Should brands gamble on NFTs in 2022?
NFTs are unique cryptographic tokens that exist on a blockchain, where users can securely buy, sell and store NFTs as well as other crypto currencies (like bitcoin), and cannot be replicated. NFTs are used to represent real-world items like artwork or real-estate (i.e., website addresses) and can be used to represent individuals' identities, property rights, and more. Anne Greenberg, senior consultant for brand and content at frog, part of Capgemini Invent, explores the NFT phenomenon further.
Capgemini Invent on the rise of the NFT and how marketers can get creative with them.
There is some serious money to be made by purchasing and selling NFTs. On December 4, 2021, The Merge was bought by almost 30,000 collectors for a total of $91.8 Million.
Now, NFTs are typically discussed in the context of an individual, but what are the implications to major brands? Are NFTs suited to drive brand awareness, sentiment and ultimately, profits? We’ll dive into how brands are handling NFTs and making it part of their marketing initiatives in 2022 and beyond.
NFT in the context of a brand
Early players in the NFT space include Microsoft, Twitter and Taco bell, whether that be by rewarding gamers with NFTs upon completion of tasks, allowing crypto-fans to pay creators in cryptocurrency or simply auctioning digital art inspired by tacos. The avenues taken are endless and brands are having fun experimenting with the possibilities.
What are brands doing with NFT profits?
Interestingly, brands aren’t using the profits to put back into their business. Many including Charmin, Coca-Cola and Taco bell are using the profits to donate to charities and scholarships, which is a powerful tactic to drive positive brand sentiment. Taco Bell recently sold 25 pieces of NFTs in under 30 minutes for $1 each. Some pieces were then resold for over $3,000. This helped Taco Bell generate buzz of the brand while giving back to a good cause.
Are NFTs worth the hype?
As businesses and individuals continue to spend more time online and depend on online services, it’s likely that NFTs and other crypto services will continue to gain traction. As NFTs are fairly new, there are some potential risks to consider including fraud, tax implications, depreciating value and environmental.
What can NFTs do to a brand?
Being top of mind is crucial to brand longevity and loyalty, and NFTs have the potential to help brands drive such awareness through their placement, messaging, and frequency.
From a placement perspective, NFTs exist online and conversations around the NFTs are also discussed online on social media, and in publications and news outlets. From a messaging perspective, the meaning behind the NFT can be as powerful as a brand wants but additionally, when discussed by a news outlet or consumer, it can further enhance the positivity surrounding the brand (i.e. Taco bell selling NFTs to give back to the Live Más Scholarship which showcased the brand in a positive light online). Finally, from a frequency perspective, NFTs are a hot topic so by joining the conversation, the brand can increase its visibility and become exposed to new consumers.
Though brands may want to become part of the NFT conversation, the biggest call-out is not to jump on the bandwagon for the sake of it, they need to be able to bring something to the table for it to resonate with consumers. If done successfully, brands playing in the NFT space can help drive awareness through placement and positive sentiment through association.
Is it worth the gamble?
Like any re-brand, product launch or campaign activation, there is always some element of risk involved. Taking marginal risks are important to a brand as it’s either a success or a learning, but these risks should be separate from a brand’s existing marketing initiative.
There are a few questions brands need to ask themselves before going ahead. Firstly, they need to be able to address a certain business case. This ultimately helps brands think back to their objectives and why they are putting budget behind certain initiatives. Stakeholder alignment is crucial, especially in the legal and technical space. Finally, brands should lean into creating something new for this unique environment; something which is playful and impactful and truly distinct to an NFT.
What does the future hold?
An interesting opportunity to look out for in this space is how Facebook’s Metaverse will play a role in NFTs. One of the future features within Metaverse is the opportunity to facilitate conferences. NFTs could be sold to metaverse participants attending these conferences as one example. It’s still to be solidified how Facebook’s Metaverse plans to use NFTs but is something that will likely be a big propeller in NFTs and other cyber-services for 2022 onward.
Further information and education around NFTs will continue to unravel as the topic continues to grow. As an initial step, brands should further educate themselves around NFTs and begin discussions with their legal, technical, marketing and creative teams to understand if this is an opportunity worth exploring.
As a brand lead, marketer, NFT fanatic or just a consumer, what are your thoughts?
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frog is a leading global creative consultancy, part of Capgemini Invent.Find out more