A new user is worth $50? The covert battle for growth among crypto exchanges

Original article by Odaily Planet Daily

Author: Golem

Late at night, after a long day of crypto trading, you lie exhausted in bed and open Tinder, ready to find a stranger for a wonderful date. Suddenly, an ad for a crypto exchange pops up, proclaiming, "Earn xxx USDT reward for your first transaction!" You sigh inwardly, thinking how disappointing. Unable to sleep, you open a video website to watch an episode of your favorite American drama, only to be interrupted by a 15-second ad—not for a casino, but for a crypto exchange. At this point, you finally snap and yell, "F**k you, crypto!"

Crypto exchanges are infiltrating the daily lives of ordinary people through advertising, and behind this lies the growth ambition of CEXs.

According to Binance's official disclosure, its global registered users exceeded 250 million by the end of 2024, an increase of approximately 47% compared to 2023. While this achievement is impressive, it also means that for top exchanges, the industry's capacity to provide new users is nearing saturation. To acquire new users, they must proactively stimulate consumer demand beyond crypto and extend their customer acquisition reach to Web2.

Who is secretly advertising to us?

To satisfy the exchange's ambitions, the company that puts ads into the corners of our cyber life is a little-known growth department—Paid ads.

“Within the exchange, we are a department parallel to BD, both responsible for user growth, except that we reach users through paid advertising,” Hamburger (pseudonym), who works in Paid ads at an exchange, told Odaily.

Traditional crypto users primarily interact with exchange business development (BD) professionals. These professionals not only connect with B-end project teams but also deeply engage with C-end communities, maintaining strong relationships with KOLs, website administrators, and referral commission leaders. Sometimes, they even act as customer service representatives, resolving issues for ordinary users. Some BD professionals from large exchanges also develop into KOLs, leveraging their personal influence to boost user growth.

However, as user growth in the industry has hit a bottleneck, the role of business development (BD) has become increasingly limited. Reaching new users is becoming more and more difficult, so maintaining existing customer relationships and poaching customers from competitors through differentiated strategies have become the daily routine for BD professionals.

Therefore, when conventional user growth methods were nearing failure, Paid ads became a lifeline for exchanges to increase their user base.

The goal of Paid ads is to acquire qualified traffic or users (installs, registrations, conversions, leads) through paid channels at the lowest/optimal cost and to translate campaign performance into measurable business growth.

“We will purchase advertising space and display positions on media platforms such as the Apple Store, Google, TikTok and Facebook, and bring some new users to our exchange based on the media platforms’ algorithms and audience targeting,” Hamburger explained.

Different growth strategies also determine team size. According to Hamburg, although Paid ads and BD are parallel departments, there is a significant difference in the number of people involved. "For example, at our exchange, there are no more than 20 colleagues worldwide working on Paid ads."

Although the team is small, it's more than enough. Paid advertising is divided into self-placement and outsourced placement. Self-placement means the exchange's Paid Ads team collaborates with media platforms, uploading materials, setting up ads, monitoring performance, and making real-time adjustments. Outsourced placement means entrusting the placement work to an advertising agency. This model can meet the needs of a small team but a large number of platforms.

Paid ads are not a new concept in the exchange sector; they have only seen large-scale investment in the past few years. According to sources, Binance began experimenting with Paid ads in 2021-2022, but didn't invest heavily until 2024, while OKX entered the field even earlier than Binance.

“Mid-sized exchanges typically have an annual budget of around $2 million for paid ads, while large exchanges spend even more,” Hamburger told Odaily, explaining the exchange’s budget for paid advertising. However, he declined to disclose his own exchange’s annual budget for confidentiality reasons.

However, compared to the paid advertising budgets of Web2 giants, the investment of cryptocurrency exchanges is negligible. According to public data, Google's advertising budget in 2025 is approximately $8.7 billion, while Amazon's advertising budget is $31 billion, and Netflix's advertising spending in 2024 exceeded $1.7 billion.

While there is a gap in profitability, this also indicates that the user growth model of Paid ads for CEXs is still in its early stages and has not yet matured. "Theoretically, top-tier exchanges have a huge demand for Paid ads, and as long as the results are good enough, the budget can be unlimited," Hamburger said confidently.

Ideally, $50 would get you a new user.

According to Hamburg, their current advertising campaigns are indeed effective in attracting new users. One advantage of Paid Ads compared to Business Development (BD) is the ability to clearly calculate ROI (Return on Investment, a measure of net profit generated from every dollar invested). This allows for the evaluation of advertising effectiveness across different media platforms. For example, the younger the user demographic on a platform and the higher their acceptance of encryption, the better the advertising results.

“A typical example is the Apple App Store, where advertising is more effective, while advertising to mobile phone manufacturers is less effective,” Hamburger said. “However, taking major media platforms as an example, in terms of conversion rates, achieving $50 per new user is already considered a good result.”

While this may sound costly, Hamburger explained that from an ROI perspective, a $1 million budget would allow for a positive ROI in a maximum of six months.

Meanwhile, the effectiveness of ad placement is also related to the ad creative. Generally speaking, ads targeting new users will use incentives such as first-transaction rewards. In addition, Hamburger said that ads promoting the advantages of cryptocurrencies and the historical investment returns of Bitcoin are also more likely to attract external users.

Regulation remains the main obstacle to the development of cryptocurrency pay ads.

At the end of 2024, I was taking a taxi in Beijing and passed by the Liaoning Building. My friend pointed at it and said, "If you were doing Web2 advertising 10 years ago and hadn't been to this building, you weren't really in the industry." My friend was describing a golden age for Web2 advertising, but 10 years later, the spring for Web3 advertising has still not arrived.

"Due to restrictions imposed by different countries and policies, some major media platforms are still resisting advertising on Web3," Hamburger told Odaily. For example, countries and regions such as the United States, Hong Kong, the United Kingdom, and Canada have explicitly banned unqualified exchanges from advertising. Furthermore, the policy restrictions vary depending on the exchange's product; some exchanges may allow advertising on spot trading but not on futures or stablecoin investments. Some exchanges may use misleading materials to deceive audits, but this is extremely risky.

However, there are also countries and regions that are more friendly to encrypted advertising, such as South Korea, Vietnam and Turkey, where the regulations are relatively relaxed and the consumption of advertising spending is also relatively large.

Globally, however, regulators remain cautious about exchange advertising, which is a major reason why exchange advertising spending cannot compare with that of Web2 companies.

The biggest problem with Web3 is that there aren't enough experienced users and not enough new users.

Despite the current situation, Hamburg remains confident about the future prospects of advertising on exchanges. "The biggest problem for Web3 is still user growth," Hamburg believes, adding that leading exchanges in the crypto industry have both the need and the responsibility to use Paid Ads for user growth.

Amidst uncertainties surrounding regulation, costs, and conversion rates, Web3's use of methods like Paid Ads to acquire new users remains in its exploratory phase. However, with user growth currently hitting a bottleneck, for established large platforms, it's no longer an option but a necessary step.

The next phase of competition will not only be about who has the bigger budget, but also about who understands users better and who understands growth better. The real battle may have just begun.