One of the biggest parts of being a good marketer is the ability to keep your finger on the pulse of current trends. Knowing what’s hot and what’s not at any given time will earn you the ability to make more savvy marketing decisions and mount better campaigns.
One of the most undeniably hottest trends of the past several months is of course NFTs. They’ve been the focus of as much celebration as they have controversy of late, not to mention the fact that they’re regularly being sold for thousands of dollars, but does that mean they are an ideal marketing tool?
What Are NFTs?
Before we look at how to market non-fungible tokens (to give them their full name), we need to first understand what they are. One of the most compelling things about NFTs is that they’re a completely new concept. As such, many people aren’t quite sure how they work.
NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated, which is what makes them nonfungible; one NFT cannot be exchanged with another NFT. It can however be traded or sold. It designates ownership of a given unique asset, such as a piece of art. Each NFT is tied to some unique data, typically a digital content file of some kind and governed by a “smart contract”(computer code that execute simple if/then functions). The process of converting a media file into a non-fungible token is referred to as “minting” an NFT: the NFT and its ownership are written to the applicable blockchain database.
Currently most NFTs are being used as some sort of collectible, digital artwork (as in the NFT Beeple sold at a Christy’s auction for $69.3 million) or virtual real estate. These NFTs are bought and sold by collectors, investors, speculators, or maybe consumers/players. According to DappRadar, a firm which tracks NFT sales, NFT sales volume totaled $24.9 billion in 2021, compared to just $94.9 million the year before and then grew another $12 billion in Q 1 2022, which is actually down slightly from $13 billion in Q4 2021. Dapp says the market may be beginning to mature. We think it is more likely that its dynamics will change as more companies and other entities enter the marketplace and recognize the opportunities NFTs open up.
Now that you’ve learned what an NFT is, let’s look at how brands are weaving them into their marketing plans.
For example, you can get creative and make an NFT that ties into a marketing campaign you’re doing and then offer it as a prize for engagement and participation. This is especially smart because even the mere mention of an NFT these days will pique people’s interest.
Take a page out of brands such as Taco Bell’s book. The purveyor of fine Mexican fast food recently announced it was selling GIFs and images featuring tacos and other treats. In a super smart move, even the NFL is in on the action, turning tickets to the Super Bowl into collectible NFTs.
The more interesting use for these assets moving forward however will be in their “smart” capacity, which could provide a way to learn about and communicate with members of groups which are connected through blockchain technology and linked by common interests. Providing customers/fans/prospects with an NFT representing something desirable from the brand (e.g. artwork, digital product, gaming token, event ticket, club membership) which is trackable can allow for unique segmentation and engagement strategies that can connect brands and consumers more directly in terms of loyalty rewards, providing input into new product offerings, hyper personalized promotions; possibilities are limited only by the imagination.
As with anything new, there are certainly risks associated with this new form of cryptocurrency. At the moment this blog was written, the cryptocurrency marketplace is a bit volatile, so investments into NFTs is not 100% stable. Many consumers are still not fully educated on blockchain technology either, so education is needed when using NFTs in consumer based marketing plans. There are also costs to the brand and environmental impacts from the creation of NFTs that need to be considered.
Incorporate New Trends Into Your Repertoire Today
As a marketer, you can’t shy away from new trends. NFTs are continuing to grow in popularity and what’s more, they can be super lucrative when utilized in the correct way. A marketer must truly understand what goals they are attempting to achieve by using NFTs before including them in their marketing plans – between the costs associated and relevancy to the everyday consumer, NFTs are not for everyone. While we don’t yet know how these assets will continue to be used in brand marketing, if you’re looking for more actionable marketing intel, we’d be happy to provide it. We incorporate out of the box thinking and the latest marketing trends in our strategy and planning. Get in touch with us today.