Ad spend of major Indian cryptocurrency exchanges fell by nearly 89% in the first half of 2022 compared to the same period a year earlier, says a report from India Today.
According to cryptocurrency data research firm Credit Rating for Exchange Blockchains and Coin Offerings (CREBACO), major Indian cryptocurrency exchanges spent the most on advertising in 2021 in the second half of the year.
CoinDCX spent nearly INR 40 crore (5 million) on Star Sports during the Indian Premier League in November 2021 and another INR 8-10 crore ($ 1-1.25 million) in sponsoring Bigg Boss on Viacom 18. CoinSwtich Kuber spent over INR 10 crore ($ 1.25 million) on a deal with Disney + Hotstar, India Today said in a report attributing the information to CREBACO. These companies have also hired prominent movie figures and cricketers for sponsorships. However, in May, the capital markets regulator, SEBI, asked celebrities to stop approving crypto products as they are regulated.
CREBACO estimates Indian cryptocurrency ad spend in the current financial year to be INR150 crore-180 crore ($ 18.8 million to $ 22.5 million).
Drop in trading volume
Among the main reasons why Indian cryptocurrency exchanges significantly reduced ad spend in 2022 is a sharp drop in trading volume which impacted the revenue of these exchanges and a stricter advertising policy for the cryptocurrency industry. .
After the government introduced a fixed 30% capital gains tax and 1% deduction at source (TDS), the trading volume of India’s major cryptocurrency exchanges dropped by more than 70%.
“If we compare what we have spent this year to date (January-July 2022) from the same period last year (January-July 2021), then there is an 88% drop in spending. Keep in mind that the spending was reduced in the second half of last year and was further reduced by the first quarter of 2022, ”WazirX said in a statement to India Today.
However, the decline in ad spend this year by crypto companies was a global phenomenon. For example, Crypto.com’s marketing costs dropped to $ 2.1 million in May 2022 from $ 15 million in November last year.
Strict ad guidelines
Another key reason for Indian crypto companies’ ad spend this year is the strict advertising guidelines issued by the Advertising Standards Council of India (ASCI) in February. In June, ASCI claimed that over 400 crypto ads violated its policies for virtual digital assets and influencer advertising between June and May. Out of 453 complaints, the majority were related to influencers, and 419 of these ads required changes.
“Some influencers talk so confidently about cryptocurrencies without fully understanding it. It creates the impression that it is safe, that it is okay and that it is interesting, ”ASCI CEO Manisha Kapoor quoted in a report.