“See what cryptocurrencies can be” is a bold statement for a cryptocurrency company to make right now amid an ongoing downturn in the sector, along with regulatory scrutiny and several legal battles. However, crypto exchange platform Kraken has made it the catchphrase of a new campaign as it seeks to overcome what many see as a broken idea and a shrinking market.
Founded in 2011, Kraken is one of the oldest Bitcoin exchanges and has become one of the largest crypto exchanges in the world. Surprisingly, this is its first global advertising campaign, which began this week in the US and UK across TV, social media and out of home adsincluding the London Underground acquisitions.
He crypto marketing pitch A lot has changed since the last bull run. While Super Bowl Ads last year from FTX and Crypto.com focused on FOMOothers in recent months have gone on to address how to solve the various ecosystem problems that have been highlighted during the bear market.
Now, Kraken CMO Mayur Gupta wants to start what he calls the “third wave of crypto marketing” to reach future users. But can cryptomarketing really help rebuild trust in such a beleaguered category?
"There's a lot of negativity around what needs to be fixed," Gupta said. “It's important, but I don't think the next billion users are going to jump into crypto based solely on what's broken. Of course, highlight what's broken, but we're also absolutely focused on what the real-life use cases for cryptocurrencies are, why cryptocurrencies make sense, the substance of cryptocurrencies and not just the surface and volatility." .
In new print and OOH ads, Kraken describes cryptocurrencies as “no borders, no banks, no boredom.” Another promises to “do for finance what the Internet did for information,” while another offers the ability to transact with “anyone, anytime.” However, the narration in a new television advertisement conveys a more serious tone: “Money makes the world go round and round and round. “Same old problems, same old story over and over again… What if we could make our system more open, inclusive and transparent?”
“Unlike many other verticals, the cryptocurrency category is still in its nascent stages,” said Gupta. "A billion people don't wake up every day around the world saying, 'Oh, I'm going to move away from a traditional bank and I'm going to self-custody my assets,' or 'I'm going to buy Bitcoin tomorrow or I'm going to buy an NFT.' So we are starting at the top of the pyramid.”
The goal is to commercialize the entire cryptocurrency category, Gupta said, which requires a lot education. He cited a Block Inc 2022 Report, which found that 51% of people had not purchased Bitcoin because they did not know enough about it. (Kraken's other recent marketing efforts include a deal with Formula 1 team Williams Racing and a collaboration with Kitboga, a Twitch streamer and YouTube creator known for exposing crypto scams.)
It's too early to know if Kraken's marketing will deliver the results Gupta hopes. But Gartner analyst Andrew Frank said all historical examples of major changes occurred during the media era.
"Since digital media has overtaken television, the fragmentation, noise level and distrust of digital media makes it almost impossible to sustain a mindset change campaign long enough to have a mass migration effect," he said. Frank.
as rivals spent tens of millions of dollars on ads, Kraken only spent $10,000 in the second quarter of 2022, according to data from Vivvix, which included paid social data from ad tracking company Pathmatics. Although Kraken declined to reveal its advertising budget for the new campaign, it has spent $3.1 million on advertising since the beginning of 2021, according to data from Vivvix and Pathmatics.
According to the same data sources, four other crypto companies have spent much more on advertising during the same time period: the biggest spender was Crypto.com ($134.9 million), followed by FTX ($93.3 million after adding $4.25 million from FTX.US), Coinbase ($64.3 million), and Grayscale Bitcoin Trust ($18.9 million).
Overall, the quarterly ad spending of the top 10 cryptocurrency brands amounted to $3.7 million in Q3 2023, $12.1 million in Q2, and $3.1 million in Q1 . For comparison, last year cryptocurrency brands spent $121 million in the first quarter before falling to $35.8 million in the second quarter, $19.2 million in the third quarter, and $11.2 million in the third quarter. million dollars in the fourth quarter.
Opportunity and trust
The timing of Kraken's campaign is also noteworthy, if not questionable: it is launched in the middle of the high-profile trial of FTX founder Sam Bankman-Fried, who allegedly defrauded customers and investors of the rival crypto exchange. (Observers noted that the stakes in the trial extend far beyond FTX, with one headline describing it as “cryptographic colonoscopy”.) And earlier this week, Binance, the world's largest crypto exchange, stopped accepting new customers after regulators blocked its marketing to British consumers.
When asked about the timing, Gupta said the FTX test is "not a reflection of cryptocurrencies" but rather a "function in different levels of fraud and individual greed." Gupta argues that it is “time to refocus on what this incredible revolution really is, how it impacts people's lives, both today and even more so in the future.”
“We are not naïve to think that cryptocurrencies are perfect,” he continued. "In fact, none of the innovations we use today in our daily lives were perfect in the early years."
There are also other issues that have contributed to eroding trust, including "untrustworthy influencers" and countless cryptocurrency-related Twitter bots, said Jack Cameron, co-founder of agency Web3 Insomnia Labs.
"The consumer has to be smarter about how they are impressed," Cameron said. "Especially with platforms like X, where we know bots have existed and will continue to exist."
Scams, scandals and bots have dampened trust in cryptocurrencies, said Anas Al Fattal, a marketing professor at the University of Minnesota Crookston. “Unfortunately, bad news travels fast,” he said. "And with an example of FTX, people start creating stories and saying 'Did you see what happened with cryptocurrencies?'"
While researching consumer mindsets on cryptocurrencies, Al Fattal, who is now writing a book on trust and cryptocurrencies, found that new investors are most influenced by social factors, including social media, influencers, TV ads and the thoughts of family and friends. On the other hand, experienced investors spend a lot of time researching crypto projects and are more influenced by crypto developers.
"Promotion is what the company can control," he said. “But if you look at the other side, the users themselves or consumers are more powerful when it comes to promoting a platform and generating trust in it. But how can you get more users to trust you?
At Kraken, Gupta hopes to have an answer to that.
