Ad Spend by Indian Crypto Exchanges Decline by 89%: Report ⋆ ZyCrypto
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Advertising spending by India’s major crypto exchanges has fallen by nearly 89% in the first half of 2022 compared to the same period last year, says a report by India Today.
According to cryptocurrency data research firm Credit Rating for Exchanges Blockchains and Coin Offerings (CREBACO), India’s largest crypto exchanges spent more on advertising in 2021 in the second half of the year.
CoinDCX spent nearly INR 40 million (5 million) on Star Sports during the Indian Premier League in November 2021 and another INR 8-10 million ($1-1.25 million) to sponsor Bigg Boss on Viacom 18. CoinSwtich Kuber spent more than INR 10 million ($1.25 million) on the deal with Disney+Hotstar, India Today said in a report, citing data to CREBACO. These companies also roped in leading film personalities and cricketers for endorsements. However, in May, capital markets regulator SEBI asked celebrities to stop endorsing crypto products as they are regulated.
CREBACO estimates crypto advertising in India for the current fiscal year to be INR 150-180 million ($18.8-22.5 million).
Decrease in trading volume
One of the main reasons why Indian crypto exchanges significantly reduced their advertising spend in 2022 is the sharp decline in trading volume, which affects the income of these exchanges, and the stricter advertising policy of the crypto sector.
After the government introduced a flat 30% capital gains tax and 1% tax deducted at source (TDS), the trading volume of major crypto exchanges in India fell by more than 70%.
“If we compare our expenses this year to date (January-July 2022) to the same period last year (January-July 2021), there is an 88 percent decrease. Please note that spending was reduced in the second half of last year and has been cut further after the first quarter of 2022,” WazirX said in a statement to India Today.
However, the decrease in the current year’s advertising expenses of crypto companies has been a worldwide phenomenon. For example, Crypto.com’s marketing costs fell to $2.1 million in May 2022 from $15 million in November last year.
Strict advertising guidelines
Another key reason for Indian crypto companies’ advertising spending this year is the strict advertising guidelines issued by the Advertising Standards Council of India (ASCI) in February. In June, ASCI said more than 400 crypto ads violated its policies on virtual digital assets and influencer advertising between June and May. Of the 453 complaints, the majority concerned influencers, and 419 of these notifications required changes.
“Some influencers talk so confidently about crypto without fully understanding it. It creates the impression that it’s safe, it’s all cool and cool,” ASCI CEO Manisha Kapoor was quoted as saying by The Economic Times in a report.