NFT: The next big thing in digital marketing?
FROM CHRISTIE’S $69 MILLION SALE OF A DIGITAL WORK OF ART TO JACK DORSEY’S $2.9 MILLION TWEET, OVER THE PAST FEW WEEKS A THREE-LETTER WORD HAS TAKEN THE WORLD BY STORM: NFT. THOUGH STILL A NASCENT TECHNOLOGY, MANY BELIEVE NFTS AND THEIR UNDERLYING BLOCKCHAIN TECHNOLOGY WILL RADICALLY RESHAPE THE FUTURE OF BUSINESS. IN THIS ARTICLE, WE’LL LOOK AT SOME POTENTIAL NFT USE CASES FOR BRANDS, PARTICULARLY IN THE REALM OF DIGITAL MARKETING.
What’s an NFT? NFT stands for “non-fungible token.” The opposite of a fungible token, which can readily be swapped, a non-fungible token is a digital asset defined by its unique properties, and thus non-interchangeability. Because NFTs are minted on blockchains, they’re individually equipped with a unique proof of ownership that is both secure and decentralized. They also feature “smart contracts” that enable their creators to receive royalties from every future resale, depending on the contract’s structure.
The first wave of NFT adoption has consisted mostly of digital collectibles, with NBA Top Shot being one of the most successful examples. The platform allows fans to buy, sell and trade numbered versions of video highlights from NBA games, the digital equivalent of a physical basketball trading card system. A LeBron James highlight, for example, was sold for $200,000, and the platform has generated over $308 million in gross sales.
NFT technology has prompted other brands to dip their toes into digital collectibles, as well. Fast food giants McDonald’s and Taco Bell, for instance, were among the first to create campaigns around NFTs, selling digital Big Mac and Taco Art to their customers.
Will Millennials and Gen Z embrace digital collectibles and virtual ownership? The short answer seems to be yes: RTFKT, the first luxury brand operating in the NFT space, has been a runaway success, with its virtual sneakers selling for the same prices as haute couture. Kering’s powerhouse Gucci is also said to be releasing its own NFTs soon.
So, what are some takeaways with regards to NFTs in the context of digital marketing?
1. NFTs can be viewed as a way to directly connect to your fanbase: ownership is a powerful idea and establishes a closer relationship between your customer and your brand. For example, NFTs allow musicians to sell their music directly to the fans instead of going through streaming platforms.
2. NFTs can be anything digital: a JPEG, a GIF, a 3D animation, a VR artwork, etc. Your brand is no longer restricted to offering physical products or services, but virtual products.
3. NFTs eliminate business friction like shipping costs, product defect rates, and storage costs. They can therefore be a superior solution depending on your goals. Ultimately, luxury brands are not driven by selling physical products so much as by selling the brands themselves—so why not sell them virtually?
Are you curious to explore more about NFTs and incorporate blockchain technology into your business? Our consulting team is ready to help you spearhead a new era of digital marketing!
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