You’ve probably heard about the NFT (non-fungible token) craze by now – these digital decentralized (DeFi) assets have grown in popularity, with $174 million already invested in NFTs, according to Forbes.
A common use case is as a form of “digital art”. I’ve personally toyed with NFTs after being gifted a ‘Soul’ from the Lost Souls Sanctuary collection and a Sappy Seal. I was eventually able to sell it for a profit of 1 ETH. Many are still hesitant about NFTs because of market volatility. One day your digital art could be worth 1 ETH and the next nothing. This is especially true with the current challenging market conditions.
NFTs are finding their way into marketing and comms plans as a new strategy to attract and engage audiences.
So, should you jump on the bandwagon, or are NFTs just a risky trend that will fade away?
A new way to raise awareness
Due to the hype around NFTs, new launches provide an opportunity to attract attention and new audiences. Here are three examples.
- One of the oldest playing card companies, Bicycle, company teamed up with an artist to create a NFT collection of its playing cards where buyers gain access to exclusive events, presales, and access to a physical deck of the NFTs.
- Budweiser hosted the #NFTBeerFest reserved for holders of specific branded NFTs, who enjoyed free drinks, exclusive tours of its flagship brewery, and giveaways.
- Norwegian Cruise Line released a series of NFTs showcasing its new ships, the first of which was auctioned and came with a premium stay on one of the inaugural voyages.
In each of these examples, users get exclusive content or access through the branded NFTs, providing an incentive to engage and really acting as an extension of existing marketing competitions, giveaways and premium programs.
Organizations are also starting to explore ways to leverage NFTs as marketing tools to help drive leads and encourage interest in new products.
- In a recent campaign, Gary Vaynerchuk utilized NFTs to promote the release of his book, “Twelve in a Half”. For every 12 books purchased in a 24-hour period, consumers were awarded with a free NFT. The project helped earn a million pre-orders in the first day.
- Urban Outfitters is partnering with Cryptoon Goonz, an NFT collection, to launch a limited-edition line of apparel – dropping at an event at its flagship store in New York’s Herald Square.
- Outback Steakhouse is launching its first collection of NFTs celebrating its college athlete partners, dropping 8,000 free NFTs that will be redeemable for rewards timed with in-store celebrations to encourage customer participation.
Incorporating NFTs as incentives to buy other products and services can be an effective way to not only make the most of the hype around the technology, but also extend awareness beyond the point of engagement or purchase as people share, sell, or promote the NFTs online.
But be aware of the risks
As with anything new, there are many unknowns and some key challenges to consider when it comes to branded NFTs:
- Environmental impact – A significant con of minting and using NFTs is the environmental impact. The creation of an NFT consuming a notable amount of energy. There is a push amongst many creators to find more sustainably conscious ways of minting NFTs, but for now there is often a fair amount of challenge from employees & external audiences (as Salesforce faced from its staff when it announced the launch of its NFT cloud service).
- Value – Hype plays a big part in driving prices, and the challenge there is how can a company build hype for its branded NFTs? Wider marketing and comms tactics come into play; sharing across social and earned media coverage around any NFT launch can build excitement and help encourage interest, in turn building value – but of course market volatility is unpredictable.
- Security – There are ways for hackers to exploit even the smallest flaw in a smart contract and steal NFTs – or anything in your digital wallet. A real-life example of this was Seth Green and 4 Bored Ape Yacht Club NFTs. Seth was able to see exactly who stole it and reached out to the hacker publicly on Twitter to get it returned.
For now, there is a lot we still don’t know. Although NFT digital art is fun and something I will continue to explore and collect, we’re still in a ‘testing’ phase.
Branded NFTs could be one way to unlock a wider audience and a step into a more innovative era for your company.
Jasmine Hwang is an account executive in New York