Crypto has taken the world by storm. Blockchain technologies have been popularized all over the world and have greatly impacted the global financial system. Furthermore, crypto is becoming embedded in popular culture as it is becoming omnipresent in all forms of popular media, including Blockchain socialmedia. Some of the biggest sponsorship deals of today involve cryptocurrency. However, there is one version of marketing that is exceptionally popular for web3 companies: celebrity marketing. But is it actually effective for crypto companies? Let’s find out.
What is celebrity marketing?
The employment of well-known individuals to create excitement about a product or service is known as celebrity marketing. These days, doing so often entails creating a buzz or encouraging interaction on social media. Moreover, companies use the popularity and influence of celebrities to promote their product and nudge their audience towards using their products/services.
Web3 companies regularly use this approach towards advertising cryptocurrency. Many celebrities have been avid advocates of different blockchain currencies, promoting them through social media or participating in advertisement campaigns. Some of the most notable famous ambassadors of crypto are Matt Damon, Tom Brady, Reese Witherspoon, French Montana, Mark Cuban, and many others.
Pros and cons of celebrity marketing
Every marketing approach has its own advantages and disadvantages. Since Crypto is a very specific part of the global industry, these factors are even more important for the acceptance of blockchain technology by the public
Because cryptocurrencies have significant market potential, web3 companies can use celebrity marketing to get people to further invest in the industry. This marketing strategy raises consumer awareness of a brand and gives companies more authority and exposure.
Large celebrity networks have a role in the effectiveness of celebrity endorsements. They can communicate with a large audience by using several platforms: television, traditional media, and social media. The effectiveness of this marketing approach is largely due to the celebrity effect. This concept refers to the ability of famous personas to influence the behavior of their audience and their attitudes toward a certain product or service.
Two major advantages of celebrity endorsements are the ability to enter new audience markets and the increase in sales. Because of their popularity, celebrities allow companies to be in front of a much larger audience, one that they might not have access to with other marketing channels. Even though cryptocurrency is one of the main global topics in recent years, it is still a young industry that benefits a lot from entering new markets.
Furthermore, brand ambassadors can lead to a significant sales increase. According to Social Media Week, a good celebrity endorsement can even lead to a 4% sales increase which is pretty significant, especially for bigger companies. For blockchain companies, that means more investors for certain cryptocurrencies.
However, there are some concerns when considering the fit between crypto companies and celebrity marketing. The high influence that celebrities have on their fans in combination with the unpredictability of the crypto market can lead to very bad consequences. A large number of people are influenced to invest based on the popular credibility celebrities have, leading to a lot of failed investments and an angry customer base.
There are several examples of this in recent years. A year ago, Crypto.com launched a
100-million-dollar campaign with Matt Damon as their brand ambassador that was very effective in getting people to invest in different cryptocurrencies. However, Bitcoin, one of the most popular cryptocurrencies, had its value fall down by 70% since then, leaving its investors out of a lot of money. Another example is former NBA star Paul Pierce that vouched for EthereumMax and got sued by disgruntled investors after its value plummeted by 98%.
Experts believe that this marketing strategy is very risky, as it is promoting the product without focusing on what it actually is. Serious web3 investors want to see value in these pitches, so using technical terms and language to explain why people should invest in crypto would be appreciated more than a celebrity advocate. Furthermore, it will bring more long-term credibility with a knowledgeable audience, which will help the industry grow in the right way.
To conclude, it is questionable whether blockchain companies should use celebrity marketing as their main advertisement approach. The unpredictability of the crypto market is not a good fit with celebrity endorsements, even though it has some short-term benefits. Providing clear technical expertise on crypto is much more successful in building a long-term loyal customer base.