Sergino Dest of USA and Milad Mohammadi of Iran battle for the ball during the FIFA World Cup Qatar 2022 Group B match between IR Iran and USA at Al Thumama Stadium on November 29, 2022 in Doha, Qatar.
Crypto companies were spending anywhere and everywhere.
Through October of 2022, crypto-related brands shelled out $223 million on ads in the U.S., up 150% from $89 million for all of last year, according to MediaRadar. Few were as aggressive as Crypto.com, which said in late 2021 it was committing $100 million to an ad campaign that would feature Matt Damon and run across 20 countries. The company is an official sponsor of the 2022 World Cup taking place in Qatar.
What the crypto industry giveth, it can taketh away.
The stunning collapse this month of cryptocurrency exchange FTX and founder Sam Bankman-Fried’s broader empire spells further trouble for ad-supported media businesses that had come to see crypto as a new growth engine with money to burn. And FTX is far from the only problem, as the contagion has been spreading for months.
Coinbase has lost over 80% of its value and the company cut 18% of its staff in June, when CEO Brian Armstrong admitted the business grew too quickly and stressed “the need to manage expenses.” Crypto.com has reportedly cut 40% of its workforce, eToro downsized by 10% and in July canceled a planned merger with a special purpose acquisition company, and BlockFi just declared bankruptcy.
“Crypto winter is a crypto advertising winter,” said Grant Harbin, CEO of performance marketing firm Headlight, which has worked with companies in the industry. “There’s probably very little consideration on scaling advertising budgets right now.”
In the third quarter of this year, the top crypto advertisers spent just $35 million on ads, according to MediaRadar, an 80% drop from the first quarter, which got a huge boost from the country’s single biggest sporting event — the Super Bowl.
The pullback in spending, which is expected to intensify given the industry’s deepening turmoil, is notable as ad-based companies face broader challenges from soaring inflation and fears of a recession. But while crypto represented a promising area for growth, it still makes up a tiny portion of the overall ad market.
Companies overall are expected to spend almost $89 billion on TV ads this year, across linear programming and connected devices, and close to $250 billion on digital ads, according to Insider Intelligence.
Facebook (including Instagram), Snap, Twitter and TikTok combined are expected to pull in $57.1 million in ads from crypto exchanges this year, according to SensorTower. That’s about even with 2021 figures, though almost all of the spending last year was on Facebook and Instagram.
In Alphabet‘s third-quarter earnings call last month, the company blamed a slowdown in revenue growth in part on reduced ad spending by cypto companies and other financial firms. Google’s sales growth was the slowest for any period since 2013, other than one quarter during the Covid pandemic.
The spending roller coaster
SensorTower data shows a big spike in crypto ad spending on digital media around October and November of last year, as prices were peaking, and a steep drop after the first quarter of this year. In April, the crypto sell-off began in earnest, with bitcoin and ether each losing well over half their value over the next three months.
The Super Bowl created a spending splurge that the industry may never see again. A 30-second spot during the NFL’s grand finale in February cost an average of $6.5 million, and crypto was a huge theme.
Coinbase, Crypto.com, eToro and FTX spent a combined $54 million on Super Bowl ads, according to MediaRadar. Coinbase aired a 60-second commercial showing a bouncing QR code that, once scanned, led to a promotion offering $15 worth of free bitcoin to new users. FTX signed up Larry David for an ad, urging viewers not to miss out on crypto and declaring NFTs “the next big thing.” A version of “Fly Me to the Moon” played during eToro’s commercial.
Promotional costs weren’t limited to airtime.
In 2021, Crypto.com paid $700 million to put its name on the home of the Los Angeles Lakers for the next 20 years. FTX signed a 19-year deal worth $135 million with the NBA’s Miami Heat for naming rights to the team’s arena, partnered with the NBA’s Golden State Warriors and had its logo placed on uniforms worn by Major League Baseball umpires.
Miami-Dade County is now trying to get the FTX named scrubbed from the arena. Miami has become a major hub for the crypto industry, and in September FTX moved its U.S. headquarters there from Chicago. The company spread its wings in the city, sponsoring a three-day crypto weekend in May on South Beach called “FTX Off the Grid.”
Jordan Levy, a Miami-based venture capitalist, said that while other crypto companies have advertised in the city, FTX was on another level.
“None of them have as significant of a presence in Miami as Bankman-Fried and FTX,” said the managing partner of SBNY, formerly SoftBank New York. “They’ve tried to do some guerrilla marketing stuff that put them on the top of the food chain from perception perspective.”
The money FTX was spending now presumably goes to zero. According to SensorTower, the company’s online ad spending quadrupled this year to $13.3 million, with roughly half of that coming in the first quarter.
Crypto.com’s online ad spending plummeted from about $16.2 million in the first quarter to $1.6 million in the third, SensorTower said. And Gemini, the exchange owned by the Winklevoss twins, cut spending from $8.5 million the first quarter to $2,500 in the third.
Coinbase, the only major exchange that’s publicly traded in the U.S., said in its earnings report this month that its sales and marketing expense dropped 46% in the third quarter from the prior period to $76 million. The company attributed the decline to “our decision to reduce performance marketing, due to lower efficiency in this spend associated with softer crypto market conditions as well as savings associated with our headcount reduction.”
Coinbase didn’t respond to a request for comment.
A Crypto.com spokesperson said via email that the company’s $100 million campaign ran from October 2021 through February 2022. Since then, “we ran additional advertising as part of our marketing strategy, and we continue to focus on our global brand and sports partnerships,” the spokesperson said. That includes sponsorship of the World Cup.
