The Consumer Isn’t A Moron
NEW YORK, NEW YORK – MAY 12: People walk past CryptoPunk digital art non-fungible token (NFT) … [+]
We have come a long way from the days of Satoshi Nakamoto’s whitepaper in 2008. Through the years crypto was rarely more than a footnote in social discourse. There were a few bubbles making their way up into popular perception: the dark web, Silk Road, and other nefarious activities at first, and later people started noticing the price, but not much else.
Now, people don’t need mainstream media, financial pundits, or governments to tell them what crypto is about. The sector has grown so much that leading companies in the space are launching one mass-impact ad after another. It started with FTX, but is now being continued by the likes of Gemini and, recently, by Crypto.com styling with a Matt Damon ad.
How did we arrive here?
Long-time crypto observers and fans are not surprised by this attention. This was the crypto dream after all — to have everyone join this new “parallel financial system” created for the people to take greater independent control from a heritage financial system that catastrophically failed many in the Great Financial Crisis of 2008.
Still, diving deep into bitcoin, other coins, and the booming DeFi markets require a fundamental understanding of the nature of asset markets, money and its fiat incarnation, Austrian economics, and much more, all mixed with a healthy dose of new and emerging digital infrastructure and tools.
It’s easy to see how this is not the best recipe for mainstream appeal and adoption – there are often many barriers and friction points for consumers just to buy cryptocurrency, let alone participate in the DeFi ecosystem.
Now, the development of NFTs has created a whole new market for digital art which, coupled with the growing phenomenon of play-to-earn blockchain games, and the retail digital coupon market allows crypto to just casually stroll into popular perception. GTF Exchange is a network that delivers NFTs to your mobile phone without the need to have or understand crypto, wallets or the blockchain, a space poised to take off with consumers.
Facebook’s rebrand into Meta, inspired by the NFT-native idea of the Metaverse, is possible one more clue of an upcoming revolution.
Yet, the monetary principles of bitcoin, the immutability of smart contracts on Ethereum all have value. More than anything else, crypto needed an appealing hook or “anchor” to generate curiosity in people who never really cared about crypto. In addition, crypto is only a fraction of the traditional worldwide financial system, a system that is slower, and can often be more cumbersome and expensive for users.
All this makes it likely that the next era of financial services growth will be dominated by crypto and digital assets as the Web 3.0 is architected and built into real time across networks. A key driver to that growth and adoption is to capture the minds of the people with a compelling proposition through what claims to be a superior offering by many measures. Crypto has turned to putting the A into Advertising.
“The push for mass adoption is exciting because of the promise of crypto – financial inclusion, transparency, efficiency. Yet, the broader industry still has work to do on consumer education and market integrity – ensuring that investors don’t need to be technical experts to avoid being victims of fraud schemes and market manipulation,” says Kathy Kraninger, a former US Consumer Financial Protection Bureau director who recently joined the leadership team of crypto risk monitoring firm Solidus Labs.
Confessions of the Crypto Advertising Industry
Probably one of the most striking examples of such campaigns comes from Crypto.com, the multi-functional crypto exchange and debit card provider. The company just announced a $100 million advertising campaign that will run for several months in more than 20 countries, with the intent of reaching new crypto users.
The campaign is being launched with the collaboration of award-winning stars Matt Demon and Wally Pfister.
The new Crypto.com commercial is entitled “Fortune Favors the Brave” and it is performed by Matt Damon, who has never been seen starring for private company commercials in the past. Crypto.com has also donated $1 million to Water.org, the clean-water non-profit initiative co-founded by Matt Damon and Gary White in 2009.
“As our financial solutions and platforms evolve, we can use them for good,” Damon said. “Crypto.com and Water.org are both working toward positive transformation, and our innovative, financial solutions will help change lives and the world.”
The objective behind Crypto.com campaign is not to target any particular niche — for example GameStop aficionados — but to invite everyone into the revolution.
“Crypto will be as ubiquitous as the internet soon,” says Steven Kalifowitz, CMO of Crypto.com, “As such, this ad is for everyone, and if you watch it closely, you’ll see that it will appeal to people who know nothing about crypto, as well as the people who’ve been in the industry since day one.”
