Crypto, Super Bowl LVII and Why This Year Won’t Be Another ‘Crypto Bowl’

A Crypto.com commercial during last year’s Super Bowl featured LeBron James and a 2003 version of himself sitting down for a heart-to-heart, with the younger James asking the older: Is the hype too much? am i ready To which the elder replies: I can’t tell you everything, but if you want to make history, you have to try yourself.

The ad, along with those from FTX (Larry David as a costumed pitch man), Coinbase (floating QR code) and eToro, marked notable investments by cryptocurrency companies looking to go mainstream and join the big, traditional Super Bowl ad categories , leading some industry watchers to refer to last year’s game as the “Crypto Bowl.”

The crypto ads were hot. This year not so much.

Since the launch of Bitcoin in 2009, the industry has created thousands of different cryptocurrencies that can be bought and traded on exchanges such as Crypto.com and Coinbase. They are usually high risk and high reward. In November 2021, the cryptocurrency market peaked and was briefly valued at more than $3 trillion, ushering in what would become the golden age of crypto in early 2022.

Companies latched onto sports as a way to reach mainstream consumers, buying naming rights to sports arenas, signing sponsorship deals with leagues and celebrities and star athletes like Aaron Rodgers, Joel Embiid, Naomi Osaka and Tom Brady—spending upwards of $6.5 million for a 30-second ad seeking to reach more than 100 million Super Bowl viewers.

But in the past year, crypto has crashed, with some companies mired in bankruptcies, lawsuits or investigations, with critics saying some celebrity boosters were leading investors without highlighting potential risks. As a result, the commercials set for Super Bowl LVII between the Philadelphia Eagles and Kansas City Chiefs, broadcast by Fox on Sunday, will not be memorable for crypto. Here are some key questions and answers about crypto and its role in Super Bowl LVII’s commercials.

Why was Super Bowl LVI called the ‘Crypto Bowl’?

Crypto wanted a spot in the Super Bowl because the game remains one of the only things in segmented American media consumption that both brings in monster ratings and forces people to watch commercials. Last year’s Super Bowl, which averaged more than 112 million viewers across all platforms on NBC, was the most-watched telecast since the Super Bowl five years earlier.

iSpot, a company that tests national ads for audience approval, provided ESPN with data related to monthly estimated ad costs for ads on national television. In February 2021, when the Tampa Bay Buccaneers beat the Chiefs 31-9 in Super Bowl LV, the aforementioned crypto companies did not spend a dime. In January 2022, Crypto.com spent $36.5 million; FTX ($36.7 million); and Coinbase ($31.6 million) followed in February. eToro also hit a personal high of $7.2 million in the same month.

With this exposure – and the cost of acquiring it – came name recognition for the companies, especially when combined with star power.

“Imagine that person in their late 30s who doesn’t work in tech, doesn’t live in a big city and has heard a lot about crypto… and then they see a Crypto.com ad or an FTX ad… [and they’ll say]”I heard about it,” said Andrew Chang, who spent nearly a decade as CEO of crypto infrastructure company Paxos.

“So once they’re interested, they’re going to sign up for one of those.”

Fox declined to talk about pricing for specific ads, but a source with knowledge of the ad lineup said the highest-priced spots for Super Bowl LVII will eclipse $7 million for 30 seconds. Since 2000, the average cost of a Super Bowl ad slot has increased by 250%. Fox officially sold all of its ad space in the last week of January, the source said.

“It’s a big, big business,” said Larry Mann, a partner at rEvolution, a global sports marketing and media agency. “And it’s expensive. It’s everything that goes into it beyond just the location. It’s the social campaign. All of these brands have a whole campaign that probably started two, three weeks ago that will run through the month of February.

“You want to do the Super Bowl right. I mean, to do it right, you have to spend $20 million.”

Just a year ago, the crypto companies had the money. On Christmas 2021, less than two months before the Crypto Bowl, the Staples Center in Los Angeles was officially renamed the Crypto.com Arena. The company is said to have paid 700 million dollars for the rights. A month later, FTX was valued at $32 billion.

“[Crypto Bowl spending] was ego money,” said Peter Daboll, iSpot’s head of strategy and insights, “but it was in line with other ego money.”

What has happened to crypto since the Crypto Bowl?

