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How Analysts Expect Crypto Sports Sponsorship Spend To Reach $5B In Less Than Five Years

Nielsen has been in existence for nearly a century, and is widely considered one of the most respectable names in data and market measurement, particularly around TV and media viewership and related areas. In Nielsen’s latest report, ‘Fans Are Changing The Game,’ the publicly-traded firm is forecasting the sports sponsorship pocketbook for blockchain and crypto firms to tally up to north of $5B by 2026.

Let’s take a look at this takeaway, and other main observations from Nielsen around crypto and blockchain firms.

Nielsen’s Sports Report: An Overview

The report splits into four pieces: consumer and behavioral shifts, their impacts on sponsorship models, their impacts on sports media and content distribution, and major takeaways for brands and sports rights holders.

Over-the-top (OTT) distribution (think Netflix, DAZN, Amazon Prime, etc.) and it’s societal adoption is the first callout from the report around consumer shifts. Relative to the general population, Gen Z consumers are more likely to be multi-tasking while watching sports, and fans are increasingly turning to social media platforms like Instagram, TikTok and Twitch for sports content. The report also found sports sponsorships to lie quite high on the scale of trusted advertising, with more trust instilled in these sponsorships than simple TV advertisements, online video ads, and social media ads. Furthermore, OTT distribution has helped sports grow to be “must watch” TV – despite many linear television outlets holding on to dear life to their sports output.

How are these societal shifts changing the way sports sponsorships come to life? Nielsen sees a clear correlation between visible sponsorship messaging and purchasing behavior, and now crypto firms are rapidly entering the space:

From the past two years of immense growth in the “crypto/blockchain/NFT” category, Nielsen projects strong performance in sponsorship spend to continue. The firm’s 2026 forecasts include single digit percentage growth for traditional sports sponsorship categories like automotive, retail, and energy sectors. Nielsen projects double digit percentage growth for the “IT software/hardware” category, and a massive 778% growth of the aforementioned blockchain category.

Somewhat surprising (but at the same time, not surprising) is Nielsen’s findings that esports fans are leading over sports fans and the general population of both awareness and interest in crypto tokens. This is surprising in part because of many vocal opponents of NFTs and crypto in the gaming and esports space. Nonetheless, it is easily the most technologically-forward thinking audience, so it shouldn’t surprise us too much to see this audience leading in both awareness and interest. Last year was a record-breaking year for esports sponsorship deals, and we saw FTX, Coinbase, and many other crypto-first firms get involved.

Another growth lever for blockchain technology in sport is what Neilsen describes as the “unbundling of women’s sports” – the idea of sponsorship packages in women’s sports being dedicated and no longer bundled with men’s sport. This will lead to more targeted opportunities in marketing and sponsorship – a prime example is the likes of Crypto.com and Voyager, solidifying deals with the National Women’s Soccer League (NWSL) in recent months. As Nielsen aptly notes, the women’s Super League viewership almost 6x’d from average match UK viewers from two years ago to last year… growth in women’s sport is real, and crypto firms will be present to engage with fans as these leagues grow.

Related Reading | Why The MIT Chose Ethereum’s PoS As 2022 Top Technological Breakthrough

Chiliz (CHZ) is one of the industry leaders in fan tokens, which stand to be well-positioned in the sports fan engagement landscape - but it remains to be seen the true potential of fan tokens, and if Chiliz can hit the spot. | Source: CHZ-USD on TradingView.com

Looking Ahead

How does sports sponsorship spending in crypto amass to a hefty $5B by 2026? Nielsen believes that legitimacy and fan engagement will be the two main pillars to ensure success. Analysts see teams and leagues due diligence as paramount, emphasizing this by driving home the point that in the “long term, it will be vital for organizations to properly vet sponsors and not let revenue impede due diligence.” Last year, we saw some clubs fail to due proper due-diligence on potential crypto partners, which – despite not being exclusive to crypto – delegitimizes the space given the amount of spam and scams that run through crypto.

Similar threads ring true when we talk about athlete engagement. We’ve seen brands like FTX sign on premiere athletes such as Steph Curry and Tom Brady, and Cash App’s crypto program utilized the likes of Odell Beckham Jr. last year, too. However, athletes have had a microscope on them – and talent at large have been susceptible to shilling and leaving bagholders abound. Nielsen finds that athletes “have a higher potential of being able to establish human connections with fans than leagues, teams and venues” – so it’s paramount that athletes continue to sign on with legitimate enterprises.

Lastly, more fragmented distribution, more ways to engage with sport, and other emerging trends are bound to fall in line with crypto – it’s merely a matter of time before we find better, more fan-friendly ways to integrate things like fan tokens into the market in a way that’s responsible and fan-first. Only time will tell on how well crypto firms execute.

Related Reading | Tribal Partners With Visa To Expand Its Offerings In Latin America

Featured image from Pexels, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

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