Crypto Companies Score Big: How Sports Sponsorships Fuel Brand Growth and Engagement

Throughout history, companies across various sectors have been captivated by the immense potential of sports partnerships. Looking back, tobacco companies, followed by beer brands, telecom companies, and airlines, all bolstered their outreach with sponsorship deals worth staggering amounts of money. Crypto brands are now following suit, with Nielsen projecting blockchain companies to invest around $5 billion in sponsorships by 2026.

According to PYMNTS, there has been an estimated 7,100% increase in cryptocurrency sports sponsorships over the past four years. The top four sponsorship deals in the crypto industry amounted to approximately $1.2 billion combined last year. All of this begs the question: why has sports sponsorship attracted such a gargantuan investment from crypto brands?

To me, the answer is clear: sponsorship deals help you establish brand awareness and grow the customer base ahead of your competitors. Early adopters have the advantage of benefiting from audience engagement and creating a close relationship with the customers, making them less likely to switch to other brands. These pioneers become synonymous with the industry, projecting confidence and familiarity and aspiring to become the industry standard. And with crypto being a relatively new industry in the eyes of the mainstream audience, a battle to become a household name is still ongoing.

Aside from bringing legitimacy to the brand in the eyes of the mainstream audience, there’s an additional value provided by sponsorship deals. While crypto platforms heavily invest in performance marketing for their user acquisition, major sponsorships play a crucial role in attracting customers at the top of the marketing funnel. The idea goes that by securing these sponsorships, they won't have to solely rely on bidding for online search clicks. Instead, they aim for potential clients to naturally seek out their brand when looking to invest and trade cryptocurrency.

Let’s look at some strategies the crypto enterprises have employed and look into the benefits they are chasing with these deals.

Going for the Widest Reach

Soccer, known as football in many parts of the world, reigns as the most watched sport globally, offering an opportunity for crypto sponsors to reach a vast and diverse audience. Almost 1.5 billion viewers watched the 2022 World Cup finals, according to FIFA; hundreds of millions of fans watch the European Leagues year after year. The sport's immense popularity and widespread viewership provide an ideal platform for crypto sponsors to gain maximum exposure and engage with a broad range of individuals. By aligning themselves with clubs like Manchester City, which has a multimillion-dollar deal with OKX, or players, like the latest deal between Lionel Messi and Bitget, crypto sponsors are hoping to tap into the fervor surrounding the game and leverage its global appeal to get their name out there. 

And while soccer remains uncontested in terms of reach and appeal worldwide, other sports experience rapid growth internationally and in the United States, providing more opportunities for crypto companies to connect with new audiences.

Following Growth

A total of 445 million people watched Formula 1 on TV in the year 2021. US viewership grew 47% from 2021and total race attendance for 2022 was 5.7 million, up 36% compared to 2019, according to Forbes. More than that, the F1 audience skews young. The average Formula 1 fan is 32, and the sport has been enjoying increasing popularity among Gen Z recently, which will be pushing this number even further down. As four-in-ten men ages 18 to 29 (43%) have traded, invested, or used crypto, this makes sponsorship deals a no-brainer from a demographics standpoint. Tezos has a partnership with McLaren Racing, and almost every team on the paddock has a crypto sponsor as well. Even the reigning champions, Red Bull, are sporting a Bybit logo on their livery. 

Though men comprise the majority of the Formula 1 viewership, women are getting into it, too. Around 40% of F1 fans are now female, up 8% from 2017, and more women are attending races. It may come as a surprise that there's such high female viewership of a sport that doesn't currently include any women on the F1 grid. Throughout Formula 1's history, only two female drivers have competed in the prestigious championship: Maria Teresa de Filippis in 1958 and Lella Lombardi in 1975 and 1976. However, there are efforts to try and make this happen through the F1 Academy, a new all-female championship launching in 2023 by Formula 1. Through the Academy, the leadership of F1 hopes to foster female talent and have a woman on the grid in the next few years. This could also be a factor for sponsors, who are always on the hunt for new ways to grow their female audience.

Connecting With New Demographics

The Women’s National Basketball Association League has officially entered the wide world of cryptocurrency. The league joined forces with Coinbase in October, making the company the league’s exclusive cryptocurrency platform partner. Beyond the branding that comes with a sponsorship deal, all 144 members of the WNBA Players’ Association received Coinbase accounts and crypto funds to become more familiar with the space. The partnership also features educational sessions on crypto and NFTs for the players – a strategy to boost engagement beyond the surface level, no doubt. 

One way to look at this is that crypto firms are investing in the WNBA, aiming to expand their female demographic and engage with a growing fanbase of women in sports. The latest WNBA viewership demographics reveal that most of the audience are indeed women, accounting for 52% of the overall viewer,s and among women aged 18 to 34, the viewership increased by 71%. 

Stepping Into Emerging Markets

As American football gains increasing popularity across Europe, claiming second place as the most popular sport in countries like Germany, we see crypto companies jumping in on the action. Choise.com just struck a sponsorship deal with Vienna Vikings for their second season in the European League of Football. The Vienna Vikings have established themselves as one of the strongest American football teams in Europe. The Vikings claimed the Eurobowl title five times from 2004 to 2013. The team also secured the championship title In their debut season in ELF in 2022. As the reigning champion, the Vikings are determined to Run It Back this year and defend the ELF title. Choise.com partnered with Vikings to enhance the team's apparel, social media presence, and stadiums with its branding. During the team's first game of the season, Choise.com's CEO flipped a coin with his son in the center of the stadium, commemorating the start of their collaboration. 

What’s Next?

The question arises: is this trend going to continue? Sponsorship usefulness has historically diminished as markets mature but proves invaluable while the industry is in the growing stages of mainstream appeal. 

In light of the recent crypto winter, we have witnessed signs of a slowdown in sports sponsorship deals, reflecting a cautious approach from companies in the cryptocurrency industry. But advertising remains critical in creating awareness, building brand recognition, and shaping consumer perceptions. When a brand stops advertising, it risks losing visibility and top-of-mind awareness among consumers.  

Sponsoring teams in sports is a strong indicator of a healthy brand and is often pursued by companies, primarily for their engagement and reputational goals. Investing in sports sponsorships allows these companies to shape their brand identity, establish credibility, and leverage the emotional connection and loyalty that sports fans have for their teams. It serves as a strategic move that aligns with the overall business objectives of crypto companies, enabling them to reach a wider audience and ultimately contribute to their long-term success in the industry. As we see the industry recover from the recent downturn, I don’t see any reason for collaboration with sports teams and leagues to slow down any time soon.