Limit Break's NFT Super Bowl Ad | What Does It Mean for Web3 Marketing?

Ty Smith0:03

What's up, guys? Today we are discussing something that's pretty interesting going on in the Web3 marketing world, which is the purchase of a Super Bowl ad by a Web3 gaming company called Limit Break. So I'm going to run through quickly what Limit Break is, what the Super Bowl ad is going to be about and kind of the history behind it, and then why this is significant for us as an industry in the Web3 marketing space.

Ty Smith0:21

All right, so first, who is Limit Break? So Limit Break is a Web3 marketing company, pretty recent, I think they started within the last year. The team is made up of a bunch of mobile gaming industry veterans that built and then sold their gaming company for, I believe, $300 million to a company called AppLovin. And they're now getting involved in the Web3 space.

Ty Smith0:37

They just raised, I think back in March, about $200 million, which is insane, made a ton of headlines if you follow any of the VC-focused publications in the tech world. The round was led by Paradigm, with additional funding coming from FTX and Coinbase Ventures. So a lot of kind of heavy hitters getting involved in this, I guess mainly because they have so much experience in the mobile gaming industry that Web3 is kind of the next venture for these guys.

Ty Smith1:23

Beyond the massive raise that they did, they are most well-known for the creation of DigiDaigaku, I believe is the correct pronunciation. It's an NFT collection. It was launched as a free mint and very quickly shot up to like an $18,000 floor price, which made also tons of headlines, probably one of the most successful free mint projects there is.

Ty Smith2:05

Anyway, so that's what Limit Break is. They just bought a Super Bowl ad for this upcoming 2023 Super Bowl to go out in February. So I want to break it down just a little bit about the price of it, what they're doing in it. So they paid, it's a 30-second ad, as most Super Bowl ads are, and they paid $6.5 million for it.

Ty Smith2:21

I've never bought a Super Bowl ad, I don't know if that's expensive or normal. I imagine it's fairly normal, but still, it's the first ever, according to Gabe Leydon, who's the CEO of Limit Break, he hasn't said a whole lot regarding what is actually going to be in the ad, but it is the first ever NFT branding ad, is what he called it, to be in the Super Bowl, which I thought was interesting because it's going to be obviously the first NFT ad, but that it's a branding ad is pretty interesting in my opinion because it sounds like it's going to be a whole brand play beyond building up DigiDaigaku as a brand that people are going to follow and be interested in.

Ty Smith3:13

Okay, so why is this significant? So this is the part I really want to break down. For Web3 marketers, this is really significant, and just marketers in general, this is really significant for a couple of reasons. One, the obvious one, which is that this is the first NFT-focused ad in a Super Bowl. Last year we had, I believe it was two Super Bowl ads that were focused on crypto and Web3. There was Coinbase, who had the QR code ad, and then eToro had one that was kind of half crypto, half stock-focused.

Ty Smith3:31

Coinbase's QR code ad was probably one of the most talked about ads in last year's Super Bowl, but neither of those, no ad in the Super Bowl ever, has been focused on an NFT project, which I think is pretty cool, and I'm really excited to see how this kind of turns out for these guys. What really excites me about this, beyond it just being NFT-focused, is that this is probably the first time in history that you can in real-time, publicly visible, track the performance of a Super Bowl ad on sales or volume of the product, which is crazy, and this is a totally just blockchain-enabled thing, which is something that probably no one ever even saw coming, which is super, super cool in my opinion.

Ty Smith4:22

What do I mean by that? So as an NFT project, every transaction that happens for DigiDaigaku is going to be recorded on the Ethereum blockchain, it's an ETH-based project, which means as soon as the ad goes live, you can literally watch on a blockchain explorer or on OpenSea or any other thing that enables the watching of blockchain transactions to see how many purchases are happening, what prices those are going for, the volume of it. It's going to be, I think, super cool because we know they've been very public about what they're paying for this ad, $6.5 million is what they're paying for this ad.

Ty Smith4:47

What's going to be really interesting is, is this $6.5 million spend by these guys going to result in more than $6.5 million in revenue for them? So the revenue stream for these guys for the most part in this case is going to be the creator royalties, which are set at 10%. So 10% of every transaction that happens when you buy or sell a DigiDaigaku goes to Limit Break. So that's one part. They're saying it's an NFT branding exercise, meaning that it implies that it's much more of a long-term branding play than it is just performance-based, which I think probably very few Super Bowl ads are really going after performance-based metrics.

Ty Smith5:38

But if this turns out to generate for them more than what they're spending and they're getting the added benefit and press of this Super Bowl ad, it's going to be huge. I mean, $6.5 million is a ton of money, and it's certainly, but it's certainly not a lot for a company that just raised $200 million. But if we see that this $6.5 million spend results in, let's say, $10 million in revenue for these guys, tons and tons of companies are going to start raising money to buy more Super Bowl ads if that's the public case study of the success that can be generated from a Super Bowl ad.

Ty Smith6:27

So I think that's really interesting for obviously the Web3 marketing aspect, but on top of that, it might have some implications regarding just the price of Super Bowl ads. Because I honestly, if I had to guess, I do think it's going to generate more than $6.5 million for these guys. That's just my gut assumption, but the reach is massive with the Super Bowl ad, and $6.5 million isn't crazy if they're getting 10% of every transaction and the current floor price is like $12,000. So 10% of $12,000 times the number of transactions that happen created by the Super Bowl ad, I think it's going to work out well for these guys.

Ty Smith6:49

So that's what I wanted to go through. I think again, this is a super interesting case study that should be studied by Web3 marketers. A $6.5 million investment by Limit Break into a Super Bowl ad, will it result in the volume and the branding impressions that they're looking for? As always, if you found this podcast interesting or valuable, be sure to recommend to a friend. That's all for today, guys. Thanks.