How Brian Armstrong lost Coinbase’s advertising halo
A case study in leadership failure
A slight departure from our normal format and topics this week — come along for a timely screed, if you will. Last week, we were part of a chorus of voices who weighed in on and admired the Super Bowl ad from cryptocurrency company Coinbase. Its ad — a QR code that changed colors as it playfully bounced around the screen, reminiscent of the old DVD screensaver — inspired a wave of Super Bowl spectators to slip down the QR-code rabbit hole. Coinbase’s landing page crashed, and its app became the second-most downloaded app in the days after the game — from #186.
We estimated that the buy netted out to a cost per install of somewhere in the neighborhood of ~$100, which we thought was a wise use of marketing budget for the Super Bowl’s vast reach and ad’s the short time window; consumers had to open a Coinbase account within a few days to score $15 in free Bitcoin, which delivered fast insights into how it performed. Adweek named the spot the Super Bow’s No. 1 ad.
After the game, Coinbase CEO Brain Armstrong took a moment to take a victory lap and offer his Twitter followers the “backstory.” You see, the company paid $14 million for the spot before it knew what to do with it, and Armstrong didn’t like any of the ideas brought to him from an outside agency. So his team, short on time, came up with the QR code idea. While he says that his team “did an amazing job pulling this off last minute,” his comments then took a turn:
That got our attention — and made our blood boil.
Disrespect for marketing
Armstrong is the CEO of a publicly traded company with nearly a $40 billion market cap. He has someone on his senior executive team — someone who he presumably interacts with on a weekly basis — who owns the marketing function. His chief marketing officer, Kate Rouch, spent years at Facebook and is well regarded within the industry. Yet he says he is “still new to marketing” before proceeding to insinuate that he actually knows everything there is to know about marketing.
“No ad agency would have done this ad.” (Demonstrably false.)
"’Do things that you think are funny or awesome even if people tell you it won't work" seems like reasonable advice so far.’” (Actually, quite the opposite.)
Would he — or anyone — say that he read some law books, so now he’s now an expert in the legal profession and able to run the compliance department? Would he ever suggest that he can take over finance because he subscribes to the Wall Street Journal?
No.
What is it about the marketing function that inspires so many executives to become armchair experts, as if it is not a bona-fide discipline with best practices and norms? No wonder CMO tenures are shorter than their peers —- when the rest of the C-suite doesn’t really understand what you do and thinks they can likely do your job better, what’s the point of sticking around?
Company maturity
We would wager that CEOs of mature enterprises generally don't believe or act like they do everything in their companies. Instead, they hire the people who they think will do the job best and then they (hopefully) get out of the way and let them do the job.
Based on this episode with Coinbase, why would anyone want to work for Armstrong? This rare type of public display seems like a fairly clear sign to us that this company has, ahem, issues. If you're a candidate evaluating whether to work there or not, this scenario may persuade you to (rightfully) steer clear.
Armstrong could have done any number of things in the wake of a successful Super Bowl ad that would have been perfectly acceptable. He could have said nothing, for example. He could have deferred all credit to his team. He could have name-checked Accenture Interactive, the hybrid consultancy-agency that actually did the ad, and given it major props for its work.
Instead, he is the star of the show and not Coinbase’s employees. He clearly didn't have a team around him — no one in the chain of command — to save him from himself.
Leaders make choices every day. If it's not clear to you that one of your key choices should be to err on the side of giving your team the latitude to make their own decisions — whether that's to take risks, fail fast, or iterate — as well as the gratitude when they execute really well, then you're not much of a leader.
Dig deeper
Thanks for reading,
Ana, Maja, and the Sparrow team
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