The concept behind sports dates back at least 3,000 years when people used to compete against each other in order to prepare for war or train for hunting. The skill of projecting a spear over a great distance to hunt land animals was accepted as a competitive source of entertainment at the first Olympic games in 776 BC. Kings and emperors sent word about such tournaments to lands afar and events like these began to attract huge crowds and traders to sell their wares. Events like these were hotbeds for some of the first marketplaces.
Over the years, sports has evolved into a multi-faceted industry that’s birthed some of the greatest sporting events like the Olympics, the FIFA World Cup, the IPL (Indian Premier League), the Super Bowl and even Wimbledon. These events have not only given athletes an opportunity to showcase their talents but have provided brands with a platform to advertise their products and reach out to a much wider audience.
Undoubtedly, a consumer is influenced by advertising and by what brand of clothing or footwear their favorite sportsperson is wearing. I know wearing Adidas football shoes is not going to make me glide past defenders and score a goal, unlike what we have seen Lionel Messi do hundreds of times. But I still buy Adidas shoes, knowing that one of the world’s greatest footballers uses shoes of the same brand. Like me, there are billions of people who watch these sporting events and are influenced by what their heroes are sporting or talking about. Enter crypto companies who have left no stone unturned in trying to milk this opportunity.
CRYPTO CASHING IN ON THE BUZZ
Ever since the crypto meltdown that started in November 2021, the crypto ad spending extravaganza has suddenly gone hush. Just last year, every major crypto exchange was advertising with some of the top sports banners around the world, including big names like Formula One and the IPL. It was reported that Indian crypto exchanges spent more than Rs 50 crore on ads during the ICC T20 World Cup in 2021.
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This was one of the biggest ever cricket tournaments to be staged and broke viewership records by roping in a television reach of 167 million users globally! Imagine running a 30-40 second ad during that window, celebrities popping up left and right on your screens with taglines like “kuch to badlega” and tempting potential investors with a Rs 1 lakh cash price if they bought Bitcoin. This was open season for potential Bitcoin buyers as there was an exchange at every nook and corner (online) selling crypto at as low as Rs 100! People were thronging these exchanges and buying crypto. Even I bought Bitcoin worth Rs 500 during that time just because of FOMO. Did advertising have a role to play in that? Maybe.
As per CREBACO, which is an independent crypto research firm, CoinSwitch Kuber spent a whopping Rs 10 crores on a deal with Disney + Hostar, a platform that streams sporting events like the English Premier League and the IPL. Coin DCX which is another Indian crypto exchange advertised seven times per game on every channel during the ICC T20 World Cup in 2021, spending around Rs 40 crore on sponsorships.
Globally, top exchanges like Binance and Crypto.com were also splurging on sports endorsements to rake in some of the traction that major sporting events and stars were getting via social media. The world’s top exchange, Binance, signed an exclusive multi-year NFT partnership with Portuguese football icon Cristiano Ronaldo estimated to be around 20 million pounds a year where Binance would be able to leverage Ronaldo’s 478 million followers on Instagram.
Not only that, Crypto.com signed a $ 700 million deal to rename the Staples Center in Los Angeles to Crypto.com Arena while FTX Trading Ltd sold a stake to NFL hall of famer Tom Brady.
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Just recently, Chelsea Football Club, which has a massive following across the globe signed a deal with crypto group WhaleFin worth 20 million pounds per year to advertise on their matchday jersey. Also, the current champions of the English Premier League, Manchester City, have partnered with crypto exchange OKX to become the club’s official training kit partner for the 2022-23 season. This deal is said to be worth more than 20 million pounds a year.
These are some of the most watched tournaments and players globally and it’s no surprise that crypto platforms and lining up in droves to advertise with them. The upcoming FIFA World Cup 2022 is one of the most-anticipated football extravaganzas and is expected to be viewed by billions of people around the world. Crypto.com is one of the official sponsors of the tournament so you can expect a lot of Crypto.com billboards and banners across stadiums throughout the tournament.
A Nielsen Sports report states that advertising with sports brands is estimated to reach $ 5 billion by 2026. Seems like a stretch considering crypto has hit new lows and there is a pervasive negative sentiment toward these digital currencies. Despite that, the ‘cryptoverse’ is hopeful.
