As marketers look for authentic ways to engage with hyperconnected and perhaps over stimulated consumers, the stage is being set for next-level brand engagement.
As more consumers join the Web3 movement, awareness and adoption of blockchain-based technologies – including non-fungible tokens (NFTs) – is accelerating.
The use case and value proposition of NFTs is virtually unlimited, allowing marketers to reimagine how their brand engages with consumers.
What are NFTs?
NFTs are unique digital assets that live on the blockchain and can be bought, sold or traded – much like art and other collectibles. NFTs are like snowflakes: no two are alike. As we will see, NFT use cases are only limited by one’s imagination – from IRL (in real life) to the metaverse.
While NFTs have been around since 2014, they’ve become significantly more popular over the last couple of years. This year, NFT sales have already eclipsed $27 billion, compared to $95.11 million in 2020 and $25.51 billion in 2021. To date, the largest NFT sale clocks in at a whopping $69.3 million, when Christie’s auctioned off digital artist Beeple’s one-of-a-kind work.
With so much market activity, it comes as no surprise that brands across a variety of verticals are developing NFT strategies in order to capitalize on the opportunity to create new touch points with consumers.
How are brands currently using NFTs?
While brand NFT strategies are largely considered to be a work in progress, NFT sales ramped from $200 million in 2020 to $2 billion in 2021.
Here are some examples of how brands are using NFTs to bolster their Web3 advertising strategies and earn mindshare with the evolving digital consumer.
Introducing our newest Pringles flavor: CryptoCrisp, an exclusive #NFT flavor created by artist #VasyaKolotusha. Only 50 exist, all starting at the price of a Pringles can. Click the link to get your *digital hands* on one! https://t.co/JA6Bas4Ez0 — Pringles (@Pringles) March 17, 2021
In March 2021, Pringles released an NFT of a virtual flavor, CryptoCrisp. The snack company gave sale proceeds directly to the artist.
In July 2021, the Chicago Bulls created nearly 600 NFTs highlighting each of the team’s six championship rings. These pieces of digital art sold out in six days.
In August 2021, Visa spent $150,000 on a “cryptopunk” NFT. According to Visa Head of Fintech Terry Angelos, the credit card company isn’t holding the NFT on its balance sheet and simply wanted the “commerce memorabilia …as part of our collection.”
In October 2021, Dolce & Gabbana sold a nine-piece digital collection for $5.7 million.
In November 2021, Budweiser sold 1,900 NFTs at $499 apiece within one hour. Shortly after that, investors were selling 75 percent of these tokens on secondary markets.
In April 2022, an investor paid $130,000 for a pair of Nike shoes. The catch? You can’t wear them. It’s an NFT.
MNLTH #1 Artefacts info 🗿 RTFKT x Nike Dunk Genesis 🦿 The first RTFKT x Nike CryptoKicks NFT Sneaker imagined for the year 2052 : made of flexible screens, Galactic Exploration Outsole and Mods, powered by the Revolutionary Skin Vial Tech 👟🧪 pic.twitter.com/gn7A5mBG1e — RTFKT (@RTFKT) April 22, 2022
As these examples illustrate, advertisers and brands should be excited about the almost limitless possibilities to connect and interact with Web3 consumers. That said, NFTs deliver benefits beyond monetization opportunities, which we’ll explore in the next section.
How NFTs drive value for brands and marketers
NFTs are poised to become a business utility tool and means for brands to differentiate. From a use case standpoint, they have the ability to support:
marketing campaigns
revenue generation
customer loyalty
Raise brand awareness
At the highest level, NFTs are a great marketing and branding opportunity. They’re a way to drum up some excitement around who you are and what you’re doing in an authentic, on-trend way. By releasing an NFT, brands can generate positive press and get their name in buzzworthy discussions around NFTs, blockchain, and Web3. Since you’re creating desirable collectibles and/or experiences that investors trade on a global marketplace, the potential reach is limitless.
Drive sales
A successful NFT campaign is a great way to drive sales and generate revenue. Not only can brands sell the NFTs themselves, they can also create communities around their tokens and tap into the broader NFT community. Many members of this passionate community become brand advocates for the projects they’re engaged with. To sum it up: brands can utilize NFTs to create organic communities that support ongoing marketing and sales efforts.
Boost customer loyalty
NFTs are all about artistic innovation. As such, it’s a way to set brands apart from one another — and convince customers why theirs is more worthy. Intelligent brands already see NFTs as a way to drive competitive advantage and increase loyalty. For example, Nike and Adidas are both making inroads into the NFT space in an effort to convince customers that they’re on the leading edge. Even amid market downturns or a “crypto winter,” a well-planned NFT strategy can help a brand differentiate and acquire new consumers that evolve into advocates.
Create one-of-a-kind experiences
NFTs also enable brands to offer unique experiences to their customers — the kind they can’t find anywhere else. Entrepreneur Gary Vaynerchuk, for example, promises that NFT owners will be able to access future conferences and enjoy unique perks.
All VeeCon 2022 Ticket NFTs have been airdropped to VeeFriends Series 1 holders and those who burnt BOOK GAMES tokens for a GOO VeeCon ticket. Now that you’ve received it, how do you view it? 🧵 — VeeCon (@veecon) March 25, 2022
Similarly, brands are using the metaverse to deliver unforgettable virtual experiences and both selling and giving out NFTs to encourage folks to join the party.
Improve Web3 advertising
Last but certainly not least, NFTs are integral to a robust, multi-pronged Web3 advertising strategy. Brands that recognize the Web3 paradigm shift will look to create opt-in value exchanges with audiences. This includes rewarding consumers with cryptocurrency and/or NFTs in exchange for their attention and data.
Not only is this a great way to collect coveted first-party data — which is becoming exceedingly rare in a world that cares more and more about privacy — it can also help brands build direct relationships with loyal customers, whom they can continue to engage and reward over time.
Despite the recent downturn in the market, NFTs are here to stay. The sooner brands get on board, the faster they’ll be ready for Web3.