The fall of the crypto markets is doing much more damage than we thought. In addition to being a blow for individuals, it is downright a disaster for crypto companies. Very affected by the current state of the markets, the latter are forced to reduce their advertising expenditure. But not a little!
Large firms are reducing their marketing spend by almost 100%
The financial crisis of cryptocurrencies affects many investors. From individuals to businesses, everyone is affected in their own way. While some remain calm and patiently await recovery, others are forced to face the situation and make decisions that meet the present need. Although some governments say they are sticking to their guns despite heavy losses, businesses face challenges that seem insurmountable.
Firms must make a profit to stay afloat. As a result, the current price of the financial market is harmful for most of them. Since the expansion of crypto assets, many crypto businesses have sprung up. And to make themselves known, they need publicity to make their services known to the general public. Thus, some of them have invested heavily in marketing. In this case Gemini and Crypto.com.
The second half of 2021 was a favorable time for crypto adoption. With green indicators and convincing prices, the need to invest in these assets has come to light. With bitcoin’s all-time high in November, more and more companies have increased their advertising budgets. What purpose ? That of bringing crypto assets into the mainstream.
To do this, they have spent millions to achieve their goals. Since the markets collapsed, they have cut their advertising budget by around 90%. Thus, the advertising budget costs at Crypto.com have increased from $15 million in November to $2.1 million in May 2022. Moreover, they have increased significantly in the run-up to the Super Bowl, estimating themselves at $40 million. At Gemini, spending fell to $478,000 in May from $3.8 million in November.
The fall of the crypto markets is pushing companies operating in the sector to review their marketing strategy. While in November 2021 many platforms were doing everything they could to make themselves known to the general public, the current state of the markets is pushing them to reduce their spending. For Singapore-based crypto businesses, the current correction is forcing them to reduce their expenses not by 40% or 50%, but by 90%!
However, they are not the only ones facing bearish prices. Coinbase (NASDAQ: COIN) finds itself in the obligation to suspend its advertising expenditure. After spending nearly $31 million in February on marketing and advertising, the company is now forced to lay off some employees and freeze hiring to stay afloat.
Meanwhile, other platforms like FTX are increasing their ad spend. Indeed, the cryptocurrency exchange’s budget went from $3 million in November to $5.2 million in May. Additionally, she has enlisted the services of former basketball star Shaquille O’Neal as an ambassador. In this context, the competition becomes fierce and staying the course becomes a necessity.
The current course of the crypto markets affects many crypto businesses. Even if the forecasts of some experts are optimistic about the future of cryptocurrencies, the fact remains that currently, the platforms are in crisis. Reducing ad spend is an option for many of them. However, the competition is fierce and standing out in the market is difficult. Some exchanges are instead increasing their spending despite the crypto crisis, making things more complicated.
Source : finbold
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Crypto: Ad spend reduced by 90% after bitcoin (BTC) ATH
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