Non-fungible tokens, or NFTs, have seen a meteoric rise in marketing. Arguably one of the most recognizable symbols of speculative assets, digital assets, and Web3 - topics that have generated widespread attention and activity over the past few years - NFTs have already presented many potential use cases for generating brand awareness despite being very much in their infancy.
Hype or effective marketing tool? Here’s a look at what NFTs are and how brands are leveraging them for marketing success.
What is an NFT?
NFTs are digital tokens with one-of-a-kind identifying codes that are stored on the blockchain and cannot be modified or replicated. Because each NFT is unique, it cannot be exchanged in the same way other digital assets (such as cryptocurrencies) can. NFTs come in many forms - from art to music to Jack Dorsey’s first tweet, and can be used by brands in numerous ways like event promotion, philanthropy. and counterfeit prevention.
They are an example of Web3 - a still somewhat hazily-defined concept of the next iteration of the internet that encompasses things like the metaverse, de-centralization, cryptocurrency like Bitcoin, and utilization of the blockchain. One of the more famous NFT examples is the Bored Ape Yacht Club series of NFTs - digital art of cartoon apes in various clothing attire and accessories that gained popularity in 2021, including from a number of celebrities like Justin Bieber, Snoop Dogg, and Eminem.
Like the chaos surrounding cryptocurrencies, the proliferation of NFTs hasn’t all been smooth sailing. In the wake of a purchasing frenzy during the pandemic, many have dropped significantly in value from their original purchase price. In the case of Justin Bieber’s Bored Ape, its value has plummeted from $1.3 million to $69,000.
Despite this volatility, NFTs aren’t dying but are likely in the process of metamorphosis. Given how nascent they are, there is likely to be plenty of untapped potential in terms of how they can be used. Presently, brands have already come up with some pretty clever ways of leveraging NFTs in their marketing efforts. Here’s a look at the story so far.
Five ways brands are leveraging NFTs
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Counterfeit prevention
In an effort to reassociate the brand with luxury and battle an issue with counterfeiting, Robert Mondavi Winery paired a specific, highly exclusive blend of its wine with custom porcelain bottles and NFTs. The added documentation that NFTs provide, including the owner and the bottle’s provenance recorded on the blockchain, was used in order to help prove their authenticity and one-of-a-kind nature in an industry that battles counterfeiting issues. The NFTs also help the brand keep its connection to the purchaser - offering ongoing benefits, such as special experiences that are unlocked if the owner visits the winery, to maintain the brand’s relationship with the owner.
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Events
The NFL provided Super Bowl attendees with their own commemorative NFTs in the form of virtual tickets that featured each individual’s section, row, and seat number - one of a number of experiments the league has conducted with NFT ticketing.
Fashion Week moved to the metaverse, providing attendees with opportunities to purchase NFTs as they watched digital presentations from major brands like Dolce & Gabbana and Tommy Hilfiger.
Coachella Music and Arts Festival attendees were provided access to an “In Bloom” NFT that enabled entry to an exclusive festival access line, as well as other randomly selected perks that provided some owners with benefits like future festival passes and VIP upgrades. Some of the Coachella NFTs, such as those that included lifetime passes, could be highly sought in the aftermarket, presenting another opportunity: brands can get a cut of all future sales of an NFT if an owner chooses to sell it. But the Coachella NFTs highlighted another potential pitfall in the still relatively unstable world of digital assets: the FTX collapse put user access to the In Bloom NFTs in limbo.
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Charity
Some brands have utilized NFTs for philanthropy. Ellen Degeneres raised over $33K for a food relief organization through an NFT auction promoted on her show. Coca-Cola celebrated Pride Month by donating the proceeds from a series of NFTs to LGBTQIA+ organizations.
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Exclusivity
The NBA launched a marketplace called TopShot where fans can buy NFT video clips of big in-game moments - a digital equivalent of trading cards that collectors have been buying and trading for decades. -
Sponsorship
Brands have also seen NFTs as a way to put a spotlight on and support members of a community. Budweiser partnered with 22 emerging musicians by offering NFTs with tiered benefits. The NFTs enabled buyers to directly support the artists Budweiser chose to highlight.
NFTs may have a place in your marketing strategies
The digital asset market is full of volatility and even outright scams, and NFTs are not immune to this. Brands should tread carefully, given the newness and the potential for reputational damage if a marketing campaign involving NFTs goes south. That said, there are many potential avenues in which NFTs can be beneficial to a brand.
Like other emerging technologies, NFTs are still in their infancy, and despite how much attention they’ve received over the past few years, audience adoption as a whole is still relatively slow, with only 4 percent of U.S. adults having owned NFTs. There is a wealth of experimentation happening with NFTs on the marketing side at the moment, with many potential use cases yet to be seen.
Ultimately, knowing your audience and how/if your customer base would respond to an emerging asset like NFTs will be the best way to inform how you approach NFTs and implement them into marketing strategies.
Want to learn more about identifying the right marketing avenues for your customers? Learn how MTR can help tailor your marketing strategies for maximum results and contact us for expert advice and support.
