Why Web3 companies are buying the media
Future News 127
There are two philosophies currently dominating how Web3 companies boost their brand awareness. The more tried, tested and traditional route is via major sports marketing.
This approach has been fully embraced by cryptocurrency exchange Crypto.com, a challenger of Binance and Coinbase. The business has signed advertising deals with the Formula 1, UFC and will be backing the biggest sporting event this year, the 2022 FIFA World Cup hosted in Qatar this November.
That sort of mega exposure (an average live audience was around 517m for the last World Cup) doesn’t come cheap, but CEO Crypto.com Kris Marszalek takes a long-term view on the brand awareness strategy, an approach which has also seen the exchange dish out a cool $700m to sponsor LA’s Staples Center or the ‘Crypto.com Arena’ as it’s now known.
“The business has been profitable and it has been for a number of quarters so we thought it was a great time to elevate our brand presence and increase the visibility on a global level,” Marszalek told CoinDesk, explaining that many of the deals would run for five, ten and even 20 years. The CEO also claimed the $700m was “value for money” once you took into account the mass international media coverage Crypto.com received following the partnership with the LA Arena Company.
Smart contract network Algorand is one of the few Layer 1 blockchains (Bitcoin and Ethereum are other examples of Layer 1s) deploying a similar strategy. Like Crypto.com, it has partnered with FIFA for the World Cup, sponsoring the North American and European regions, and it has backed the Drone Racing League with $100m.
Unfortunately for some Web3 companies, parts of one of the world’s most popular sports, cricket, is out of bounds after teams in the Indian Premier League were barred from signing sponsorships with cryptocurrency exchanges.
The English Premier League, meanwhile, could be a top target for Web3 businesses, as could UEFA’s Champions League or clubs which play in both – Liverpool, Manchester City, Chelsea and Arsenal or Tottenham (depending on how the last few games of the season play out).
Away from the heavy spend of sports marketing strategies is the other philosophy to bring Web3 into the mainstream – buying the media. Leading Web3 outlet CoinDesk is owned by the Digital Currency Group, while aforementioned cryptocurrency exchange Binance wants to go two better by purchasing a slice of Twitter and taking a $200m stake in Forbes, the legacy financial media outlets which has increasingly leant into technology and Web3 coverage (checkout FN’s interview with Forbes’ crypto writer Billy Bambrough here).
“Media businesses have had a hard time transitioning from no-web, to Web1 to Web2 and we would really like to help them transition to Web3 using blockchain technologies,” Binance CEO Changpeng Zhao told CNBC, who stressed that he was looking at industries beyond the media to bring into the Web3 sphere. The $500m committed to the Twitter acquisition was presumably actioned on the same rationale.
Could a film business like Lionsgate be the next M&A target for cash-rich major Web3 companies or perhaps other legacy news media companies like TIME, which has auctioned off its front pages as NFTs? Either way, we’ve now entered the Web3 media spending spree era.
📺 Media news of interest
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What Elon Musk could learn from Snapchat
Web3 entertainment newsletter Dirt raises $1.2m
Social media breaks improve mental health
All the 2022 Pulitzer Prize winners
CNN is going to ‘try some things’
For high-praise, tips or gripes, please contact the editor at firstname.lastname@example.org or via @ianjsilvera. Follow on LinkedIn here.
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