Formula 1's Crypto.com Sponsor Is Falling Apart

[Hydrogen]

Ad Age illustrates just how quickly a booming company can fall apart.

If you’ve watched a Formula 1 race this year, there’s a good chance you have — if only unconsciously — seen plenty of Crypto.com ads. Along with companies like Aramco, DHL, Emirates, and Heineken, Crypto.com has looked like it’s become one of the key players in financing the future of global open-wheel motorsport. But right now, all that money might be drying up.

A new report from Ad Age’s Asa Hiken describes a company that has marketed itself into a downward spiral. If you’ve watched any sporting events in the recent past, you’ve probably either seen a commercial or an eventside ad for Crypto.com, a cryptocurrency exchange platform. Now, it looks like thousands of employees are being let go as the “crypto winter” descends.

Just after Crypto.com announced that it had hit the 50-million user mark — and just after it had served as a primary sponsor for F1's Miami Grand Prix — the crypto market crashed.

From Ad Age:

In the months that followed, Crypto.com quietly downsized many of the partnership deals intended to garner mainstream attention for the brand, and in some cases the firm has attempted to pull out from these deals altogether, according to details shared by former and current employees at the company who spoke with Ad Age on the condition of anonymity.

The exchange also saw a reduction in its headcount of previously unreported scale, with 30% to 40% of its pre-summer workforce departing the company from June through August—the vast majority of which were due to layoffs, according to former and current employees.

A lack of internal directories prevented Ad Age from confirming exact numbers, as well as differentiating between layoffs and natural attrition, but multiple sources independently stated that just over 2,000 employees have left the company since layoffs began. Crypto.com was previously reported to have let go of just over 1,000 employees at most. Marketing personnel were some of the first to be targeted by the layoffs, including an entire in-house creative team that was eliminated mere months after its creation, sources said.

In the article, one advertising professional who worked with Crypto.com described the company as follows: “I’ve worked with many ambitious clients before, but Crypto.com is probably the most ambitious client I’ve ever worked with.” That’s because, in a span of less than a year, the brand became internationally known thanks to its intense marketing push that saw it become a massive enterprise. It worked well at getting Crypto.com’s name out.

But a downturn in crypto interest saw the platform tumble. Crypto.com has dissolved deals with Angel City F.C., Twitch Rivals, and the UEFA Champions League. It has maintained several other deals with sports teams or events but has in some cases reduced the number of hospitality packages available.

Right now, the future of Crypto.com and cryptocurrency as a whole is a little unclear. It obviously hasn’t become a universally adopted form of currency, and the initial allure seems to have faded. It could keep tumbling, or it could see a new rise in interest. Formula 1 likely won't fall apart thanks to Crypto.com — but it's yet another fascinating chapter in the sport's long history of accepting sponsorship deals that aren't quite cut out to meet their promises.



https://jalopnik.com/formula-1s-crypto-com-sponsor-is-falling-apart-1849626650

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Terrible news, if true. I had high hopes for crypto dot com doing well with their sports enterprise. As they own and operate a crypto exchange, I was hoping it would help insulate them from volatility and negative price trends. It would seem trading volume in crypto is on something of a decline.

Does anyone know if crypto dot com has sources of revenue aside from their exchange. They expanded so quickly in so many major markets. Maybe it will give them enough holdings to survive and prosper over the long term. Considering how easily they expanded into mainstream sports markets, is it possible that many sports in general are on a decline? Enough so that there is a diminishing demand for sponsorships which made it easier for crypto dot com to get their foot in the door.

Video games and esports seem like the main growth sports that are gaining in size year after year. Other more physical and athletic sports appear to be in something of a decline. Am I correct in making that observation?

Also if you were CEO of cryptodotcom what steps would you take to secure the future of your brand? Is there an exit strategy or recession proof business plan that they can deploy here to turn things around?

[PX-Z]

Also if you were CEO of cryptodotcom what steps would you take to secure the future of your brand? Is there an exit strategy or recession proof business plan that they can deploy here to turn things around?

I actually don't know since business is not an expertise of mine lol.

That's huge responsibility to take care of actually. I wonder if they have an exit plan to welcome to bear market such huge as this or just it exceed their expectations, probably this is the case. The thing is most huge crypto business suffers so much.  It's like 50% of bitcoin or other crypto decreases its value that  affects businesses so much.

[bittraffic]

Their arena should be able to provide funds for them to survive this current crisis. They should be using it for the exhibition fights and gain profit including the PPV.

People not coming out of the house due to covid is helping esports to grow more than going physically to motorsports and car races. It's fun but people are saving because of the high prices.

[Yogee]

Their arena should be able to provide funds for them to survive this current crisis.

Are you talking about the formerly known Staples Center in Los Angeles? I thought they only bought the right to change the name to crypto dot com for around $700 Million but they do not actually own it. It was just for increasing brand awareness and not for earning profits from ticket sales or PPV.

[Wexnident]

I'm guessing it's due to overexpansion of sorts? I guess they took advantage of the hype to bring about the best but then were hit not only by the downturn of crypto but also due to the economic situation (imo), hence the layoff. I don't think they have anything outside of their Exchange and NFT marketplace.

