Blockchain technologies and in particular cryptocurrencies exploded onto the main stage in 2017 with many a speculator watching the price of an unknown yet familiar virtual currency called Bitcoin skyrocket to a price of US$20,000 in December last year.
The cyptocurrency market seemingly corrected itself not long after, with the price of Bitcoin dropping to a more humble US$5,800 in June this year and now it seems once again (at the time of writing) to be climbing northward towards the US$9,000 mark. Despite its volatility, what has become apparent is that crypto is here to stay and with the emergence of this new asset class is an underlying technology called blockchain that is gradually seeping into the walks of everyday day life including sports.
Since opening the doors to Van Hawke Sports we have seen a momentous shift in how these new brands perceive sports as vital marketing assets.
It’s a hugely exciting time for the sports industry as a whole. Blockchain technology and cryptocurrency are creating new revenue verticals for right holders that simply did not exist as little as 12 months ago. Even existing household brands are leveraging the use of the word “blockchain” to drive up their share prices, Kodak’s stock rose more than 200 per cent following the announcement of KodakCoin. By general consensus, the market capitalisation of all cryptocurrencies (currently 1,694 according to Coinmarketcap.com) is expected to exceed US$1 trillion in 2018.
However, there are a number of restrictions currently in place of crypto-based advertising from the incumbents such as Google, Facebook and Reddit which is driving these new brands to actively seek alternative ways to raise and enhance awareness on both a regional and global scale. This is where sports marketing comes into its own.
Arguably there is no better way to showcase your brand than to align it with a global sporting property that can feed your brand message directly to your target demographic. Already we are beginning to see blockchain and crypto brands entering into partner agreements within sports, such as English soccer giants Arsenal and Cashbet or Dragon Coin and Techeetah in Formula E, which they believe best fit this ideology and their marketing strategies.
Arguably there is no better way to showcase your brand than to align it with a global sporting property that can feed your brand message directly to your target demographic
There are also increasing number of sports ambassadors in place endorsing brands in this sector such as; Lionel Messi and Sirin Labs, Caroline Wozniacki and APP Lympo, both Eden Hazard and Sergio Aguero endorse All Sports Chain, James Rodriguez and his own JR10 token.
It is understandable that sports such as soccer and Formula E lead the charge with current crypto sports sponsorship due to their global reach, viewing figures, fan engagement and technological synergies with the latter. Nevertheless, at Van Hawke Sports we have seen an increase from brands wanting to explore a broader range of sports such as Formula One, National Football League (NFL), National Basketball Association (NBA), sailing, golf and, inevitably, esports as ways to differentiate themselves in what they perceive as already being the norm and wanting to create more regional based campaigns.
It must be noted though that as this market segment grows and becomes increasingly saturated, education is the key. Right holders need to adapt and work hand in hand with the brands to understand their objectives and offer non-traditional elements, whereby components such as activation and hospitality might not be required due to the lack of physical presence and global co-location practices of these companies. Needless to say, as this is an emerging industry, brands can also learn from the rights holders as to how best utilise their assets based on their extensive first hand experience.
One thing that remains consistent with this virtual pot of rainbow coins is the apparent lack of regulation. The prospect of a rights holder being the first to market to partner with a crypto or blockchain brand is exciting yet creating a flurry of confusion as to how to perform the due diligence and accreditation of such firms. Nobody wants to be associated with the next crypto scam that have unfortunately become commonplace in this opaque sector.
At Van Hawke Sports we actively reject over 90 per cent of enquiries received from crypto brands seeking to explore sports marketing opportunities, mostly due to the failings of the comprehensive vetting procedures we have in place to screen legitimate enterprises or those that have a valid product or service. That said, regulation is on its way with regulatory bodies such as the SEC seemingly leading the charge on what can be classed as a security. In the interim rights holders simply have to remain vigilant and can enroll the services of specialist agents to offset risk.
As with the emergence of any new industry there is always a steep learning curve for all parties involved. It’s an exciting time; with blockchain and cryptocurrencies we may be witnessing the dawn of the new global titans, the next wave of Facebook, Apple, Amazon, Netflix and Google all of which are now actively seeking to raise their brand awareness and cement their positions as dominant global players. The proliferation of crypto in sports has only just begun.
Sunny Singh is the chief executive officer of Van Hawke Sports, a full-service sports marketing agency providing specialist services in sponsorship consultancy and activation for the Foreign Exchange (FX) and Cryptocurrency sectors.