NFTs in action: how brands are capitalizing on the hype
NFTs have been integrated into brand and marketing strategies and they are helping brands build new connections with consumers and drive conversion. Noma Mangena, associate consultant at Frog, considers their influence, which follows on from previous blog post Should brands gamble on NFTs in 2022?
Frog on the prospective opportunities available in the NFT space
An NFT (non-fungible token) is a digital asset that represents a real-world object such as art, audio or even real estate. Each token is completely unique and supported by blockchain technology ie cryptocurrency. They represent exclusive ownership rights, as well as a certificate of authenticity to the digital asset. Some people buy NFTs as collectibles, while others see them as a form of investment, which they then sell on.
Influenced by the resurgence of cryptoart in 2021, NFTs have become the new buzzword for marketers. As such, brands from across industries have started to use NFTs to raise awareness, fund a cause or even aid product launches.
NFTs can be an invaluable marketing tool when used correctly. Here are three examples where they can be used to drive impact:
If done correctly, NFTs can help organizations build their brand and raise awareness of their vision or goals. Take Nivea – as part of their #CareForHumanTouch initiative it released a series of limited-edition, free NFTs in partnership with an artist who experienced a temporary loss of sight. The ‘value of touch’ NFT artworks helped bring attention to the power of human touch and were part of a larger goal of investing €20m in projects, which positively impacted over 150,000 people.
It is important organizations align NFTs with the brand and its purpose, vision and values, just like Nivea. Research shows the majority of interest or purchase of NFTs comes from millennials between the ages of 18-24 – therefore depending on your current consumers, this can be an opportunity to capture a new audience or develop stronger connections with your current one.
NFTs can be a value adding tool to your marketing strategy by offering consumers a clear differentiator from your competitors. They can help improve consumer experience and build a community by creating a new way of engaging with consumers. Gucci, in collaboration with Superplastic, created a three-part series of limited NFTs to promote the release of a new collection. The NFT came with an exclusive ceramic sculpture, the SUPERGUCCI, and to encourage interaction with its audience Gucci launched a Discord channel to encourage conversations on the metaverse.
Using NFTs to build out these communities and encourage interaction with consumers is particularly important as they enable data collection opportunities, which brands can then use to gather insights and enhance their marketing strategy. Opportunities like this are becoming ever more important as we begin to move into a cookie-less future.
It’s also worth remembering that brands that integrate NFTs into their marketing plans have an opportunity to educate their audience on NFTs and their value proposition, which can help drive even more engagement for the brand.
Pizza Hut Canada created a series of pixeled pizzas on Rarible, an NFT marketplace, as part of a marketing campaign to promote a special offer on four recipes available at the restaurant. For $0.18, pizza enthusiasts could get a digital slice, with some then being resold for $8,824.
As we saw earlier, the resurgence of NFTs was driven by cryptoart, showing that intriguing and visually-pleasing art helps consumers remain interested and captivated. Building campaigns around NFTs can be a good way to raise immediate awareness or talkability using the uniqueness and scarcity of these tokens.
However, prior to venturing into the world of NFTs, there are several considerations brands need to be aware of. Cryptocurrency isn’t represented well within government and regulation, so the increased move of large brands into this space poses a question as to how regulation will play in this area. Along with this, operating within a decentralized space brings fraud concerns. A prime example is the case of Hermès, which sued the creator of the ‘MetaBirkin’ bag for using the brand’s identity in selling NFTs.
Essentially, the future of NFTs is an exciting one. Whether they help to build a brand vision, enhance marketing strategies or enable brands to raise awareness through eye-catching, award-winning campaigns, NFTs have the potential to propel brands to new heights. However, for those looking to enter the NFT space, organizations must consider all elements, which includes getting to grips with the lack of regulations that encircle NFTs, and the multiple risks associated with them.