Last year’s pandemic emerged as a boon for the crypto market, as Bitcoin reached its all-time high of $69,000 in November 2021. Crypto exchanges didn’t leave any stone unturned in blowing their trumpets and spent a considerable amount propagating their new asset narrative by roping in actors like Ranveer Singh and Ayushmann Khurrana to cricketer Dinesh Kartik for endorsements.
Crypto exchanges ad spending plunged
The current market situation has left Indian crypto exchanges scraping the barrel as crypto is seeing its worst phase in a long time. For instance, the India-based exchange, WazirX, one of the largest crypto exchanges, had its trading volume fall by over 70 percent during the crypto market crash. The exchange told India Today, that compared to the entire ad spending of 2021, spending in 2022 (Jan till July) has fallen by 88 percent.
“If we compare what we spent this year till date (Jan – July 2022) from the same period last year (Jan – July 2021), then there is an 88 percent fall in spending. Do note, spending was reduced in the 2nd half of last year and has been further cut back since Q1 2022.”
– WazirX in a statement to India Today
However, Giottus , another crypto exchange, said they spent around Rs 2 crores in that time period (most of it in 2021).
Exchanges were splurging on ads before.
Notably, some other major crypto exchanges such as CoinswitchKuber, CoinDCX, ZebPay, and Bitbns declined to share their ad spending data with us. Moreover, ZebPay said,” We try to keep details on internal budget allocations confidential as this is a highly competitive space. Happy to share details on the channels we have used to engage with our audience but would prefer not to specify the quantum of our spending.”
Interestingly, CREBACO, a cryptocurrency data research firm, told India Today that CoinswitchKuber spent more than 10 crores, an estimation, on a deal with Disney+Hotstar in 2021.
In addition, CoinDCX, another crypto exchange, spent an estimated Rs 40 crore on ads on Star Sports. Also, CoinDCX was one of the key sponsors of the Viacom18-owned Voot reality show, Bigg Boss. “The size of the deal is estimated to be in the range of Rs 8-10 crore,” said CREBACO.
The research firm has also noted that the sector is expected to have an ad spend ranging between Rs 150-180 crore in the ongoing financial year. CoinSwitch Kuber is the top brand on digital with a 49 percent share of ad insertions, followed by CoinDCX with a 22 percent share. Meanwhile, WazirX and ZebPay accounted for a 10 percent share of ad insertions each.
Blind spending can lead to violations
Meanwhile, globally, ad spending on TV has also been down: Crypto.com’s marketing costs decreased to $2.1 million in May 2022, from $15 million in November of last year, while Gemini’s marketing campaign was cut back to $478,000.
In June 2022, an ASCI report stated that over 400 crypto-related advertisements disobeyed advertising and promotion guidelines for virtual digital assets (VDAs) and guidelines for influencer advertising in the first five months of this year.
“Some influencers talk so confidently about crypto without fully understanding it. It does create an impression that it is safe, it’s fine and a cool thing,” says Manisha Kapoor, CEO of ASCI.
419 of the 453 complaints ASCI handled between January and May 2022 needed revisions, most of which were against influencers.
Why has ad spending on crypto dropped?
So here’s a question that arises; why crypto exchanges are now unable to spend more money on advertisements? “The primary source of earning for a crypto exchange is the commission it charges on transactions. Indian crypto exchanges are reeling under plummeting transaction volumes owing to the double whammy of lower digital asset prices on the one hand, and TDS-related trading volume reduction on the other. And when revenues fall by 90 percent, it follows that expenses have to be drastically cut too,” says Ajeet Khurana, Founder of Reflexical.
However, the CEO of Giottus Crypto Platform said that as “macro-economic conditions continue to present challenges globally and with the onset of 1 percent TDS, crypto exchanges have seen a considerable drop in transactional volumes over the last 3 months – we are not witnessing good traction among new users as well.”
Considering the vertiginous drop in transactional volume subsequently leading to lower profits, it’s no surprise that these exchanges have had to rework their ad spending strategies and execute more budget-conscious decisions.
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