NFTs: What Are They & How Can Marketers Use Them?
It seems like cartoon cats and apes are suddenly ruling the digital world. Wondering what it’s all about? It’s time to dive into the rise of NFTs.
Before you say “what the heck are NFTs,” you should know that crypto economies have been using these non-fungible tokens since 2017, back when CryptoPunks launched their unique digital art marketplace — the first of its kind.
Marketers who are also enthusiasts of blockchain technology and cryptocurrency will already know about these digital assets, but back then they had very little name recognition in the wider world.
Market capitalization for NFTs grew nearly tenfold between 2018–2020 — a seriously rapid upswing. Every week, between 30,000 and 80,000 NFTs change ownership — so it’s certainly a trend worth paying attention to.
But it was in 2021 that NFTs really made their mark on the world stage.
An auction house named Christie’s sold a single NFT worth 69 million USD in March 2021, from artist Beeple. It was the third most expensive work of art ever sold by a living artist. Moreover, NBA Top Shot is one of the biggest NFT series out there — allowing fans to “own” classic moments in basketball history.
Because of examples like these, marketers are quickly realizing that NFT marketing is an effective tool for enhancing their relationships with their audiences, boosting customer engagement, and creating brand awareness.
Below, we’ll explain what NFTs are and how marketers can make use of them (with examples).
What are NFTs? And why are they so popular?
Non-fungible tokens (popularly known as NFTs) are unique and non-interchangeable chunks of data stored on a digital ledger.
NFTs are a unique type of crypto asset, similar to Bitcoin and Dogecoin, in that they convey a virtual value you “own” that can be sold or traded to others. Most buying and selling of NFTs has so far been done on the Ethereum blockchain.
These “digital certificates” serve as proof of ownership — and have so far been applied to digital assets such as artwork, memes, GIFs, and even tweets!
Just like other concepts from the world of crypto, some people seem to get it, and some don’t. So it’s worth listening to those that do, to understand where the value lies.
In a recent news interview, Hollander compared NFTs to a beautiful portrait hanging in a museum, saying that even if you take a photo of it or buy a print from a gift shop, it will not be the same value as the original.
There is no way to distinguish the original from the copy of digital assets — whether it’s a photo, an image, a video, or a music file — since when you copy a digital file, it is the same as the original.
But an NFT enables you to provide infallible proof of ownership of the originals of these digital assets, which has implications for a variety of markets.
Hollander responded to a question about what makes NFTs valuable, saying:
“People are starting to care just as much about their digital persona as they do about their physical self. And so, just like in the real world, how you might buy a Rolex watch or a really nice car to flex your status, people are starting to do that with their digital profile.
(Remember those cartoon cats and apes we mentioned? This is what we’re talking about!)
“And today that’s taking the form of your “pfp” (profile picture) or the image you use on Twitter or Instagram. “But as we move to a world where we have a truly interactive metaverse — where there’s a place where people can go to play, learn, interact, conduct commerce and more — you’re gonna have an avatar. “And inside those digital spaces, that avatar represents an opportunity for you to again flex your status.”
Hollander goes on to say it’s not surprising that celebrities and influencers like Jimmy Fallon, Post Malone, Steph Curry, Mark Cuban, Snoop Dogg, and others are snatching up the expensive, prestigious NFTs they can use to represent themselves in the digital world. It’s art collecting in the digital age!
You can start searching through collections in an NFT marketplace like OpenSea, which is essentially the eBay of NFTs. About 400k people are currently active on Opensea — showing just how many people are currently engaged with NFTs in 2022.
So, why should brand marketers be interested in NFTs?
NFTs in marketing are becoming more popular as headlines driven by NFT deals have grown in popularity. Case in point: A few months ago, we saw the news about Jack Dorsey’s first tweet selling for $2.9 million!
And you can’t forget the sale of the Nyan Cat meme by Chris Torres in February 2021 for $580,000.