Brad Michelson, eToro’s U.S. head of marketing, said the Israel-based investment platform will “actively adjust spend based on performance,” and plans to continue building its brand in the U.S.
“It’s no secret that the markets are in a pull-back phase, and our budgets are being reallocated accordingly,” Michelson told CNBC in a statement.
The crypto market has suffered downturns in the past, only to bounce back and attract even greater sums of cash and new entrants.
Joseph Panzarella, director of digital media and marketing at the Yeshiva University’s Katz School of Science and Health, said that even if the market starts recovering, the high-profile scandals of 2022 will force companies to take a more serious approach when promoting their offerings.
“What they came out with was like, ‘Hey, we’re going to stick it to the Fed,'” Panzarella said, referring to the industry’s focus on decentralization and its ability to function without the heavy hand of government. “I guess they have to eat a little crow and say something like, ‘Hey, we are now we’re now [open to] being regulated.'”
Altimeter Capital CEO Brad Gerstner said Thursday that he’s moving out of the “bomb shelter” with Nvidia and into a position of safety, expecting that the chipmaker is positioned to withstand President Donald Trump’s widespread tariffs.
“The growth and the demand for GPUs is off the charts,” he told CNBC’s “Fast Money Halftime Report,” referring to Nvidia’s graphics processing units that are powering the artificial intelligence boom. He said investors just need to listen to commentary from OpenAI, Google and Elon Musk.
President Trump announced an expansive and aggressive “reciprocal tariff” policy in a ceremony at the White House on Wednesday. The plan established a 10% baseline tariff, though many countries like China, Vietnam and Taiwan are subject to steeper rates. The announcement sent stocks tumbling on Thursday, with the tech-heavy Nasdaq down more than 5%, headed for its worst day since 2022.
The big reason Nvidia may be better positioned to withstand Trump’s tariff hikes is because semiconductors are on the list of exceptions, which Gerstner called a “wise exception” due to the importance of AI.
Nvidia’s business has exploded since the release of OpenAI’s ChatGPT in 2022, and annual revenue has more than doubled in each of the past two fiscal years. After a massive rally, Nvidia’s stock price has dropped by more than 20% this year and was down almost 7% on Thursday.
Gerstner is concerned about the potential of a recession due to the tariffs, but is relatively bullish on Nvidia, and said the “negative impact from tariffs will be much less than in other areas.”
He said it’s key for the U.S. to stay competitive in AI. And while the company’s chips are designed domestically, they’re manufactured in Taiwan “because they can’t be fabricated in the U.S.” Higher tariffs would punish companies like Meta and Microsoft, he said.
“We’re in a global race in AI,” Gerstner said. “We can’t hamper our ability to win that race.”
YouTube on Thursday announced new video creation tools for Shorts, its short-form video feed that competes against TikTok.
The features come at a time when TikTok, which is owned by Chinese company ByteDance, is at risk of an effective ban in the U.S. if it’s not sold to an American owner by April 5.
Among the new tools is an updated video editor that allows creators to make precise adjustments and edits, a feature that automatically syncs video cuts to the beat of a song and AI stickers.
The creator tools will become available later this spring, said YouTube, which is owned by Google.
Along with the new features, YouTube last week said it was changing the way view counts are tabulated on Shorts. Under the new guidelines, Shorts views will count the number of times the video is played or replayed with no minimum watch time requirement.
Previously, views were only counted if a video was played for a certain number of seconds. This new tabulation method is similar to how views are counted on TikTok and Meta’s Reels, and will likely inflate view counts.
“We got this feedback from creators that this is what they wanted. It’s a way for them to better understand when their Shorts have been seen,” YouTube Chief Product Officer Johanna Voolich said in a YouTube video. “It’s useful for creators who post across multiple platforms.”
CEO of Meta and Facebook Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, Google CEO Sundar Pichai, and Tesla and SpaceX CEO Elon Musk attend the inauguration ceremony before Donald Trump is sworn in as the 47th U.S. president in the U.S. Capitol Rotunda in Washington, Jan. 20, 2025.
Saul Loeb | Via Reuters
Technology stocks plummeted Thursday after President Donald Trump’s new tariff policies sparked widespread market panic.
Apple led the declines among the so-called “Magnificent Seven” group, dropping nearly 9%. The iPhone maker makes its devices in China and other Asian countries. The stock is on pace for its steepest drop since 2020.
Other megacaps also felt the pressure. Meta Platforms and Amazon fell more than 7% each, while Nvidia and Tesla slumped more than 5%. Nvidia builds its new chips in Taiwan and relies on Mexico for assembling its artificial intelligence systems. Microsoft and Alphabet both fell about 2%.
The drop in technology stocks came amid a broader market selloff spurred by fears of a global trade war after Trump unveiled a blanket 10% tariff on all imported goods and a range of higher duties targeting specific countries after the bell Wednesday. He said the new tariffs would be a “declaration of economic independence” for the U.S.
Companies and countries worldwide have already begun responding to the wide-sweeping policy, which included a 34% tariff on China stacked on a previous 20% tax, a 46% duty on Vietnam and a 20% levy on imports from the European Union.
China’s Ministry of Commerce urged the U.S. to “immediately cancel” the unilateral tariff measures and said it would take “resolute counter-measures.”
The tariffs come on the heels of a rough quarter for the tech-heavy Nasdaq and the worst period for the index since 2022. Stocks across the board have come under pressure over concerns of a weakening U.S. economy. The Nasdaq Composite dropped nearly 5% on Thursday, bringing its year-to-date loss to 13%.
Trump applauded some megacap technology companies for investing money into the U.S. during his speech, calling attention to Apple’s plan to spend $500 billion over the next four years.