NFTs: What do they mean for brands?
Brands look to NFTs as a new way to connect with consumers and generate revenue, but what do NFTs mean for brands really?
NFTs started popping up in March when Jack Dorsey sold his first tweet as an NFT for just under $3 million, and even more, after a collage by artist Beeple sold at a Christie’s auction for $69 million. Since then, brands, celebrities, and agencies have been trying out the new medium as a way to engage customers and generate new revenue streams.
K, but WTF is an NFT?
Let’s start with a definition.
A non-fungible token (NFT) is essentially a unique digital asset, built on blockchain technology that represents ownership of real-world items like art, video clips, music, and more.
What are NFTs actually?
A passing fad? A future tool for artistic compensation? The art of money laundering? A good investment? A great business opportunity? Eccentric modern-day digital collectibles? A digital authenticity certificate? A new way for people to enjoy themselves while making money at the same time?
The answer is all, but a passing fad. NFTs are here to stay…
What’s the point of NFTs?
It really depends on whether you’re an artist, an art lover, a buyer, a gamer, a businessman, or a collector, but in this article, we’re going to talk about what they mean for brands.
Brands are suffering from FOMO.
Everyone’s either doing NFTs, thinking about doing NFTs, or suffering from FOMO because they’re not doing NFTs.
According to recent research from The Harris Poll and R&CPMK, about half of consumers familiar with NFTs (47%) are interested in brands offering them as a commercial product, providing new use cases for brand marketers to capitalize on the digital tokens.
47% of consumers familiar with NFTs are interested in brands offering them as a commercial product.
Having said this, most brands are doing NFTs for the sake of doing, but how can NFTs be used to add value to brands?
Here are some of the many different ways brands can make use of NFTs:
1. As A New Social, High Engagement Platform That Can Be Used to Reinvent Brands
Even old-school brands are finding ways to be part of the recent NFT craze.
For example, Campbell’s Soup revamped its label to a cleaner, more modern look, and commemorated the change with 100 NFTs.
“We’ve been on a journey to reimagine this iconic brand and appeal to new generations of consumers who are cooking at home more than ever, while still honoring our rich history. The commissioning of our first-ever NFT art piece pays tribute to our place in art and pop culture, while celebrating in the most modern art medium to date.”
-Linda Lee, chief marketing officer of meals & beverages at Campbell Soup Company
2. As A New Platform That Can Be Used for Social Good
Brands are making use of the benefits of NFTs to take meaningful actions.
Bacardi teamed up with GRAMMY Award-winning producer Boi-1da to champion underrepresented voices in the music industry. The partners wanted to address the status quo that only 2% of music producers are female and used the power of NFTs to promote female representation in the music industry. They designed the Music Liberates Music program so that for the first time ever, proceeds would go directly to the artist and “fanvestors” who invest in the producers’ work, meaning the more the song gets streamed, the more the artist and their fans both make, thus helping talents who are at the start of their career to create a deeper connection with fans. But more importantly, by enabling creators to reach their audiences directly, NFTs have placed the power back in the hands of the content creators.
NFTs have placed the power back in the hands of the content creators.
3. As The Digital Equivalent of Collectibles
Brands are also making use of the benefits of NFTs to solve niche industry problems, as NFTs act as digital records that establish ownership and authenticity of unique items for collectors.
In the wine world, NFTs actually serve a practical purpose that combats one of the industry’s oldest and biggest problems: counterfeit wine. By selling the wine along with NFTs, ownership is recorded on the blockchain, as is the bottle’s provenance. For collectors concerned about vintage counterfeit wines, NFTs act as a certificate of ownership, and authenticity.
To fight counterfeit wines, Robert Mondavi Winery created a package of goods tied to NFTs, as a way to verify the origin of the wine. Only 1,966 packages, a nod to the winery’s founding in 1966, were created for purchase. Wine collectors were able to purchase NFTs online and then received a physical porcelain magnum of 2019 Cabernet Sauvignon corresponding to the NFTs, which were artworks designed by the porcelain manufacturer Bernadaud.
4. As Unique Commemorative Memorabilia to Deepen Consumer Connections
NFTs also represent a myriad of options for marketers looking to create unique, commemorative items for specific events. Taking the practice one step further than tying an NFT to a purchase, marketers can use NFTs as a subsequent item to deepen consumer connection within a marketable moment by leveraging digital tokens that can capture those same moments and make them endlessly accessible to fans.
In order to reward fans attending the games in person, the NBA team Dallas Mavericks has begun issuing players’ profile pictures as non-fungible tokens (NFTs), The Mavs. A total of 20,000 NFTs are minted per basketball game, and fans are given them as a reward for attending the game in person.
“The whole idea is not to try to sell the NFTs and try to make some money off them. The whole idea is to reward fans for coming. People that are actually there and scan in are the ones that are going to get the NFT commemorating that game. And we’ll do something special for anything that happens in that game and the fan can hold it as a collectible or they can sell it somewhere else. We want it to be a value add for all Mavs fans that go to games.”
-Mark Cuban, owner of NBA team Dallas Mavericks and crypto enthusiast
These four ways stated above are only a few of the many ways brands can make use of NFTs to add value or complement their community-building efforts.
With all its benefits and potentially lucrative opportunities available for artists and collectors, NFTs are disrupting the art market. As to what brands can do with NFTs, the sky really is the limit, as it usually is with all creative endeavors.
If you’ve read this far and you’re still not sure how to incorporate NFTs in your brand strategy or whether should you, you can always come back to the HOW BRANDS ARE USING NFTS — A CONTINUALLY UPDATED LIST on AdAge for inspiration.
