Founded nearly a century ago, Nielsen is widely regarded as one of the most respected companies in the data and market measurement space, particularly in the area of TV and media ratings and related areas. In Nielsen's latest report, "Fans Are Changing the Game," the publicly traded company predicts that sports sponsorship wallets from blockchain and cryptocurrency companies will reach more than $5B by 2026.

Let's look at this bullet point, as well as other key observations from Nielsen on cryptocurrency and blockchain companies.

Nielsen's Sports Report: Overview

The report is divided into four sections: consumer and behavioral shifts, their impact on sponsorship models, their impact on sports media and content distribution, and key takeaways for brands and sports rights holders.

OTT distribution (think Netflix, DAZN, Amazon Prime, etc.) and its social adoption are the first markers in the report around consumer shifts. Generation Z consumers are more likely to multitask while watching sports events than the general population, and fans are increasingly turning to social media platforms like Instagram, TikTok and Twitch for sports content. The report also found that sports sponsorships occupy a fairly high position in terms of the size of trusted advertising, compared to simple TV ads, online video ads and social media ads. In addition, OTT distribution has helped sports become "must-see" TV programming – even though many linear TV outlets ignore their sports content.

How are these social changes changing the way sports sponsorship is done? Nielsen found a clear correlation between visible sponsorship messages and buying behavior, and now cryptocurrency companies are rapidly moving into the space:.

Screen-Shot-2022-02-28-at-3.11.20-PM-640x331.png.webp

Based on the tremendous growth in the "cryptocurrency/blockchain/NFT" category over the past two years, Nielsen expects sponsorship spending to continue its strong performance. The firm's forecast for 2026 includes single-digit percentage growth in traditional sports sponsorship categories such as automotive, retail and energy. Nielsen expects double-digit percentage growth in the "IT software/hardware" category, with the aforementioned blockchain category growing by a whopping 778 percent.

Nielsen's findings are somewhat surprising (but at the same time not surprising) in that eSports fans are ahead of sports fans and the general population in terms of awareness of and interest in cryptocurrency tokens. This is surprising, in part, because there is a lot of opposition to NFT and cryptocurrencies in the gaming and eSports space. That said, it is easily the most tech-forward audience, so we shouldn't be too surprised to see this audience leading the way in terms of both awareness and interest. Last year was a record year for eSports sponsorship deals, and we saw FTX, Coinbase, and many other cryptocurrency-first companies get involved.

Another growth lever for blockchain technology in sports is what Nielsen describes as the "unbundling of women's sports" – the idea that women's sports sponsorship packages are specialized and no longer tied to men's sports. This will lead to more targeted marketing and sponsorship opportunities – a prime example being companies like Crypto.com and Voyager, which have solidified deals with the National Women's Soccer League (NWSL) in recent months. As Nielsen aptly points out, from two years ago to last year, the Women's Super League's viewership was almost six times the average UK match attendance …… The growth in women's sport is real, and as these leagues grow, cryptocurrency companies will engage with fans.

Related Reading | Why MIT Chose Ether's PoS as a Top Technology Breakthrough for 2022

Screen-Shot-2022-02-28-at-8.13.21-PM-640x331.png.webp

Chiliz (CHZ) is one of the industry leaders in fan tokens and is well positioned in the sports fan engagement space – but the true potential of fan tokens remains to be seen, and whether Chiliz will succeed. | Source: CHZ-USD Looking Ahead on TradingView.com

How to reach $5B in cryptocurrency spending on sports sponsorships by 2026 Nielsen believes that legitimacy and fan engagement will be the two pillars to ensure success. The analyst believes team and league due diligence is paramount, and by emphasizing this, "in the long run, organizations must properly vet sponsors and not let revenue get in the way of due diligence." Last year, we saw a number of clubs fail to conduct proper due diligence on potential cryptocurrency partners, and while these partners are not unique to cryptocurrency, it delegitimizes the space given the amount of spam and scams running through cryptocurrency.

When we talk about athlete engagement, similar threads are true. We've seen brands like FTX sign premier athletes like Steph Curry and Tom Brady, and Cash App's cryptocurrency program used the likes of Odell Beckham Jr. last year. However, athletes have had them microscopically examined – the entire talent is susceptible to the shilling and leaves bags abound. Nielsen found that athletes are "more likely to build relationships with fans than leagues, teams and arenas" – so it's critical that athletes continue to sign with legitimate businesses.

Finally, more decentralized distribution, more ways to participate in sports, and other emerging trends will inevitably align with cryptocurrency technology – it's only a matter of time before we find better, friendlier ways to integrate things like fan tokens into cryptocurrencies. Market in a responsible and fan-first way. Only time will tell how well cryptocurrency companies will execute.

Related Reading | Tribal and Visa Partner to Expand Their Services in Latin America

Featured image from Pexels, K-line chart from TradingView.com The author of this content is not affiliated or associated with any party mentioned in this article. This is not financial advice.