Why Coinbase never stopped advertising

Don’t look now, but bitcoin is back.

The cryptocurrency is hovering around $65,000, returning to its 2021 heights. Shortly after that previous high-water mark, crypto companies started flooding the airwaves in the US, spending a combined $223 million on TV ads in the first three quarters of 2022, according to MediaRadar.

We all know what happened next: FTX, one of the largest crypto exchanges in the world, collapsed in November 2022, taking most of the industry’s ad dollars with it. Crypto companies spent 186% less on ads in Q4 2022 than in Q1 2022, according to data provided by iSpot. The evaporation of ad spend was stark enough that CNBC reported that the pullback could leave “budget holes” across the industry.

Now that bitcoin is back to peak levels, will the pre-bust levels of ad spend return, too? At the crypto exchange platform Coinbase, spending on ads never stopped entirely, despite the industry’s volatility, Kate Rouch, Coinbase’s chief marketing officer, said. The company continued to invest in TV ads, and it appears to have weathered the storm of the recent downturn.

“Crypto is hard to predict,” she said—perhaps the understatement of the century.

Magic money

Rouch joined Coinbase in summer 2021, a few months after the company went public. She came to Coinbase after working at Meta for a decade, where she most recently led brand and product marketing. At that time, there was “a bit of a land grab going on” in the crypto space, Tim Calkins, associate chair of the marketing department at Northwestern University’s Kellogg School of Management, said.

“Everybody was scrambling to build their brand and to try to establish themselves as a leader in this space,” he told Marketing Brew.

Coinbase certainly appeared to be doing the same, partnering with the NBA to become the league’s “exclusive cryptocurrency platform partner” in a deal reportedly worth $192 million, while FTX and Crypto.com plastered their names on sports arenas. During the 2022 Super Bowl, while other crypto brands leaned on celebrity cameos, Coinbase aired its first ever national campaign—a 60-second spot featuring a QR code that bobbed in silence across the television screen.

“We were coming into this environment where there was a lot of noise, a lot of other crypto companies advertising, a lot of interest in the space,” Rouch said.

In other words, Coinbase wanted to zig while others zagged. It appeared to work: More than 11.7 million people visited the website from the QR code, and the company reported a 24% conversion rate to sign-ups, or about 2.8 million accounts.

By the time the ad aired in February 2022, however, bitcoin was down 41% from its November 2021 highs, and a few months later, Coinbase would begin the first of a few rounds of layoffs,and by the summer of 2023, Coinbase CEO Brian Armstrong told investors that the company’s quarterly recurring operating expenses, including marketing and sales, had dropped by close to 50%.

That didn’t mean disappearing from the airwaves entirely, though. Coinbase was one of the only major crypto exchanges to run television ads in 2023. In all, Coinbase spent close to $10 million on television ads in 2023, iSpot estimated. Coinbase spokesperson Jaclyn Sales told Marketing Brew that the figure is “about correct.”

While that’s still shy of the nearly $38 million iSpot estimates the company spent in 2022, other brands like Crypto.com and Binance spent nothing on TV last year, while Robinhood, which lets traders invest in traditional stocks and cryptocurrencies, hasn’t advertised any crypto-specific products or services, per iSpot. (For reference, Crypto.com and FTX (RIP) spent nearly $63 million and $56 million on TV ads in 2022, respectively, according to iSpot, each more than 40% more than Coinbase did.)

“You saw us in the bull, and you’re seeing us in the bear,” Rouch said.

The recent surge in bitcoin prices, partially credited to the introduction of bitcoin ETFs, which have given more traditional investors exposure to crypto, won’t shift Coinbase’s strategy much, either, according to Rouch.

“Our vision isn’t specific to a run or anything short-term,” Rouch said.

Update the system

What is Rouch’s vision for Coinbase’s marketing? “At the highest level, we have a job to help people understand why crypto matters,” she told us. In practice, that means many Coinbase ads question the efficiencies of the traditional financial system, as one might expect from a crypto company. The brand’s “Update the System” campaign, which rolled out in 2023, suggests that consumers “deserve better” than credit-card minimums and overdraft fees.

The spots can be tongue-in-cheek. During what Rouch said was the “nadir of the bear market, where the sort of consensus view in the mainstream was, crypto is imploding, crypto is dead,” Coinbase poked fun at crypto’s naysayers in a spot called “Long Live Crypto.” In the ad, the company referenced crypto believers’ tendency to track and record every time a mainstream source of news or analysis declares crypto dead—part of a strategy of reflecting “very internet-native sources” back to audiences, Rouch said.

Coinbase’s move to keep on keepin’ on through crypto’s highs and lows follows general marketing wisdom: It’s generally “not optimal to spend a ton of money, cut back to nothing, and then spend a ton of money again,” Calkins said. “That is a super inefficient way to deploy a marketing budget.”

With a tighter budget, Coinbase has also turned to stuntier campaigns. A campaign promoting stablecoins—a cryptocurrency that is tied to another asset, like the US dollar—features Abraham Lincoln on the face of a penny, humiliated by his irrelevance.

As part of the campaign, Coinbase invited users to mint an NFT penny that could be exchanged for free swag. In all, 172,000 NFTs were minted, Rouch told us. (It should be noted that this is the first time this reporter has heard the phrase NFT used earnestly in several years.) Coinbase has the ability to engage with those who minted the NFTs, , Rouch said, another potential avenue of communication with crypto-curious consumers.

And just last month, the company bid on and won an opportunity to advertise on cases of Liquid Death, a canned-water brand that’s on a victory lap of its own after receiving a valuation of over $1.4 billion. Coinbase let followers mint NFTs of potential ads, with the most-minted one becoming the ad that will be slapped on the side of the cases.

That’s another intentional move from Rouch to ensure Coinbase ads direct users to use its platform. “I will never do another campaign without an on-chain component, no matter what other brand I’m working for,” she said.

According to a February 2023 survey commissioned by Coinbase and conducted by Morning Consult, roughly one in five Americans have used crypto, Rouch told us.

“When I say our core audience, I’m not talking about 20 hooded, shadowy supercoders in their basement,” she said.

Run with it

With soaring crypto prices, Calkins said he expects to see “most likely, a huge increase in spending” from the crypto players. If advertising spend does come back swinging in the sector, though, it might not be 2021 all over again.

“There’s a lot less players,” Citi Wall Street analyst Peter Christiansen, who tracks Coinbase, said. At Coinbase in particular, “I would expect them to increase their ad spend and their performance marketing spend now that we’re at these token levels, because the return on investment is just so much better,” he told us.

Rouch said there are no “immediate plans” for the company to up its ad spend, but, never say never. “If the market keeps going, those are obviously conversations that we will have,” she said.

As the 2024 elections draw closer, there’s also the question of whether Coinbase will wade into policy marketing, especially amid some regulatory hurdles for the exchange. In 2022, Coinbase petitioned the Securities and Exchange Commission (SEC) for “regulatory clarity,” which was later denied. In between, the SEC sued Coinbase, accusing it of “operating as an unregistered securities exchange, broker, and clearing agency.”

Coinbase has since challenged the commission's petition denial, “accusing the agency of behaving arbitrarily and capriciously in its refusal to tailor rules to clarify oversight of the industry;” in a recent court argument, a lawyer for the company compared buying crypto to buying Beanie Babies.

The company also spent $2.9 million in lobbying efforts last year, according to Politico.

Rouch didn’t say whether regulatory challenges are affecting the brand’s ad strategy, but noted that there are “millions of Americans who are single-issue voters on crypto, and this is an important election for the industry.”

“We’re here to help our community advocate on their own behalf and their own interests,” she said.