Why Forbes adds credibility to Binance

Binance made headlines recently for its plans to invest US$200 million in Forbes. Forbes explained that the investment, along with its plan to go public via a combination with special purpose acquisition company, Magnum Opus, will help maximise its brand and enterprise values and convert readers into long-term, engaged customers of the platform. This will be done through ways including memberships, recurring subscriptions, premium content, and highly targeted product offerings.

Going public will also help the publisher use tech and data-driven insights to create more deeply engaged audiences, and recurring revenue streams. Forbes CEO Mike Federle also said that with Binance's investment, the company now has the experience, network and resources of the world’s leading crypto exchange and one of the world’s most successful blockchain innovators.

While this news might seem shocking on the surface, Nishant Kaushal, ADNA's head of data, strategy and solutions, told MARKETING-INTERACTIVE that this unlikely investment is not as surprising as it seems at first glance. Binance generated at least US$20 billion in revenue in 2021, according to Bloomberg, and what does an entity flushed with cash do? "Learn from the likes of private equity firms and make strategic investments in companies that are not maximising their potential," Kaushal said.

He explained that Forbes is a 104-year-old publisher that is still very much stuck in Web 1.0 while the world is now moving to Web 3.0 and blockchain tech. "This investment from Binance along with placing its two directors out of nine on Forbes’ board would help it accelerate the much-needed infrastructure revamp which should drive up the company’s valuation," he added.

If Binance was thinking about this from a short-term perspective, Kaushal said the company would be looking at a quick return on its US$200 investment. "But more likely, a company that is facing multiple regulatory pressures globally and frequent unfavourable PR, having a major stake in one of the leaders of business media is an attractive longer-term play," he explained. 

When it comes to having an attractive longer-term play, Prashant Kumar, founder and senior partner, Entropia - part of Accenture Interactive, said this deal also gives Binance a certain level of credibility that it surely needs among individuals, which is most people, who do not seem to understand what Binance is trying to do. "In fact, it is great that new money has respect for old wisdom, to the extent that Forbes represents that. It's a win-win," Kumar explained, adding:

As far as Binance is concerned, just by owning Forbes it already looks a bit less high school, a bit more adult.

According to Kumar, Binance has been "a singularly aggressive player" in the cryptocurrency space over the last few years, often pushing the regulatory boundary. Amidst this, it is also clear that someone needs to interpret the company's mission for the general public. "It needs to gain greater familiarity and comfort from the other stakeholders such as government, financial institutions and civil society," he said.

Meanwhile, on Forbes' front, given that cryptocurrencies already compete with gold in terms of asset class, staying close to the future helps Forbes stay relevant. "A vast percentage of wealth in last few years has been returns on future. Expect Forbes to increasingly pivot to the future as its DNA," Kumar added.

A push towards brand content and sponsorships?

Binance Asia Services, the Singapore arm of Binance, is ceasing operations on 13 February after much contemplation since November, The Business Times reported. This came after Binance Asia Services' application remained in regulatory limbo for months. Last year, it was also placed on the Investor Alert List by the Monetary Authority of Singapore, which warned consumers that Binance is not licenced or regulated by MAS to provide payment services in the country.

Meanwhile, it also had its product offerings restricted in Malaysia last year while financial regulators in Hong Kong and Japan also warned consumers about Binance, stating that it was not registered to conduct business within the country. The company's unit in the UK was also banned last June from carrying out regulated business in the country. 

Given that cryptocurrency as an industry is likely to be further regulated in many markets, Prantik Mazumdar, MD, CXM Group, dentsu Singapore said this commercial deal makes a lot of strategic sense. 

We are likely to see companies such as Binance focus on B2B marketing avenues such as thought-leadership, sponsorships, account-based marketing and branded content.

Not only is this a space that Forbes has a good amount of mindshare and influence in, but the marketing investments will also allow Binance to keep the brand top of mind among key stakeholders. At the same time, Mazumdar explained that Binance can use these avenues to educate the market about the fundamentals of blockchain-driven crypto technology; positive use cases where crypto can help industries and societies and also sound out potential warnings for people to watch out for.

"If harnessed well, such marketing initiatives can help build trust and confidence in the cryptocurrency or Web 3.0 market, which would only help them grow the category further in the coming decade," he added.

Agreeing with him was ADNA's Kaushal, who added that the investment should help Binance leverage a trusted media platform such as Forbes to get its message out to its global readers, given the shrinking avenues available.

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