Why will Sports Sponsorships not Save Cryptocurrency Exchanges?
Crypto firms' use of celebrities has become notorious of late but many are also starting to sponsor sports events, teams, and venues. It's not a new phenomenon for industries to rely heavily on sponsorship as a communications strategy.
If you have been watching the FIFA World Cup in Qatar closely, you will have noticed the advertising on the hoardings around the pitch. Alongside the usual names -Addidas, Coca-cola Visa . There are some new ones, including Crypto.com, the Singapore-based crypto and payment platform.
Tobacco led the way in the 1990s. then beer brands took the lead. Followed by telecommunications, airlines, and sports betting companies more recently.
But investing heavily in sports sponsorship may not be the best way for individual firms to build strength. This is especially the case as crypto companies continue to succumb to the ‘crypto-winter’.
With market values falling dramatically and firms laying off staff. It isn't just the American sports that cryptocurrency companies have been sponsoring. Crypto platform Tezos sponsors Manchester United Soccer kits .
Professional golfer Ian PoNow one of the largest sports shows on earth, the FIA Men's World Cup is getting in on the act.
Cryptocurrency brands are using the massive reach of sports to grow awareness of a relatively new industry. The cryptocurrency industry wants to educate people about these complex products, but also humanize the intimidating technology aspect.
One way to do that is to get a well-known and loved athlete, team, or area to endorse a product. But a classic example of successful sports sponsorship is when Nike sponsored Michael Jordon in his rookie season in 1984 in a deal worth US$500,000 a year, a huge amount at that time.
Cryptocurrency companies are sponsoring sports where the demographic of the events match their users. Traditionally firms would use adverts to promote their products. But in today’s market, many sports are shown on paid, online streaming services with no adverts.
A recent UK poll found that only 4% of TV viewers are very likely to pay attention to adverts. So cryptocurrency firms may get more attention by advertising on kits, hoardings, or stadiums.
Cryptocurrency users tend to be young and male, but also well-educated and well-off. Returns from sports deals are difficult to measure, plus industry figures argue that cryptocurrency firms need to be strategic when it comes to investing in other firms. But also in the type of sponsorship, they go for.
Slapping a logo on anything may not be a great strategy, but integrating the industry into the sporting world could boost recognition among its core market and lead to long-term success.
To encourage more transparency in this area, Binance has since released its proof of reserves system. which details its assets. There is a danger in cryptocurrency firms over-exerting themselves in terms of sponsorships at the expense of shoring up their businesses.
Considering current crypto events it seems to be right.
