The $40 Billion Company That Won Super Bowl Sunday

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Hey Friends,

The Los Angeles Rams won the Super Bowl on Sunday, and wide receiver Cooper Kupp was named MVP after his 92-yard, 2-TD effort against the Cincinnati Bengals.

But crypto dominated everything outside of the actual game itself.

Companies like FTX, Coinbase, eToro, Crypto.com, and others collectively spent nearly $50 million on just a few minutes of ad space, and most of them also ended up giving away millions of dollars in free Bitcoin on Twitter.

We could spend some time debating which advert was the best, but I think it’s probably better to just run through the actual results that these campaigns yielded.

So let’s start with FTX.

FTX is one of the world’s most popular crypto exchanges, reaching a $32 billion valuation in less than three years, and they put together an incredible commercial.

The company hired Larry David for the 60-second spot, who plays a time-traveling skeptic that scoffs at inventions like the wheel, forks, a toilet, lightbulb, and portable music players.

And it ends with someone eventually trying to interest him in crypto, and Larry David saying, “Nah, I don’t think so,” and “I’m never wrong about this stuff. Ever.”

It had a good mix of creativity, entertainment, and star-power, while also shining a pretty positive light on the crypto industry in general, not just FTX specifically.

You can watch the extended cut version here.

But the FTX team also intelligently timed it up with a giveaway on Twitter.

They offered up 7.54 Bitcoin (~$340k), and the only requirements to enter were watching the advertisement, retweeting the tweet, and following them on Twitter.

The results were insane:

• 185k Retweets

• 100k Likes

• 2.5M Views

But here’s the craziest part — the FTX Twitter account gained nearly 200k followers over the weekend, a 52% jump in followers for an already three-year-old account.

In total, including the cost of air-time, production, talent, Bitcoin, and more, the Super Bowl advertising campaign probably cost FTX between $15 million to $20 million.

But for a company that has accrued over $31 million of enterprise value every day over the last three years—going from a $0 valuation in 2019 to $32 billion today—that certainly seems like a drop in the bucket for some solid growth and good publicity.

Yet, I still think Coinbase was probably the biggest winner on Sunday.

The $45 billion publicly-traded crypto exchange had one of the most-creative Super Bowl ads I have ever seen, or least-creative, depending on how you look at it.

The 60-second advertisement cost the company about $14 million, but it didn’t include a company logo, product pitch, or even a CTA.

It was simply a color-changing QR code that bounced around the screen.

Of course, the website crashed almost immediately, adding to the narrative within the crypto community that Coinbase constantly crashes when it’s needed the most.

But that just meant that the advertisement worked.

Coinbase says that they had more than 20 million hits on their landing page in just one minute—about 333k per second—and that it was the most traffic their website had ever encountered.

Oh yeah, their app also went from 186th in the app store to 2nd overnight.

And here’s some back-of-the-napkin math to determine the value of the advertisement.

• Coinbase paid about $14 million for the 60-seconds of air time

• They gave away $15 in free Bitcoin to anyone that created an account

• We’ll say that the production cost was negligible given it was just a QR code

That means they reached ~100 million people for $14 million, or 14 cents per viewer.

Now the unfortunate part is that Coinbase doesn’t disclose its churn, customer acquisition cost, or lifetime value, but since most estimates put the LTV of a Coinbase customer in the $300-plus range, we’ll use that (I think it’s probably higher).

So if we say a customer is worth about $285 to Coinbase ($300 LTV minus $15 CAC from giveaway), that means they need to convert about 49,000 people into customers.

And at ~100 million viewers, that’s a conversion rate of 0.04%.

There is nuance to my math, of course. Coinbase earned millions of impressions on social media before, during, and after the ad, and they still need an attractive LTV:CAC ratio to make their unit economics work — they aren’t just trying to break even!

Still, I think it’s a fascinating case study that covers a wide range of business topics.

But while some companies spent millions of dollars on production and hired the world’s most famous actors, Coinbase proved that they can still win through quirky, creative, and less sophisticated production.

I hope everyone has a great day. I’ll talk to you tomorrow.

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