Minted: why brands and agencies are rushing into NFTs
The latest hype surrounding the blockchain concerns non-fungible tokens (NFTs), with brands such as Coca-Cola, Dole and Twitter already selling in this way. As part of our Retail Deep Dive, The Drum speaks to the brands, agencies, artists and platforms that are selling NFTs at this early stage to find out what the retail opportunity really is.
The more time we spend online, the more our identity becomes intertwined with our digital environments. NFTs are having a period of hype, but they have long been used in the world of gaming, the heartland of the metaverse. It therefore makes sense that NFTs, which represent the merging of online experience and real-world commerce, are exciting to businesses as it represents a chance to build revenue in a creative and connected way.
“This is the new battleground for consumer attention and commerce,” says Tom Simpson, senior vice-president, APAC, Adcolony. “NFTs sit at the convergence of culture, identity, property, value, content and interactive technology. They represent both a mindset and a medium. It’s a virtual world, but with real value for brands, and marketers shouldn’t be afraid to dive in right now and experiment – with genuine leveling-up opportunities for early innovators who get it right.”
What’s behind the hype?
Early innovators include Coca-Cola, Christie’s, Dole and Twitter, which have entered the world of NFTs in entirely different ways.
Dominic Ho, an art director who co-founded Crypto Art Week Asia, says he believes NFTs are here to stay because of the way they add tangibility to digital.
“Linking a real-world purpose to the digital space will change perceptions due to the tangible nature of its use case. People will begin to trust and see the value of owning an NFT rather than viewing it as ‘buying a jpg’,” he explains.
Adcolony’s Simpson agrees that tangibility is key, and believes the transformative element is placing scarcity on items, which has generated attention from luxury brands.
“Luxury brands are really pioneering in this space, using engagement via gaming and NFTs as a springboard to drive revenue. LVMH, Burberry, Dior, Balenciaga, Valentino and Gucci have all delivered successful gaming and NFT projects recently. As an example, LVMH recently launched a mobile-based game, with NFTs from famous artists baked in, to celebrate their 200th birthday.
“Taking this further, Gucci became the first luxury brand to sell augmented reality NFT sneakers, the Gucci Virtual 25, for $12 in March. In five to 10 years, a relatively big chunk of many brands’ revenue is expected to come from these digital-first products for the metaverse. Why? Everyone wants to own a Gucci skin for their avatar in the metaverse for exactly the same reason they own a Gucci handbag in the real world. Humans seek scarcity, status and uniqueness, and this is what NFTs enable.”
This has also caught the eyes of ad agencies already, with the likes of Vayner Media launching dedicated units.
Avery Akkineni, president of VaynerNFT, who recently moved into the role of leading the organization, says: “The birth of NFTs is one of the biggest technology shifts and cultural norms of our lifetime, which is what led Gary (Vaynerchuk) to launch VaynerNFT, a company offering strategic consulting and education for brands looking to harness the power of NFTs as part of their long-term business strategy.”
It’s a bigger community
The first lesson people getting involved in the world of NFTs soon discover is that it’s a much wider community than they first expected, with audiences spending time across multiple platforms.
Crypto Art Week Asia’s Ho explains that getting involved in the community is essential, and brands should not pay lip service. “Brands and businesses should not jump on the NFT bandwagon because it is new and shiny, but rather they should understand the community around it. I feel that NFTs are very community-driven due to their decentralized nature – from collectors to artists, there is a very vibrant community on Twitter, Clubhouse and Discord.”
Likewise, VaynerNFT’s Akkineni says she’s had to get involved in these communities in order to translate the world for brands. “Learning about the vast potential of the Metaverse has been nothing short of fascinating; it’s been great to dive into ‘NFT OG’ communities and think through the many use cases NFTs can provide consumers. NFTs go beyond art – while art, music and sports are getting the most attention today, I’ve really come to understand and embrace the fact that NFTs will straddle every industry, and this is why businesses and brands need to pay attention.”
One of the ‘OG’ NFT communities exists on Twitter and the platform used this as a reason to gift their own artwork, which they minted and gifted through Rarible, a platform that works on the Ethereum blockchain.
According to a Twitter spokesperson, the project was a way of thanking the community: “We’re always looking for ways to engage with and amplify the conversations that matter to people. The NFT community on Twitter is dynamic and growing, and we wanted to surprise them with this first-of-its-kind drop. We chose to give these NFTs to consumers for free instead of selling them as we wanted to celebrate the people that are driving the NFT conversation.”
Stay true to your brand
Twitter using the very content its community is passionate about to thank them is the essence of another major lesson for brands: staying true to your brand and purpose.
Global fruit giant Dole could seem like an unlikely brand to enter the world of NFTs at an early stage, but chief marketer Rupen Desai explains that the company used its purpose as its North Star and found an exciting new way of communicating its story.
“We learned that creativity and technology need to always be in service of the brand purpose and intent, and never the other way around. Doing new stuff just because it’s new will end up as wasted marketing dollars. It was only when we found the right artist in the ‘Hungry Artist’ David Datuna, the Boys & Girls Clubs, our carbon offset partner, and the right expertise in this space all aligned to the shared purpose of wanting to change the inequality around nutrition that we ensured we did this right and did this well. The lesson here is to stay true to your purpose from the onset and look for kindred partners.”
Steve Lawler, the co-founder of Eyeyah and The Unusual, is also an artist by the name of Mojoko. He stepped into the world of NFTs wearing his artist hat and found that, currently, it is hard to know the full scope of engagement around the content, so suitability is key. “If it suits your business then it’s a logical place to explore. It’s not easy to measure views or hits, but it does open up new business opportunities for digital products.”
Think long term
Currently, a lot of the NFT community crosses over with the gaming or crypto community, as it is inherently driven by both. In order to bring more people into the ecosystem, some of the emotional drivers of commerce and connection will need to be understood by mainstream audiences.
Lawler adds: “I think the concept of lockers or display cases will be vital in the growth in the mainstream. The idea is to have somewhere you can publicly show off the goods that you own. Much like Instagram, where you flex your goods in a very visible public way, they will reflect your personality and your vanity, dialing into the main impulses of social media.”
With NFTs being a lot more intrinsically connected to commerce and real business, brands too need to think of the long term.
“Think long term,” Akkineni says. “So many brand-driven projects have popped up without long-term brand consideration in mind; in this space, it’s better to be right than first.”
The hype of NFTs may have a lot more substance to it than some technologies that have passed through a marketer’s toolkit because it’s so tied to experience and commerce. For this reason, the execution needs to be thought through, with experimentation tied to brand purpose and community.
The Drum will this week be experimenting in its own NFT sale, auctioning off an iconic cover image. The Vol ‘#41 Issue #8’ cover of The Drum represents the ‘new normal’ and marks a time in history we’ll never forget. The cover artwork, created by The Drum design team, reflects the importance of technology and design in our world. This is the first piece of content The Drum has sold via NFT and the proceeds will be donated to The Drum’s charity of choice The Marching Cobras. Bid in the auction by visiting the OpenSea page.
Read more about the future of retail in The Drum’s Retail Deep Dive.