Video games and esports seem like the main growth sports that are gaining in size year after year. Other more physical and athletic sports appear to be in something of a decline. Am I correct in making that observation?

eSports is definitely up there, but I don't think you can also call the athletic scene dying, more like stagnated (since I consider there's still a considerable fanbase behind them) while eSports on the other hand is still continuing its popularity growth.

Are you talking about the formerly known Staples Center in Los Angeles? I thought they only bought the right to change the name to crypto dot com for around $700 Million but they do not actually own it. It was just for increasing brand awareness and not for earning profits from ticket sales or PPV.

They indeed only bought the naming rights.

[davis196]

Why is this post in the Gambling Discussion forum?
Crypto.com isn't a crypto gambling company and Formula 1 has nothing to do with gambling(unless we are talking about sports betting).
The big cryptocurrencies companies are more or less like a "house of cards". They were growing too fast and too big, when the crypto markets were on a bull run. When the bull run ends, everything falls apart. The crypto businesses are as volatile as the cryptocurrency prices.
Why would a crypto company spend millions advertising on Formula 1? Can't they just spend less on marketing and achieve better results?

[NeuroticFish]

Terrible news, if true. I had high hopes for crypto dot com doing well with their sports enterprise. As they own and operate a crypto exchange, I was hoping it would help insulate them from volatility and negative price trends. It would seem trading volume in crypto is on something of a decline.

Does anyone know if crypto dot com has sources of revenue aside from their exchange.

I think that the exchange and cards were supposed to be those that bring the revenue. The spread on the exchange is quite a big money provider if you have plenty of users for it. Of course, on long term the users may vanish while learning that there can be cheaper alternatives.

And crypto com has a history of irresponsibly waste money. Such a gamble was even acquiring that domain name, which sounds great, but was overly expensive (millions iirc) and I am not convinced even now it was worth it.

If they indeed didn't take the crypto winter into account, then they are yet another exchange/company from somebody's list (I think CZ stated at some point that quite a number of exchanges look really bad now).

But, with some luck, crypto winter may be close to an end. If they're lucky, they may survive this one, this time. Still, if they do, they have to become more attractive and get more users, and learn to be more careful with their money.

Why is this post in the Gambling Discussion forum?

While OP has linked this to F1, I agree, this is about crypto com company/service, not about motorsports or gambling.

[dothebeats]

It's quite unfortunate really, but if you built your company heavily on ads and not focused on strengthening what you really offer, plus venturing out on other possible business fronts, this is what you'll get. They were extremely ambitious and bold in getting their name out there, and it's evident on getting deals left, right, and center on big sports teams and leagues.

They could have focused on one particular sport and perhaps branched from there before getting all these deals in one go. That way they can still get their name out while also allotting lots of time and resources on making their brand the real deal, as opposed to just advertising. A bad move, but hopefully they get out of this one.

[Rruchi man]

It's quite unfortunate really, but if you built your company heavily on ads and not focused on strengthening what you really offer, plus venturing out on other possible business fronts, this is what you'll get. They were extremely ambitious and bold in getting their name out there, and it's evident on getting deals left, right, and center on big sports teams and leagues.

Diversification can be good, but if not done calculatedly can suffocate a business. This IMO is the scenario crypto.com is facing. Their intention with the massive ads and chasing all the deals was good, but I think they lost focus and forgot one of the primary purpose of business which is to survive. As someone who is in business as well, I sympathize with other business owners when I see their businesses going through a tough time, I hope they recover and bounce back good. This new development should also serve as a warning to other business who plan on following the blueprint of crypto.com.

[passwordnow]

They're just being hit by the market's situation and I think that it's all well planned before they've got in into those major sponsorships where they've allocated millions in budget. But it seems that they're only focused on mainstream sports advertising and instead of having a portion of it on their own growth and development, there could be some part of it but it's too little because of what and where they've focused. Well, if I'm the CEO of it, can't do that much anymore but to get back stronger and use all of the resources to sustain each other's business ventures.

[LTU_btc]

It seems that they simply took too much and haven't prepared that market will go down that much. When I started to see their ads on all major sports like NBA, NHL, F1, EPL and etc, I was surprised that they have such deep pockets because advertising there cost huge money. Their 20 years deal with arena in L.A. summarize it very well. Everything is fine as long as things in market goes as they planned, but now things doesn't looks so positive.
P.S. OP or admins, please move this topic to Bitcoin Discussion, it has nothing related to gambling.

Their arena should be able to provide funds for them to survive this current crisis. They should be using it for the exhibition fights and gain profit including the PPV.

People not coming out of the house due to covid is helping esports to grow more than going physically to motorsports and car races. It's fun but people are saving because of the high prices.

Arena doesn't belongs to them. Crypto.com just bought naming rights, they won't earn anything from it. Such advertising will cost them $700 million for 20 years.

