The celebrity hype machine collides with crypto hysteria. What could p

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Three decades ago, Spike Lee said, “It must be the shoes! As the iconic character of Mars Blackmon, Lee made Nike’s Air Jordan commercials a cultural phenomenon. The premise was simple: Michael Jordan, arguably the best basketball player of all time, used these shoes and put his name on them, so if they were good enough for him, they were definitely good enough for you.

Last week, Lee appeared in another ad, this time for a much lesser-known brand. The Oscar-winning director used his signature dolly photo for shill for Coin Cloud, a company that makes kiosks for buying and selling cryptocurrency. “Old money is not going to get us back; it pushes us down, ”he says. “The digital rebellion is here.

Lee isn’t the first celebrity to jump on the cryptocurrency bandwagon, far from it. Influencers like Kim Kardashian and Jake Paul have done paid social media ads; actors like Neal Patrick Harris and Alec Baldwin have appeared in commercials for Coinflip and eToro; and in recent years, Steven Seagal, Floyd Mayweather Jr. and DJ Khaled have been accused of promoting crypto without revealing that they were paid to do so.

The celebrity hype machine – especially around a still fledgling industry that is not well understood by mainstream customers – is reminiscent of the dot-com bubble, when celebrities like Anna Kournikova and Shaquille O’Neal fell for sites Web that quickly went bankrupt.

RA Farrokhnia, professor at Columbia Business School and executive director of Columbia Fintech Initiative, says crypto-based companies are at this intermediate stage, where the hype of early adopters has stabilized and they need to increase their awareness in order to maintain their momentum. “If crypto is to become a flagship product and offer a real alternative. . . it needs to reach a much larger audience, ”says Farrokhnia. “So it’s no surprise that we are starting to see that as the market matures within the universe of early adopters, they try to expand the market and create more demand for the product.”

Farrokhnia says using celebrities in ads is a proven model, but the complexity of crypto is changing things. “It’s very different from a celebrity endorsing an energy drink,” he says. “Two words – energy and drink – describe the whole product, and you’ve got the celebrity telling you why it’s better than Gatorade or whatever.”

Meanwhile, the complexity of crypto is not easily conveyed in an advertisement, hence Spike Lee bellowing: “Do your own research!” for Coin Cloud. This kind of oversimplification led to a backlash against Lee’s place. Some viewers questioned his claim that crypto is a financially liberating option for people of color. According to a 2021 study, the average owner of a cryptocurrency is a 38-year-old white male with an annual salary of $ 111,000. Right side up, Lee asks, “Where are the women, blacks, and people of color?” Yet Coin Cloud itself has been called in to be run by a team of all white male executives.

EH? Spike Lee did a “Diversity” ad for #CoinCloud, a company founded by all WHITE MEN with almost 100% WHITE male employees in all key positions and owners? They hired 1 African American for advertising marketing. twitter.com/eEhRT50xzo

– Daniel Newmaη (@DanielNewman) July 14, 2021

Cleve Mesidor, who heads the National Policy Network of Women of Color in Blockchain, warns prominent spokespersons against the hype. “Sadly, some black and brunette celebrities, athletes and personalities are making FOMO-led approvals [fear of missing out], but they don’t clearly understand how large, dynamic and complex this industry is, ”Mesidor said in an email to Fast Company. She points out that while women of color are the fastest growing demographic in the blockchain and cryptocurrency market, the crypto ecosystem has a problem with racial diversity and gender inclusion. similar to the traditional tech sector. The disparity is most glaring on the product development and investment side.

“To make it even more complex, even the crypto itself is not yet fully regulated,” says Farrokhnia. “It remains to be debated whether something is a title or not a title, and the final interpretation by regulators. . . will dictate how it might be marketed and advertised and what the rules are. This poses reputational risks for both the advertising companies and the celebrities who are a part of these campaigns. “

There are clear parallels between these new crypto announcements and the tech boom of the late 90s when suddenly the Super Bowl was full of announcements for startups with names like OurBeginning.com, Epidemic.com, Autotrader. com and, of course. , Pets.com — new brands using high-profile new technology that many viewers haven’t yet understood or even used. There was even an alternate currency (remember when Whoopi Goldberg appeared in an advertisement for Flooz?). She filed for bankruptcy in 2001.

Farrokhnia says these types of ads oversimplify the industry, and he also questions the marketing strategy of employing older celebrities like Baldwin or Lee to begin with. Unlike more modern approaches to celebrity brand partnerships, where there is a clearer connection than just a check with lots of zeros, this kind of crypto ad looks less like Ryan Reynolds’ Aviation Gin, and more like Tom Selleck. that is launching reverse mortgages. “Does the general population understand this product and this ecosystem? Or will Alec Baldwin or Spike Lee convince them to get involved anyway? Is Confidence Gained Through Using These Celebrities In Crypto? Farrokhnia asks. “It’s not Michael Jordan who sells basketball sneakers.”

Crypto-related brands that are considering using celebrities to gain trust from potential clients quickly would do better to take a look at how the Wealthsimple investing app has built a large loyal user base over the past few years. The brand invested in traditional advertising, but its main focus was less on hype and more on educating young investors about financial health and literacy. And when he dove into the celebrity spokesperson’s verse, it wasn’t a flashy movie star, but documentary filmmaker and Oscar winner Errol Morris directing spots that spoke real people about money. . It has also enabled big names like Anthony Bourdain, Rachel Bloom and Woody Harrelson to write candidly about their own financial education. The brand’s Executive Creative Director, Mike Giepert, told me at the time that it’s all about trying to create an environment where people can talk openly about money. “Whether it’s a celebrity or an ordinary person, it’s about sharing experiences, hopes and fears about money,” he said.

Cryptocurrency is clearly an area where mainstream consumers need more information provided in creative ways. Even Jackson Palmer, the creator of dogecoin, responded to the announcement by calling the currency he helped create and popularize “an inherently right-wing hyper-capitalist technology designed primarily to amplify the wealth of its supporters.” That’s not to say that crypto companies will start incorporating his rant, but it does highlight the contradictions and complexities inherent in the booming industry. All of these nuances are lost in the advertising of Lee and others like it, as is the opportunity to educate potential clients and get them excited about more than the hype.

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