marketing?

In this context, relevance is the key to a good marketing campaign for those who believe in cryptocurrencies.

“Guerrilla marketing in cryptocurrencies is all about contextual relevance,” Gent says. That is, marketing has to do with the nature of the product or protocol.

In marketing parlance, guerrilla marketing is hailed as a way to increase brand visibility and awareness by encouraging the use of non-traditional and less expensive methods such as street art or dance crowd flash mobs.

A DAO based IP like PleasrDAO or ConstitutionDAO is arguably the best guerrilla marketing. It's all based on ownership and "ownership" that protects the networks, Gent says. Ownership and participation in a DAO is, in a sense, the pinnacle of guerrilla marketing. It's not a brand per se, it's an opportunity for fans to feel even more connected to their favorite team.

Marketing Relevance in a Bear Market: Education

Jeff Renaud, CMO and co-founder of crypto marketing agency Invisible North, thinks big sports sponsors are pretty empty: excessive spending for minimal returns. “In large sports companies there is no educational element. The start of 2021 has shown us that inexperienced marketers are overspending. We've seen so much wild spending on partnerships and no real measurement of the impact. "

He says: “The problem is that most people who speculate in cryptocurrencies have no idea what technology they are speculating on.” What do you believe in? You must understand the products.

The solution for crypto companies is education, especially in a bear market. For example, how to simplify the adaptation at the level of marketing costs. Simply put, this means teaching people how to create a wallet and buy cryptocurrencies. Education also plays a key role in preventing societal despair. "For long-term high conviction, education needs to be taken more seriously." Renault in front of a magazine.

“Today, marketing means people stay in the game. Tourists will always leave."

However, Renault argues that there is a pure branding tactic. As a good example, he cites FTX, a cryptocurrency exchange that teamed up with Coachella in February to create NFTs. Ticket history and attendance confirmation, which are digital event reminders, are now a common use case for NFT street credit. In this example, Coachella and FTX have teamed up to turn the NFT into a lifetime pass to a popular music festival.

Renault also believes that branded NFTs based on sports or pop culture have their place. “2021 also showed us that many retail investors need a well-known brand to enter the market,” he says, noting that “NBA Top Shots has been a gateway for startups.” will it be when reserve prices drop and community offerings become desperate? “In hype cycles, just being there has some value. But is this enough to keep the brand alive? He says and adds, “Because this is an exploratory phase, you need some conviction.

Part Two: Bear Marketing for Everyone Else

How do projects that choose to focus on the basics approach marketing, especially during a bear market?

The demographics of the market are segmented, so the first question is: who are you selling to?

Cryptocurrency is full of conspiracies. From new users to players who play with crypto swords. Degens are more likely to fix the situation without resorting to traditional marketing. So everyone else is in the middle of that spirit. This is why market segmentation is critical.

The next question is: what does your company sell? What are your goals or key performance indicators?

Where you are in the cryptosphere determines your marketing forums and spending. Are you focused on customer acquisition or use case analysis? Are you selling a product or building an ecosystem?

Traditional marketing methods are most evident for cryptocurrency exchanges such as Crypto.com, which compete for retail customers as a launching pad for the sale of cryptocurrencies. Exchanges are also the most measurable form of marketing. So a Staples Center deal 20 years from now might not seem so crazy.

But marketing tier-one blockchains like Ethereum or Solana means that developers on board that particular blockchain are a clear target at this stage of development and a quantifiable ROI.

Developers hate marketing

It should be noted that developers don't like or are told what to think; they just need to know where to get information. “Developers are doing their own due diligence. You can't brainwash them, you have to give them the information they want," said Austin Federa, director of communications at Fundación Solana.

“Developers hate commercialization, that's what most people in the field don't understand. No amount of marketing will force developers to work on your platform. You want great tools, great documentation, and a chance to make money on your platform.” ."

Each level 1 blockchain has a foundation that promotes the development of an ecosystem on that blockchain. Conviction is important, Federa explains. “Multi-year time horizons have nothing to do with our future. We are not afraid to spend money, but it should be for something that works,” he says.

Federa explains that, as with any startup, Solana's team is working with "a tight-knit team, so budgets don't change much in a bear market." Target spending. The Solana Foundation, for example, runs hacker homes that resemble actual boot camps and are "expensive but valuable."

You know Solana's target group. “Marketers sometimes think a lot about it. Swords are only part of it. They are important to the cryptocurrency ecosystem and dedicated NFT traders and faucets, but are not usually developers.

But what is affordable crypto marketing and does it work? Lamborghini parked in front of crypto events in New York? Again, the answer depends on who you're selling to. Are you promoting a get-rich-quick dream or a decentralized ideology of changing the world?

Federa simply assumes that informing the community through product explanations is cheap and effective. Value-added marketing for Level 1 blockchain means product explanations. Federa told the magazine that a two-paragraph update on new technology features in its regular e-newsletter is a good example.

“Sounds boring, but developers don't need sophisticated marketing anyway. For developers, we make sure they are aware of the resources available and that the message is relevant to the tools available for them to use."

“The best Solan companies almost never talk to us. Developers who need a firm hand are not the ones who will build the next $2 billion DApp,” says Federa.

Authentic and clear messages by building an ecosystem

Detailed, authentic messaging is key, explains Gent, who joined the Near Foundation in 2021 and has a traditional media buying experience. “Building a crypto brand is the best way to learn how to make crypto projects visible and heard. Building an authentic brand leads to word of mouth, ecosystems scale organically,” says Ghent Magazine.

Gent, who was ridiculed a lot during the ICO boom when projects advertised more partnerships than lines of code were created, says true partnerships are essential to building ecosystems.

“For Near, partnerships are all about integrating products, government services, and building communities. For example, network partnerships offer more opportunities than traditional marketing. "

However, this is once again preaching to the converts, and crypto projects are struggling to tell short stories to the general public. Lots of inner pride. Of course, part of the problematic narrative about cryptocurrencies is that one segment of the market is literally a punk who hates power.

“There are huge communication issues – most crypto traders rely on hype. He is too focused on insider information. Organic social media and Twitter are considered benchmarks,” Ghent laments.

He also points out that the origin story of many cryptocurrency traders is not related to marketing. “Their backgrounds are often too academic or product-focused, so building a brand and sharing the right case studies in the right context doesn’t come naturally to many.”

Featured advertising is the way

Companies should focus on product ease of use, Gent says, citing the example of Brave Browser, a private web browser that rewards users for viewing ads.

So tokenization is perhaps the best form of crypto guerrilla marketing.

To date, Gent is collaborating with Brave by Alpha, so Gent has witnessed their success with his own eyes. «Основанный бывшим руководством Mozilla, Brave на сегодняшний день продемонстрировал значительный рост благодаря хорошему продукту, который почти полностью основан на органическом маркетинге, при этом естественным образом интегрируя людей в игровую индустрию. криптовалюты».

С Brave «привлечение клиентов становится менее беспроблемным, потому что большинство пользователей интересуются криптографией, а форматы рекламы проще в использовании. А поскольку вы получаете вознаграждение за ваше внимание, больше внимания уделяется форматам рекламы. Пользователи для рекламодателей».

«Brave — отличный пример того, как заставить людей использовать продукт в обмен на токены в обмен на просмотры рекламы».

Умный спортивный маркетинг — это спонсорство, а не комплексное стратегическое партнерство, утверждает он.

Криштиану Роналду ненавидит Coca-Cola