[bittraffic]

It seems that they simply took too much and haven't prepared that market will go down that much. When I started to see their ads on all major sports like NBA, NHL, F1, EPL and etc, I was surprised that they have such deep pockets because advertising there cost huge money. Their 20 years deal with arena in L.A. summarize it very well. Everything is fine as long as things in market goes as they planned, but now things doesn't looks so positive.
P.S. OP or admins, please move this topic to Bitcoin Discussion, it has nothing related to gambling.

Their arena should be able to provide funds for them to survive this current crisis. They should be using it for the exhibition fights and gain profit including the PPV.

People not coming out of the house due to covid is helping esports to grow more than going physically to motorsports and car races. It's fun but people are saving because of the high prices.

Arena doesn't belongs to them. Crypto.com just bought naming rights, they won't earn anything from it. Such advertising will cost them $700 million for 20 years.

I see. All for the marketing, they bought a right to rename for $700M. It's just like what @dothebeats said they've built their project heavily focused on ads but not the project itself. I have no idea what goes on with crypto.com, all I know is you can stake thier token in the exchange itself and earn from it. After that, they are already going for ads like being on UFC shirts.

[buwaytress]

None of this is really surprising, given Crypto.com's history, which can be traced back to bounty programs and their ICO launch even on threads on this forum

Short summary: Monaco was supposed to be an awesome crypto debit/credit card project. Raised millions, spammed this forum to bits, but they just never found a way to actually launch (despite millions and millions in crypto raised).

Lost a lot of money, but oh man, when the rally arrived in 2020, I bet you they reopened all their old crypto (all that ETH they raised around $100 must have made them super rich near ATH).

Don't know when they rebranded to Crypto, probably to distance themselves from their past failure (and losing a lot of people a lot of money). Just wait for the next rally, they'll probably not rebrand but I bet you they sit on crypto and sell high when their investors wilt away.

Suppose you could call them the ultimate gambling sponsor: being gamblers themselves heh.

[Pierre 2]

None of this is really surprising, given Crypto.com's history, which can be traced back to bounty programs and their ICO launch even on threads on this forum

Short summary: Monaco was supposed to be an awesome crypto debit/credit card project. Raised millions, spammed this forum to bits, but they just never found a way to actually launch (despite millions and millions in crypto raised).

Lost a lot of money, but oh man, when the rally arrived in 2020, I bet you they reopened all their old crypto (all that ETH they raised around $100 must have made them super rich near ATH).

Don't know when they rebranded to Crypto, probably to distance themselves from their past failure (and losing a lot of people a lot of money). Just wait for the next rally, they'll probably not rebrand but I bet you they sit on crypto and sell high when their investors wilt away.

Suppose you could call them the ultimate gambling sponsor: being gamblers themselves heh.

Well yeah I remember those days when they launched Monaco bounty campaigns. It sounded like ambitious project honestly. It was something crypto needed back then. But they couldn't exactly complete what they promised. But eventually i didn't even realize their rebranding was crypto com. I feel like we may count them successful in the end. I think their flexibility saved them. I think they won't easily fail.

[jostorres]

Also if you were CEO of cryptodotcom what steps would you take to secure the future of your brand? Is there an exit strategy or recession proof business plan that they can deploy here to turn things around?

I actually don't know since business is not an expertise of mine lol.

That's huge responsibility to take care of actually. I wonder if they have an exit plan to welcome to bear market such huge as this or just it exceed their expectations, probably this is the case. The thing is most huge crypto business suffers so much.  It's like 50% of bitcoin or other crypto decreases its value that  affects businesses so much.

I think each of us here has our own business. We enter cryptos because we are business minded and that business doesn't need to be big like crypto.com. We all take care of our business and we also create a plan to avoid it from falling. For big companies like crypto.com I think they do have their own plans but there is no way that they can totally avoid recession and other economic problems as that do have an impact here in cryptos.

Having a plan will only allow us to lessen the impact of the issues happening around. Cryptos' value might decline but the demand for it will increase eventually so it's always possible for them to recover what they have lost.

[uneng]

If I'm not mistaken, Crypto.com is also sponsoring Qatar world cup. Maybe they were really too ambitious with their marketing. They should have gone slower expecting the bull market couldn't last forever.

But I don't think sports are losing popularity or being replaced by esports. Each niche has its public which seems to be very loyal to the content they consume. What I see is a notable growment in cryptp and gambling advertisements at sports events, although it is more related to soccer.

I believe traditional companies found more efficient and cheaper ways to promote their products and services on the internet, therefore sports events had to find alternative companies to sponsor them and that is what is happening.

[swogerino]

That is really bad news for the people working there to be laid off from the crisis however for Crypto.com itself I think they will recover right now in November as they will be a sponsor of the World Cup in Qatar and we all know that the people who watch the World Cup is almost the entire world so there is a lot of exposure to be made for them from this event.

I loved them also when they entered in F1 as I am an avid fan of F1 not missing one race but they did not move forward there most probably because as a sport it has not the same visibility as soccer major leagues and alike.For them they should build up quite nicely from the Qatar event and hopefully they will start getting people back to work again,trying to expand further in new markets.