A FRIENDSHIP FOR FUTURE
The copious amounts of crypto ads on TV and online reaped rewards for a lot of the exchanges globally and in India. Word around crypto and higher returns on investment spread like wildfire so much, that at a time in October last year, India was numero uno in terms of crypto adoption. More and more people were buying crypto from these exchanges.
Though cricketers and sportsmen stay at bay when it came to crypto endorsements, sporting events helped amplify the visibility of these crypto brands and they’re still running operations from the profits they raked in during the crypto golden period of 2020-21. The sports + crypto formula seemed to have worked wonders for brands which is why I feel this friendship is going last for a long time. However, one needs to learn to take the brickbats with the bouquets. Multiple reports have confirmed that crypto has been used for illicit activities like money laundering, funding terrorism, etc and that hasn’t done any good to crypto’s reputation.
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It has also been reported that crypto plays an active role in match-fixing, an evil that has plagued the world of sports for decades. Some of these issues are emblematic of a larger problem in crypto and if it is to play an active role in the world of sports, various stakeholders will have to come together to ensure that they weed out such issues.
AND THERE WERE OTHERS
Hang on, it’s just not crypto that’s keeping close ties with sports.
I was speaking with Ankit Wadhwa, who is the co-founder and CEO of NFT platform Rario, and he had some insightful tips to share about how NFTs would also play a pivotal role in fan engagement in sports.
“30-50 percent of the revenue of top global sports comes from fan engagement, outside of broadcast / sponsorship / marketing spends. This includes merchandise, memorabilia and other licensed products. While cricket has grown to become the 2nd largest sport in the world, in both viewership and broadcast revenue, enhanced fan engagement continues to be a big opportunity. ” – Ankit Wadhwa, Co-Founder & CEO, Rario
Engaging with fans via NFTs is a great way to increase the adoption of future technologies and Ankit also believes that platforms like Rario also open access to a world of privileges from rewarding online games, playable using NFT cards, to IRL (In-real life) experiences like meeting your favorite cricketers, watching live matches, behind the scene access to a match etc.
Similarly, sports brands are also looking to the metaverse to advertise their products which is surely going to become a norm in the coming years.
As the adoption of these future technologies increases, sporting events would look to such platforms for engagement and you can bet that brands would flock to these spaces to increase their brand visibility.
ROAD TO RECOVERY
The beleaguered crypto market is seeing its worst days which is one of the reasons you are not seeing a lot of crypto ads online or on TV. The tightly-ringed fence around crypto has left investors indecisive about whether to put money in such volatile assets to wait till the dust settles a bit.
But, if we were to believe what many crypto analysts and experts are saying; crypto will bounce back and return to its glory days.
Since ad spending is not small change, crypto exchanges globally and even Indian exchanges like CoinSwitch Kuber and CoinDCX have been forced to re-work their annual spending budget due to the current market situation.
This hush period of crypto will last till the market returns to greener pastures and the erratic volatility of crypto is under control. Not only that, the crypto industry will need more clarity on the regulation of virtual digital assets so that dithering sentiment among advertisers and investors is put to rest.
It is but certain that crypto will be an integral part of the sports ecosystem in the future. From branding on crests to renaming whole stadiums, crypto is making inroads into understanding how best they can leverage the visibility that the sports industry provides.
The prognosis of how crypto will reshape the future of technology is still uncertain. The fact that many analysts and billionaires like Warren Buffet aren’t big fans of crypto still instils doubts about whether people would want to invest in this space. However, like every other business, crypto exchanges and platforms will also lean on sporting events and athletes to endorse their brands in the future.
Crypto may be at its worst but is not pushing daisies. Not even close to it. If history has taught us anything, it’s that money has the power to persuade and if things get better, the IPLs and EPLs of today may run on crypto money tomorrow.
[Disclaimer: All of the information in this opinion piece is for educational purposes only and is not investment or financial advice. We suggest you do your own research before making any investment decisions. Cryptocurrencies are volatile and high-risk in nature. Don’t invest more than what you can afford to lose. India Today will not be liable for any loss incurred if you refer to this article for details on crypto or any other form of investment.]
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