Companies that have Banned Crypto Ads
Cryptocurrency advertising from more and more blockchain startups saw a backlash and a ban from companies in 2018, but the news wasn’t all bad. Some argue it’s actually going to help legitimize the cryptocurrency market. This is a rapidly evolving industry and to understand how we got to the ban, we will take a few steps back and explore the beginnings of cryptocurrency and ads.
What Is Cryptocurrency?
Cryptocurrency trading had its beginnings in the 1990’s tech boom, but it wasn’t until 2009 and the introduction of the Bitcoin that this phenomenon really took off. Cryptocurrency simply means “digital currency” or a digital medium of exchange. In a world where so much of what we do happens digitally—the way we communicate, the way we advertise, the way we seek and share information—it was only a matter of time before currency came into play. In addition to working as a medium of exchange, cryptocurrency trading offers a way to verify and secure transactions and it controls the creation of new units of currency.
When Satoshi Nakamoto (an alias used to represent an anonymous programmer) created Bitcoin, the problematic third party involved in previous digital currency systems was removed. The earlier systems relied on a central server to keep checks and balances. This third party controlled the user funds, and fraudulent “double spending” was a constant risk in cryptocurrency. With Bitcoin, every single user participates in the checks and balances of the system. This system is basically a massive spreadsheet with built-in cryptography. Blockchain is the name given to what is essentially a “public ledger” in Bitcoin and other digital currencies—every transaction within the network is available for everyone to see.
Thanks to the ways that Bitcoin revolutionized the industry, cryptocurrency took giant leaps forward and can now be used more commonly to buy goods as well as make investments (though it should be noted here that cryptocurrency is still generally viewed as a volatile and high-risk investment).
Crypto Ads: Why are Some Companies Banning Them?
Cryptocurrency advertisements have, like many other advertisements for other products and services, moved quickly into the social media sphere. Advertisers know this is one of the most effective ways to reach a wide audience. However, there are myriad regulations and background programs playing into how these ad spaces are managed and controlled. Google Adwords, for example, changed the advertising landscape for everyone with competition to get your business’ products and services to the top by meeting certain parameters, and ads on platforms such as Facebook and Instagram are also tied into certain programs and formulas that control who sees your content and when. Because these sites are constantly looking to improve user experience and overall buy-in, they are vigilant about advertising policies and took a firm stance on cryptocurrency ads in 2018.
Cryptocurrency is still seen as a volatile and high-risk investment and Google and Facebook both announced recently they would ban cryptocurrency advertising. Because cryptocurrency is still in its infancy as an industry, it remains a challenge to separate the scammers from the legitimate opportunities. Additionally, the lack of consistent regulation makes it problematic as well.
Some advertisers of cryptocurrency and Initial Coin Offerings (ICOs) have taken a less than savory approach with ads designed to grab attention but are perhaps less than honest. (What does a bikini have to do with an Initial Coin Offerings anyway?) The bottom line is giants like Google and Facebook said no to this for a variety of reasons (both stated and implied). However, many argue that the ban won’t last once the cryptocurrency industry matures, settles, and is more regulated. Some might say these are normal growing pains for any new industry and even others argue the ban is ultimately GOOD for the future of cryptocurrency.
The Crypto Ad Ban: Pros and Cons
In addition to the giants like Google and Facebook, other big players have also banned cryptocurrency advertising, including Twitter, Reddit, Snap, and MailChimp. Cryptocurrency companies and ICOs are essentially getting blocked out of the digital advertising world (ironically as theirs is a digital product). But there are ways around this: some reputable firms are simply succeeding with good old-fashioned word-of-mouth advertising and even feel that the ban could serve them well in the long run. If the ban weeds out the bad apples, the people who are simply trying to make a quick buck off this phenomenon even if it means scamming investors, then the long-term benefit is that the industry is legitimized by the remaining players who are attracting and retaining the right investors—and who are above board with their practices and willing to take part in a constructive dialogue about regulations in the industry.
It remains problematic for many, however, that these sites do not ban other misleading or potentially fraudulent ads. (Perhaps for a “miracle pill” that will cause you to lose 20 pounds overnight or a cream that will eliminate cellulite 30 seconds after application.) The ban seems unfair to many in this regard. Yet the cryptocurrency companies who stay the course and find ways to mitigate the effects of the ban could ultimately not only survive but thrive and they may find themselves re-engaged with all social media platforms in the future.
The Bottom Line
By taking this stance on cryptocurrency advertising, Facebook, Google, and others are ultimately acting as “responsible and ethical corporate citizens.” (Even if some might argue they are not doing it consistently with other products and industries.) They do not want to be associated with an unregulated industry or seen to promote investment activity that could a scam or illegal.
On the other hand, the Blockchain technology that is fueling the cryptocurrency industry is being explored by all tech giants and it is not only plausible but likely that when these growing pains pass, we will see a time when cryptocurrency is welcomed into that fold.