Crypto Targets Sports Sponsorship to Drive Awareness and Adoption
Whilst Bitcoin will always be seen as the project that proved the theories about digital assets and blockchain technology, it has been the emergence of rival blockchain protocols that has provided the foundation for wider adoption of this new technology.
Since its inception Bitcoin has established itself as a significant rival to traditional investment assets and remains the project that dictates the crypto market. However, the development of smart contract capability on rival blockchain protocols such as Ethereum, Cardano, Avalanche, Terra and Solana, has established utility and driven wider adoption.
Crypto is now an industry with a Market Capitalisation circa $2 Trillion USD, which has been driven primarily by institutional investors looking to hedge against fiat currency inflation and a stagnant fixed interest market. However, it has been the emergence of de-centralised finance (DeFi) applications and tradable digital assets such as non-fungible tokens (NFTs) that has driven adoption in the retail market.
The crypto market is still in its infancy when you look at the size of the global equity markets or even commodity markets such as gold. However, the growth in the last 24 months would suggest that crypto is starting to build the foundations for mass adoption and utility.
Currently, there are several significant challenges facing crypto projects. There is still a widespread scepticism about crypto technology that is driven by ignorance and the fraudulent actions of a relatively small number of bad actors in the space. There is also a huge challenge in establishing a share of voice in an enormously cluttered market.
For a project to maximise the current interest and euphoria in the market, there is a need to identify a target consumer and start to build a narrative to engage and educate the consumer. We would argue that sports sponsorship represents the perfect platform for this, and this is validated by the significant increase in the number of crypto projects associated with sports brands and organisations.
One of the first high profile crypto sponsorships was in 2018 when Litecoin sponsored one of the largest UFC events of the year, UFC 232. As Official Cryptocurrency Partner of the event, the Litecoin logo featured in the middle of the Octagon and stimulated over 40 million Twitter impressions in the 10 days surrounding the event. This partnership was clearly very successful in generating mass awareness of the Litecoin brand, and there have been a number of similar partnership that have followed.
Crypto derivatives exchange FTX, has been following a similar strategy in recent months. Longer term deals have included Official Partnerships with Major League Baseball and Mercedes-AMG F1 Team, stadium naming rights deals with the Miami Heat and University of California, as well as a significant $210 million USD naming rights deal with e-sports franchise Team SoloMid.
Crypto.com is another business that have built a significant sports portfolio, which includes sponsorships in Formula 1, UFC, NHL, NBA, Serie A and Coppa Italia. What’s interesting about these partnerships is that it goes beyond brand awareness and starts to integrate crypto technology showcases.
It is these more integrated partnerships that present the most authentic opportunity for crypto projects to engage consumers. Authenticity is key to any marketing partnership and by blending brand visibility with legitimate integration of crypto technology, presents a huge opportunity to solve the challenges crypto faces from lack of awareness and trust in the technology.
We have written previously about the opportunities that NFTs present sports organisations and their customers, and it will be exciting to see how crypto technology integrates into sports. Socios, for example, has partnered with over 40 major sports organisations to launch fan tokens to increase their digital engagement with tech-savvy fans and establish new commercial revenue streams through NFTs and other digital collectibles. Algorand has also established a partnership with the Drone Racing League and will develop a blockchain-enabled ticketing system, alongside digital collectibles.
A recent partnership that has looked to harness the mass media appeal of English football has been World Mobile's Principle Partnership of Fulham FC. The deal will see World Mobile branding on the teams kit, as well as significant pitch-side branding. The deal hopes to harness the significant global media reach of English football to promote its objective to establish digital connectivity across the continent.
With the number of DeFi projects growing rapidly it will be interesting to see if these brands start to appear in the same locations as more traditional finance and banking institutions. Whilst they will no doubt be looking to target a younger and more digital savvy consumer, sports like Golf, Sailing or Hockey could provide a cost effective vehicle to access a premium demographic. Whether it's through athlete endorsement or event sponsorship, this more targeted approach will appeal to many.
The beauty of sports sponsorship as a marketing tool is its versatility. No matter the target audience or the budget, a carefully considered sports strategy can deliver significant return on investment. Whether the objective is mass awareness or more tactical targeting of a specific consumer demographic, there will be a partnership or portfolio of partnerships to suit.
The key to success is establishing very clear marketing objectives and finding the correct balance of rights fees and activation budget. The general misconception with sports sponsorship is that it is an expensive branding exercise, however with the right strategy, it can play a hugely effective role in driving adoption and dispelling negative sentiment towards crypto technology.
If you are a crypto business and want to learn more about how you might leverage sport sponsorship as part of your marketing strategy, get in touch!