Ads are an important strategy for any company or industry looking to grow. They have become the be-all-and-do-all for companies, and they’ve also become an important part of the growth channels for the social media and online marketplace behemoths.
Companies in the crypto space understand this, and they have been ramping up advertising efforts for years. With the market gaining significant exposure, advertising methods seem to have been yielding fruits. Thus, it should come as no surprise that crypto companies have doubled down on the strategy.
British Regulators Lead the Charge
However, this strategy seems to be coming under attack as governments seem to be cracking down on crypto ads. The United Kingdom has been perhaps the most significant culprit of this, with the country’s Advertising Standards Authority (ASA) bolstering its efforts to keep crypto ads at bay.
As the Financial Times reported, the ASA, which operates as an independent advertising regulator, plans to launch significant efforts to shut down “misleading” crypto ads. Miles Lockwood, the AA’s Director of Complaints, explained that the agency will target “irresponsible crypto ads” that are displayed on online and social media platforms.
Lockwood explained that they understand the priority of ads in shaping public opinion. So, where they find problems, they will crack down with authority. The regulator added that crypto ads had been identified as a “red alert” priority - even over ads for financial services.
The ASA will improve its capacity to track suspect crypto ads using online technology like artificial intelligence and scraping. The agency will also work with big tech platforms to take down scam crypto adverts, and it plans to issue warnings and require players to add disclaimers in their ads.
Days later, the U.K.’s Financial Conduct Authority (FCA) announced that it would create a digital marketing campaign that will focus on warning members of the public about the dangers of cryptocurrency investments. The campaign will include $15.2 million in funds, and it looks to build a more responsible crypto trading environment.
Speaking at a webinar titled “Our Role and Business Plan,” Nikhil Rathi, the FCA’s chief executive, revealed their plans to tackle “suspect crypto ads.” Detailing the FCA’s plan, Rathi explained that the agency is concerned about the growing adoption of crypto investments - especially among members of the younger generation.
Rati explained that many young people see investment as “entertainment,” and this behavior could induce them to take significant risks and lead to losses eventually.
“This is a category of consumer that we are not used to engaging with: 18 to 30-year-olds more likely to be drawn in by social media. That’s why we are creating an £11m digital marketing campaign to warn them of the risks,” Rathi said.
India’s Hard Stance on Crypto Moves to Ads
Beyond the United Kingdom, regulators in India have also turned on crypto businesses and their ads. Of course, India has never exactly been the most crypto-friendly country. However, this new stance takes its animosity for crypto to new heights.
While India seems to be looking towards banning digital assets, exchanges have still been able to operate. However, the Delhi High Court issued notices to local authorities and crypto firms to enforce operating guidelines for the latter and the ads they publish on national television.
According to a report from the New Indian Express, the court is seeking responses from the Securities and Exchange Board of India (SEBI) and the country’s Ministry of Information and Broadcasting. Response notices were also sent to exchanges like WazirX and CoinDCX.
The report explained that lawyers had urged the Delhi High Court to ask SEBI to issue guidelines concerning crypto ads. The guidelines will be focused on requiring these ads to include disclaimers that cover at least 80% of the screen, and a voiceover that will last no less than five seconds.
As the petitioners explained, several crypto ads on TV don’t include voiceovers that discuss the risks of crypto investments. The guidelines will hope to change that, ensuring that as include disclaimers that talk about crypto investment and its many risks.
TikTok Halts Crypto-Related Ads
Beyond just regulators, social media platforms have also clamped down on crypto ads. In July, the Financial Times also reported that TikTok had restricted the use of crypto-related ads on its platform.
As the article explained, TikTok had released new guidelines on its platform, confirming that it would inhibit users from posting promotional content about financial products. The guidelines would affect all TikTok users, regardless of their location.
TikTok was a significant source of hype for cryptocurrencies in 2020 - especially Dogecoin. Crypto-loving users had shared content to get others to jump on the crypto bandwagon, but the platform’s operators believe that this could be detrimental.
“My interpretation of this is [TikTok] are clamping down on directly or indirectly sponsored content which leads to an affiliate link, for example, to sign up to a trading platform and get free stocks,” an expert on the matter told the Financial Times.
The expert pointed out that much of the branded promotional content on TikTok was from poorly informed commentators, who lure their followers with the promise of riches. These followers eventually invest in coins that have no value and get burned in the process.
TikTok banning crypto ads just might be the trigger for social media platforms banning crypto content again.