Crypto.com is just the latest in a string of crypto marketers. One of these has been the display of mysterious and minimal billboards around Columbus Circle in Manhattan. The posters show single words and sentences like “electronic,” “a solution” and “are lost” with little explanation.
The crypto exchange Gemini has taken ownership of an advertising campaign in the center of Manhattan to celebrate Satoshi Nakamoto whitepaper’s 13th anniversary.
Gemini hasn’t disclosed how much it paid for the ad spaces, one of which had previously been occupied by CNN’s logo. The proceeds from the NFT billboard sales will be donated to the Human Rights Foundation’s (HRF) Bitcoin Development Fund. The HRF focuses on improving the privacy, usability, and resilience of the bitcoin network. Earlier this year, Gemini launched the Gemini Opportunity Fund focused on making Bitcoin more scalable, secure, and sustainable through grants, fellowships, and donations.
Another crypto exchange executing on new marketing and advertising strategies is FTX. FTX is exploring a new way of promoting its products through sport advertising. The crypto company has recently invested $20 million in a campaign for a spot in the 2022 US SuperBowl. The stars of the FTX commercial, entitled “FTX, You in?”, will be Tom Brady and Gisele Bundchen.
In addition to commercials, FTX declared that National Basketball Association player Steph Curry is going to receive an FTX equity stake and serve as brand ambassador. Earlier, FTX had sponsored the popular League of Legends team TSM, which now is usually referred to as FTX. A similar thing happened for what used to be the American Airlines Arena in Miami, which is now simply FTX Arena.
“Many of these ads are designed to create FOMO, and rightly so, the crypto space is a very dynamic place with ample opportunity. However, it’s important to remember that FOMO often contributes to fraud, since it pushes consumers and investors to make decisions quickly .
“Like any other investment opportunity, consumers should execute due diligence and make thoughtful decisions on how and when to engage with crypto markets. As one example – they should ask does the platform take risk monitoring and compliance seriously?,” adds Kraninger.
Timing is everything
After so many years of exploring blockchain technology and many a crypto billionaire made, why is crypto mainstream advertising peaking only now?
It is likely that today’s social and market conditions never existed in the past. As the world comes to terms with beating a global pandemic, the economic and social impact are becoming apparent – governments cannot endlessly print money and fix all of society’s problems and this evident in the government debt market.
The impact of the Great Global Financial Crisis of 2008 and the subsequent banking scandals related to financial crime and market manipulation have left a scar on the traditional financial sector, itself often wrestling to clean up its global practices.
As the crypto market kept on developing through the years, its public understanding of crypto and the financial market has grown as well.
Telling young retail investors, they may lose all of their money in crypto on the back of the ten year performance of bitcoin, is almost futile – many point out that bank stocks went to a dollar in the 2008 crisis, big UK banks failed, and that Lehman Brothers went to zero, and is literally history – the subsequent unintended consequences of which still make investors and bankers alike queasy.
We also live in a period of decisively heightened public interest in (retail) trading, what with all the “GameStops and Shibas”.
Elon Musk’s endorsement of crypto, the launch of Bitcoin exchange-traded funds (ETFs), and Wall Street’s interest in crypto, have all generated interest in cryptocurrencies. The ETF launch, in particular, is a great opportunity for retail customers in the US to participate in the crypto world and discover its potential without worrying about security risks.
Could this be the peak of crypto’s prevalence in mainstream society? Perhaps, but it’s also true that mass adoption is initially indistinguishable from a short-lived bubble.
We are seeing a more permanent focus being given to crypto in society than the temporary attention during the 2017 peaks, a zeitgeist shift, not just a bubble. As the Roaring 20s are setting up to be the digital decade for financial services and Web3.0, it is likely advertising will prevail and be a principal driver of education, awareness, and consumption for crypto.
As we move forward on this digital journey let’s bear in mind the words of the great Madison Avenue advertising man David Ogilvie, “The consumer isn’t a moron.”
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