Crypto sponsorships are unchartered waters for many of us. When the building that carried the Staples Center moniker for 22 years shed its long-time name to become the Crypto.com Arena in a massive $700 million deal over 20 years, the necessity to level up in the FinTech space reached new heights for sponsorship marketers. It was a 9.5 magnitude earthquake in the naming rights world.
To help us navigate the crypto, NFT, and blockchain landscape, we invited Kevin Kane, Senior Manager of Data Strategy for Navigate on our 7in7 Series. Kevin is a sought-after thought leader in crypto sponsorships. He shared his insights on the biggest deals, the major players, and what the future looks like for sponsorship and crypto.
Now, we’re sharing the top tips on how sponsorship marketers navigate this new frontier.
Know What’s in it for the Big Players (and who they are)
The big three cryptocurrency exchanges are Coinbase, Crypto.com and FTX. It’s a branding arms race and sponsorship money is the weapon of choice.
The five basic reasons that these big-time players are investing big money in sponsorships:
- Business is booming. People invested in cryptocurrencies numbered 110 million in 2020. In 2021, that number doubled to 220 million. Kevin expects that close to half a billion people will have joined the crypto movement by the end of this year. The buzz about crypto is almost deafening
- The crypto market cap is $2.7 trillion and growing. That’s more than Microsoft and almost as much as Apple.
- Large financial institutions are betting big on crypto. US Bank and JP Morgan Chase are among the big banks getting their crypto-investing feet wet. They see crypto as a hedge against inflation. Even better than gold.
- Venture capital is moving into the crypto space. In November of 2021 alone, $3.5 billion was raised for crypto projects.
- Despite rollercoaster short-term markets, the long-term trajectory is upwards for the coins and the companies behind them.
Leverage the Strength of Your Brand
The primary goal for all crypto exchanges is brand awareness. Exchanges want to be top-of-mind when it comes time for a prospective new customer to open an account. Even before a new prospect begins a Google search, each wants to be the name that comes to mind. Each wants its brand so ingrained in our heads that its brand becomes the automatic go-to. It’s a race to get their respective brands out there in a big way. Make sure your team has done the work to assess the value of your property’s brand strength so you can come to the table well-positioned to leverage your audience and reach.
Start Planning Now
If you’re a seller, understanding the lay of the land is paramount. Before the CEO asks what the crypto strategy is, having a strategy already mapped out will be helpful, even crucial. Even if crypto is not on the immediate horizon, knowing how to knowledgeably talk about it will be important. About $17 million was spent on crypto sports sponsorships in 2020. The number exploded to over $605 million in 2021. The market is growing at an exponential rate.
While the big three exchanges have already made many of their big sponsorship moves, they’ll continue to spend over time. The low-hanging fruit will be the emerging brands that are new to the market. Sponsorships will be a significant component in their marketing plans. Sellers will be well served to know who they are, where they’re coming from, how to spot them early in the game and how to reach them.
The big, bold sponsorship deals exchanges have done so far demonstrates that their presence in the sports world enables them to reach and influence their target customers. The demographics of sports fans are a good fit. Early on, crypto adopters skewed young. Now crypto is attracting older fans who follow the top five: football, baseball, basketball, ice hockey and soccer. Collegiate athletics is in the mix too. There’s a lot going on with NIL now (name, image and likeness). Expect to see college sports athletes endorsing crypto-related products before long.
Cross-Check Your Contracts
While our discussion so far has focused on crypto, traditional FinTech brands are also adapting. PayPal and Venmo, for example, have numerous partnership deals throughout the sports segment. They too are pushing their crypto services. That suggests possible conflicts with crypto-specific brands – namely exclusivity.
Sellers will want to be careful about how they handle allocating crypto exclusivity. Properties will want to initiate conversations with current partners and prospects about contract language dealing with exclusivity and contract cut-outs. They’ll likely not want just one crypto business partner when additional and diverse crypto waves hit. Be clear and upfront.
There is so much to learn and so much to track. Sponsorship marketers will need to get familiar with crypto brands. Setting up sports sponsorship and crypto alerts on Google and other financial news sources can help. Follow research and data companies like Navigate have insider gurus, like Kevin Kane, who are sharing their insights on blogs and webinars.
Sponsorship Mastery is working with events and properties across the country to navigate this new frontier. If you need support developing your crypto strategy and developing new partnerships, send us an email at firstname.lastname@example.org.