For Crypto Publishers, Boom and Bust Are Two Sides of the Same Coin

Over the last two years, as the value of the cryptocurrency market reached dizzying new heights, publishers that covered the industry shared briefly in its wealth, with exchanges like Coinbase, Crypto.com and FTX spending lavishly on advertising to acquire new customers. But since April, declining adoption and waning consumer trust in the technology have led to a steep downturn in marketing spend, forcing publishers such as CoinDesk, Decrypt, The Block and others to adapt to a far less hospitable economic landscape. Like many trade publications, the health of these publishers is inextricably tied to that of the industry they cover—a downturn in promotional spend from one can mean a downturn in advertising revenue for the other. And in the third quarter of this year, the top cryptocurrency advertisers spent just $35 million on ads—an 80% decline from the first quarter, according to MediaRadar. Inside the Cryptocurrency Revolution With OKX But the dynamic is more nuanced than a simple dip. Compounding the pullback in spend, a lack of regulation in the industry, combined with the sheer volume of capital moving through the space, has made unwitting bedfellows of the two parties. In December, Axios reported that the cryptocurrency publisher The Block had been surreptitiously financed by the exchange FTX. Likewise, the news publisher Semafor has faced scrutiny due to the investment it received from its founder, Sam Bankman-Fried, earlier this year. But the tumult of the industry, including the collapse of FTX, has created a surge of interest in the subject, placing the publishers covering the space squarely in the national spotlight. For CoinDesk, which broke the story of the disgraced Bankman-Fried, the exposé shattered its traffic records, reaching 17 million readers in November—a 96% month-over-month increase and the highest month of traffic in its nine-year history, according to chief content officer Michael Casey. The result is a complex relationship between cryptocurrency companies and the publishers that report on them, a dynamic that underscores not just universal axioms of the media business—such as the value of a diversified business model—but the singular challenges of covering decentralized finance. In an industry defined by cycles of boom and bust, the current cryptocurrency winter comes as little surprise to veterans of the field, said Rachel Pasqua, principal at Prohaska Consulting. “Publishers will take a hit for sure, but a temporary one, and this space is not going anywhere,” Pasqua said. “There’s still a lot of money flowing into this space—a dip in ad spend is inevitable after FTX, but it’s a blip.” But for the publishers that cover the space, the exodus of advertising revenue amid an influx of attention—itself the result of accountability journalism in some instances financed by the companies themselves—serves as a stark example of its capacity for paradox. As traffic rises, advertising spend plummets Traffic to cryptocurrency publishers tends to follow intrigue in the space, regardless of the performance of the currencies themselves, said Andrew Nusca, the executive editor of the recently shuttered Incrypto newsletter, a casualty of the recent cuts at Morning Brew. “Readers are engaged whether the market is high or low,” Nusca said. “The only problem is when crypto does nothing, when it’s boring.” As a result, the recent FTX scandal and its ensuing fallout has led to a substantial uptick in traffic across the ecosystem. At CoinDesk, two of its three most-popular months in 2022, October and November, followed the meltdown, according to data from measurement firm Comscore. And at Decrypt and The Block, readership in October increased 43% and 58% month over month, respectively, according to Similarweb. Still, the upticks in readership come as cryptocurrency companies slash their advertising budgets. Crypto.com cut its ad spend from $16.2 million in the first quarter to $1.6 million in the third, according to data collected by SensorTower for CNBC. Gemini, the exchange owned by the Winklevoss twins, reduced its online ad spend from $8.5 million to $2,500 across the same time period. And the publicly traded Coinbase reduced its sales and marketing expenses 46% in the third quarter. This pullback leaves the publishers with fewer sources of premium demand, leaving their bottom lines vulnerable at a time in which their reporting is most critical, according to Casey. “It is a juxtaposition of our proudest moment as journalists, while at the same time the industry that we cover is going through this very big reckoning,” Casey said. “It is definitely a period of real introspection.” In response, publishers retreat to the core and diversify The reduction in marketing spend from prominent advertisers is particularly painful given the publishers’ heavy reliance on advertising. Decrypt generates the majority of revenue through advertising, though it began diversifying its income mix with NFT drops last year. CoinDesk also generates revenue primarily through digital advertising and its Consensus conference in Austin, but it has begun exploring supplemental lines of business, including a potential membership model based around its social token, DESK, according to Casey. The heightened competition for a dwindling purse offers another compelling motivation for publishers to diversify, said Kate Scott-Dawkins, the vice president of thought leadership and innovation at GroupM—both in their business models and coverage. “If companies are focused solely on the crypto field, it is very possible that they are seeing a decline in revenue,” Scott-Dawkins said. “Certainly any publisher focused on any one vertical or category would be vulnerable.”

Emerging Technologies

For Crypto Publishers, Boom and Bust Are Two Sides of the Same Coin

Chaos in the sector has led to an influx of eyeballs but an exodus of ad spend

Mark Stenberg

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Mark Stenberg