Short term revenue losses for media platforms as crypto exchanges go slow on advertising

Hit by the lasting impact of COVID 19 pandemic, India’s media sector had pinned hopes on Crypto exchanges to make up for some losses through their aggressive advertising campaigns.

However, the government’s plan to ban private crypto exchanges in India is likely to have a larger ramification on India’s media and advertising sector that saw a good amount of revenue coming in from cash flushed crypto platforms in the past six months.

Just to give some sense of the advertising undertaken by crypto players; all firms put together spent Rs 50 crore, only on the recently concluded T20 Men’s Cricket World Cup.  Similarly, the industry was also driving the revenue of English and business dailies by giving full page jacket advertisements.

According to industry experts, crypto platforms were planning to spend around Rs 180 crore on advertising in this financial year alone.

The exchanges are now either thinking of pausing the flow of ads till the regulatory position becomes clear or issuing ads that are more informative for the investors.

One of the crypto trading platforms, ZebPay is now planning its advertisements in line with the regulatory measures.

Raj Karkara

Raj Karkara, COO at Zebpay, shared that it will continue to educate investors with appropriate information to help them make educated choices on their investments.

Sathvik Vishwanath, Co-Founder and CEO, Unocoin, said that the platform has been very subtle and responsible in its advertisements and sponsorships. He believes advertisements will continue, maybe with a small pause in between to get the message right.

“We are cautious to not make it lucrative or pushy in nature. So given our communication language, we have not considered refraining from advertisement opportunities that we have on both physical channels and digital channels,” he added.

Sameer Makani

With the government seeking to regulate the crypto currency, and not consider it as a legal tender to prevent underground trading, Sameer Makani, Co-Founder and Managing Director, Makani Creatives, said that ads will have to be revamped with new messaging that will help the viewer to make informed decisions.

“Moreover, the impact of the policy on the ads will be minimal as this would now become an additional asset for investment which in turn can potentially become the messaging of these cryptocurrency firms,” he added.

According to broker discovery and comparison platform, BrokerChooser, the total number of crypto owners in India now stands at 10.07 crore, which puts it ahead of every other country in the world. US is at the second position with the number of crypto owners at 2.7 crore, followed by Russia (1.7 crore) and Nigeria (1.3 crore).

According to the Reserve Bank of India, almost 70% of Indian investors have less than Rs 3,000 invested in crypto. Total investment in crypto in India stands at Rs 6 lakh crore. The country currently has 15 exchanges.

In a recent meeting, Prime Minister Narendra Modi had raised concerns over misleading and over-promised ads by the crypto exchanges and trading platforms.

Mihir Karkare

Mihir Karkare, EVP at Mirum India, believes that certainly, the brands operating in this space are going to be much more cautious about their spends till more clarity is achieved and this is likely to have an impact on their agencies as well.

Siddharth Devnani, Co-Founder and Partner, SoCheers, shared that the partner agencies working closely with such players will definitely experience a sudden downturn, having dedicated both monetary and creative bandwidth to the ongoing and upcoming projects.

Nisha Singhania

Nisha Singhania, Co-founder and Director of Infectious Advertising, said that the creative agencies would lose out on some revenue, but it will have far greater impact on the players and people who have cryptocurrencies. Creative agencies will find new categories and clients to work on.

“The government would in their wisdom ban a product if they feel that it is harmful to people. If cryptocurrency itself is banned then of course advertising will stop, however, if it continues then there may be a need to be more responsible in advertising. Any loss to the advertising world would be short term, in terms of revenue,” she said.

Since the past few months, crypto media spends have grown by leaps and bounds and currently stands close to Rs 12- 14 crore per month across mediums.

Arnob Mukherji

Arnob Mukherji - Business Head – Ethinos, said that this will now completely stop.  Suddenly there would be pin-drop silence and all users will be looked upon with suspicion.  Obviously, it will have its repercussions as a segment that had the potential to grow leaps and bounds but is now on its deathbed.

“Agencies (hopefully not) will be holding on to clients who may be termed as penny stocks.  And the growth story will get stunted again,” he said. 

Mukund Olety

“I think India is regulating and not banning crypto. Regulation would further help in legitimizing the space and more players could pop up. Crypto exchanges have huge investments behind them and as demonstrated during Diwali and IPL they are not afraid to spend and make some noise. A blanket ban would of course curtail the entire sector,” said Mukund Olety, Chief Creative Officer, VMLY&R.

He doesn’t think brands will pause/suspend ads unless explicitly asked to do so. As the space evolves and brands mature, some of them will start to take a leadership stance and educate the audience.

“Over time, we will have two or three big crypto exchanges in the country. And they will drive the conversations,” he added.

Pratik Gupta

A lot of the platforms are not crypto exchanges themselves but trading platforms. But of course, they will be affected as the choices of cryptos will be reduced now, said Pratik Gupta Co-Founder FoxyMoron and Zoo Media.

“Some of these players stopped advertising three-four days ago. There is a short-term impact. Long term impact will be determined once we get to know what exactly the rules are going to be. Crypto has been a massive player in advertising, so the ad world will see a decent revenue loss if they stop advertising. But, it’s also true that it was too new for a lot of ad agencies to have already factored in the overall gain they have made. So overall it will have an impact on the agencies who are working with these clients,” he added.

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