As NBC News reports, the company reached a $32 billion valuation and became the popular face of its business sector due to its “voluminous” marketing and advertising.
Fast Company calls the collapse a “harsh lesson” in marketing hype. FTX’s Super Bowl commercial showing Larry David casting a doubtful eye on important historical innovations—including, of course, FTX—was celebrated for its humor. Now, ironically, it looks as if David was right to be skeptical all along.
Elizabeth Paul, chief strategy officer at The Martin Agency, which worked with still-standing FTX rival Coinbase in 2021, suggested to Fast Company that marketers need to use their storytelling powers for the good of all stakeholders, or else risk diluting their own effectiveness. Paul cited a 2021 study finding that consumers have more faith in brands to effect positive social change than government or religious institutions.
As AdWeek reports, the Miami Heat have had to remove FTX’s logo from its arena. The University of California had to do the same for its football stadium, ending what was meant to be a 10-year, $17.5 million deal. The Heat’s naming-rights deal was reportedly $135 million.
FTX also inked agreements with Mercedes’ F1 team and MLB. Among its celebrity endorsers were Tom Brady, Gisele Bündchen, Shaquille O’Neal, Naomi Osaka, Shohei Ohtani, Stephen Curry, and Trevor Lawrence. As The Marketing Arm senior vice president Megan McMahon told AdWeek, FTX’s demise will probably prompt celebrities to ask more questions before endorsing unfamiliar technologies.
As Decrypt reports, FTX paid out a whopping $375 million in sports marketing en route to bankruptcy.
AdAge notes that the collapse of Enron in 2001 forced the Houston Astros to fight their way out of a naming rights deal in bankruptcy court. In that and other cases when sports teams’ sponsors went out of business, new companies soon stepped up to pay for naming rights. Amid “crypto winter,” it remains to be seen who will fill the void left by FTX’s fizzled spending splurge.