Court cases. Bankruptcy. A lot.

While crypto companies basked in the afterglow of stadium naming rights, superstar endorsements and a frenzy of new customers in early 2022, the rest of the year saw a sharp downturn in falling prices and liquidity crises.

The public face of this collapse was FTX, one of the largest crypto exchanges, and its founder, Sam Bankman-Fried. The Bahamas-based crypto company filed for bankruptcy in November, with Bankman-Fried indicted by federal prosecutors on eight counts, including fraud and money laundering. His trial is scheduled for October 2.

In his own words: “I f—-d up…”

The celebrity supporters of FTX’s ad campaigns were not spared either, as customers filed class action lawsuits.

“Never in my lifetime, and I’ve been around sports sponsors for over 40 years, have I ever seen a situation where consumers and fans have gone after a sponsor for something like that,” said Jim Kahler, a former Cleveland Cavaliers executive.

Court proceedings in the cases are ongoing.

What can we expect during the Super Bowl this year?

No crypto – none at all.

Mark Evans, executive vice president of ad sales at Fox Sports, told The Associated Press that four crypto advertisers would run in Super Bowl LVII. Two of them were “booked and done” and two others were “on the one-yard line,” he told the AP, but FTX’s controversy prevented the deals from being completed. Mann, whose company works on behalf of brands, said crypto is a non-starter.

“I basically said, ‘Look, if you’re selling the crypto category, you’re a goddamn superman of sellers,'” he said.

ESPN reached out to the solvent crypto companies that advertised in last year’s Super Bowl. A Coinbase spokesperson said: “While we are incredibly proud of our first national ad, which debuted at last year’s Super Bowl – we will not be appearing at this year’s game.” And eToro sent an email: “eToro had no plans to advertise in this year’s Super Bowl. We have always been dynamic in our marketing approach. We are multi-channel with a strong focus on online. We dial up or down specific channels based on many factors including market conditions.” Crypto.com did not immediately respond.

Representatives for James and Brady, perhaps crypto’s two most prominent athletes, did not immediately respond to requests for comment.

In the absence of crypto abundance during this year’s Super Bowl, the ad lineup is predicted to be a return to traditional brands. Beer giant Anheuser-Busch ended its 33-year-old exclusivity deal with the event, unleashing other brewers such as Molson Coors and Heineken on the big stage. Other well-known names in Sunday’s advertising space will be the likes of Pringles, Doritos and Hellmann’s mayonnaise.

“There will be fewer proclamations about the next big, industry-shattering thing,” said Atit Shah, creative director, North America, at ad agency Digitas in an email, “… a little more leaning back to the classics. “

OK, but what about next year?

To be firm.

While FTX is bankrupt, the ripple effects of the 2022 “crypto winter” and the general economic downturn have also been felt on the other major exchanges. Many crypto companies have since seen layoffs and a significant drop in spending. But crypto has always been a market where “the prices of things have gone up and down repeatedly,” said Kevin Werbach, a professor at The Wharton School at the University of Pennsylvania.

“My guess is [if] we’re having this conversation that 10 years from now, there will be two or three key players in the crypto category, and the others will fade into the sunset,” said Kahler, who is director of the sports and entertainment management program at Cleveland State University.

Daboll said crypto could come back with a more targeted strategy.

“[They could target] financial investors or the investment community [rather than] going wide on something like the Super Bowl,” he said. Daboll also pointed out that Coinbase already rolled out an ad campaign in December, which he said was “universally hated.”

“It wasn’t because people hated crypto,” he said. “That’s because the ad was so terrible.”

iSpot shared likeability ratings and verbatim responses to Super Bowl scramble ads with ESPN. Coinbase’s QR code spot ranked 57% lower than financial ad norms the previous year. One viewer said: “Terrible ad. I’m not going to work to find out what company or product it was for,” while another called the whole thing “terrible.” FTX’s likeability rating for the Super Bowl spot, which aired before the crash, was 5% higher than normal. “Larry David. That’s enough!” one answer read.

“Sometimes it’s just better to stop talking and let the industry sort itself out, calm down, the market stabilize,” Daboll said when asked if anyone will ever like crypto ads in the Super Bowl again, “and then come back when you have has a better story to tell.”