Nonfungible.com, a market tracker, estimates that NFT sales in the first half of 2021 reached an impressive $2.5 billion.
The ability of NFTs to represent items such as art, audio, and video is one of their defining characteristics. A variety of types of creative works can be represented using NFTs — including virtual real estate, virtual worlds, digital artwork, fashion, and much more.
With these NFTs, marketers can create tokens that are tailored to specific audiences to target specific messages for specific groups.
The strategy of using NFT marketing to increase brand loyalty is that it allows their followers to own unique, branded digital items — a sure way to cement a place in their fans’ hearts. Essentially, NFTs are given value by hype, and when there’s a particularly massive launch, the hype cycle gets even stronger.
Brands Using NFTs in their Marketing
As the NFT market grows, many brands are now changing their marketing approaches, driven mainly by FOMO (Fear of Missing Out). While you’ll likely know these brands, you may not have realized that they’re creating huge amounts of press by launching innovative, branded NFTs.
Here are some of the most notable examples.
Budweiser, Anheuser-Busch’s American-style pale lager, announced on November 30, 2021 that 1,936 collectible non-fungible tokens (NFTs) would be released.
Budweiser introduced their first NFT collection called the “Budverse Cans Heritage Edition”. The set contains 1,936 unique digital cans — each representing the year when Budweiser issued its first can.
Each NFT is one-of-a-kind and is created with historic photos, ads, and artwork from Budweiser’s rich history. As a result, each NFT will act as a key to the Budverse, providing access to exclusive rewards and surprises.
As of December 4, 2021, Budweiser posted on Twitter saying that their first NFT was sold out on Monday — hence asking their fans to retweet and share their post using #BudverseNFTGiveaway for them to earn a shot at taking home a virtual cold beer.
Earlier this year, department store Macy’s released its 95th Thanksgiving Parade collection — which includes 9,510 non-fungible tokens.
This is a traditional US parade that takes place in New York City — famed throughout the world for its giant balloons, which rise above parade-goers and cheering crowds. These balloons, having lit up the streets of New York once a year for 95 years, are now NFTs.
From the late 1920s to the present, Macy’s creative and archival content has been used to create the artworks. One could say that they’ve taken an intriguing approach to explore digital art with these designs.
Customers were welcomed to bid for and buy their NFTs tokens starting from Thanksgiving 2021, and a 10% commission on every resale in the secondary market is guaranteed by the smart contracts blockchain system.
Macy’s has chosen the Make-A-Wish Foundation as its beneficiary for all proceeds.
3. Taco Bell
“Our Spicy Potato Soft Tacos can now live in your hearts, stomachs and digital wallets.”
Imagine trying to explain that to someone 5 years ago. Taco Bell’s tweet introducing their new NFT range really got people talking.
Yes, that’s right! As they launched five versions of digital art, Taco Bell has become one of the first fast-food chains to get on board with NFT art.
Most of these have a connection to Taco Bell’s menu, and within 30 minutes, Taco Bell sold 25 pieces of crypto-art for $1 each on Rarible. Trading on the secondary market meant their value rose almost instantly.
All profits from subsequent sales will go to the Live Más Scholarship, because Taco Bell gets 0.01% of each future transaction.
Major brands, like those listed above, are undertaking NFT marketing in new, creative ways. According to Adam Hollander, it’s a terrific time for brands and marketers to join in — after all, NFTs are only in their infancy and show no signs of disappearing any time soon.
Plus — the hype is catching on with consumers, and they’re eager to spend their cash on assets they find valuable. And if that value is linked to your brand, it will only make you stronger.
Remember: 83% of Millennials report that they’re more likely to conduct business with those who share their beliefs — so if you’re not a believer yet, you’re missing out on an opportunity to connect with potential brand evangelists.
NFTs are capable of generating a lot of attention and creating memorable experiences for audiences around the world. Would your next campaign benefit from this exciting new trend? You won’t know till you try.
Originally published at https://latana.com.