Long Crypto Wait: Cooling Sports Sponsorship and Advertising Deals
The cryptocurrency industry has seen a surge in sports sponsorships and advertisements in recent years, as digital assets gain mainstream recognition. Crypto companies have sponsored events and teams across various genres, including football clubs, basketball and car racing.
This has enabled the National Basketball Association (NBA) to rake in $1.64 billion in annual sponsorship fees for the 2021–2022 season, marking a YoY rise of 12.50%. Crypto–based payments and sponsorships have become commonplace in the sports world. For example, the NBA’s Dallas Mavericks announced that they would accept Dogecoin as payment for tickets and merchandise.
Similarly, the English Premier League football club Southampton signed a sponsorship deal with the cryptocurrency betting platform Sportsbet.io, and the Formula 1 racing team Red Bull Racing partnered with the cryptocurrency company FuturoCoin.
Crypto companies have also invested heavily in advertising through sports media.
During the 2022 Super Bowl, the crypto exchange platform FTX ran a commercial featuring NFL stars Tom Brady and Patrick Mahomes. Through Oct. 2022, crypto–related brands spent $223 million on ads in the U.S., up 150% from $89 million for all of 2021, according to MediaRadar. However, the crypto winter of 2022 has caused many of these sponsorships and advertisements to be scaled back.
Grant Harbin, CEO of performance marketing firm Headlight, said: “Crypto winter is a crypto advertising winter. There’s probably very little consideration on scaling advertising budgets right now.”
In the third quarter of last year, the top crypto advertisers spent just $35 million on ads, according to MediaRadar. The crypto winter has also seen some major sponsorships and partnerships end. Mercedes was the first to remove FTX’s sponsorship, as the company may have a claim in FTX’s bankruptcy process. Ferrari also parted ways from a multi–year partnership with Velas Blockchain, and the Red Bull racing team ended its relationship with Tezos.
The cost of sponsorships varies from team to team, but can range from $500k to $750K for smaller companies, and millions for more giant corporations. Some countries have even banned crypto ads altogether. Despite the downturn, the sports industry remains an essential target for crypto companies as they seek to reach new audiences and promote their products.
With the cost of living rising due to inflation, however, crypto firms will have to be mindful of their spending in the current market. Th crypto winter of 2022 into 2023 has caused many crypto sponsorships and advertisements to be scaled back, with some major partnerships even ending entirely. This has been a result of the severe market downturn, which has caused many crypto firms to be mindful of their spending in the current market.
Despite this, the sports industry remains an essential target for crypto companies, as they seek to reach new audiences and promote their products. Although the crypto winter has had a negative impact on the industry, it is clear that crypto companies are still investing heavily in sports sponsorships and advertisement deals.