Content partnerships, personalisation, engagement, brand experience, customer relationships, purpose and cause-related marketing all stand to benefit from NFT, says Steve Wheen, Founder and CEO of Distillery.
Along with all the talk of the metaverse, last year saw the term NFT – non-fungible token – vaulted from chatter in geeky online forums to mainstream media coverage all around the world. While most people had never heard of these unique digital tokens, we had a stream of news items about NFTs being sold with eye-watering price tags.
Artist Beeple sold an NFT artwork for $69.3m – becoming the most expensive piece of digital art to go under the hammer – Tim Berners-Lee sold his web source code NFT for $5.4m, and Jack Dorsey put his March 21, 2006 tweet "just setting up my twttr" up for bid and sold it for $2.9m.
Many brands rushed to embrace NFTs. The likes of Disney, Taco Bell and Coca-Cola all created digital collectibles and sold them as NFTs. And we saw luxury brands Gucci, Dolce & Gabbana, Ralph Lauren and Balenciaga all launch NFT collections in the metaverse. Even major sporting bodies saw the potential for NFTs. NBA Top Shots became a talked about marketplace selling short highlights of some of the NBA’s most memorable games at NFTs.
Not surprisingly, some commentators were incredulous at the money people were paying for these one-off digital assets, dismissing NFTs as the latest fad. But if you look beyond the hype – and the price tags – NFTs could represent a huge opportunity in content marketing. Each token has a unique and transparent ID and this could unlock a fundamental change in the relationship between content creator, consumer and brand.
An NFT is a form of cryptocurrency. As the token is ‘non-fungible’ it means that the digital product it’s associated with cannot be replaced by an identical item, making it unique and potentially valuable. NFTs can range from digital art, wearables and objects in virtual environments through to music and video files. As NFTs are registered on an open blockchain ledger, key identifying information is recorded, including ownership, previous sales prices and quantity in existence.
The ability to create and sell unique digital work is a gamechanger for creators. They have a never-before-seen opportunity for control over ownership and distribution of their work, plus a view into its life cycles. And it potentially opens up a wealth of new partnership for brands looking to win new fans in the digital space.
Content creators and brands can collaborate with new rules of remuneration – sales via blockchain networks - ownership and sharing. Multiple parties can work together united by an NFT, fusing everything together into a unique token. We are just starting to see these partnerships, but they herald NFTs going from the noise of 2021 to new strategic ways of content creation and distribution starting this year.
The most obvious opportunity that NFTs represent for brands will be creating and selling assets. Digital sneaker brand RTFKT last year made $3.1m in sales of crypto collectibles, and was then snapped up by Nike. The potential for unlocking new revenue streams has undeniable appeal, but the brand loyalty and engagement NFTs represent – a lifetime of value and storytelling tracked on the blockchain ledger – has longer term advantages for content partnerships and marketing.
Brands can create imaginative NFTs that can be given away through contests and promotions. A whole new level of personalisation becomes possible with NFTs due to their uniqueness, with brands able to create individual items, tailoring unique content and helping people with self-expression. Last year Burberry released its collection of NFT accessories for multi-player game Blankos Block Party, but imagine the engagement potential of Burberry or another fashion brand partnering with an artist or designer to reward its customers with personalised digital gifts.
NFTs present an opportunity for brands to completely up their game with loyalty and experience. With unique IDs, NFTs can be used as membership cards or as forms of payment, creating new potential for CRM programmes, rewards and retention. NFTs can store data that traditional loyalty programmes simply can’t – NFT platform POAP takes advantage of this by connecting event goers with authentic and rewarding experiences. Last year, much was made of Kings of Leon releasing their new album as an NFT with a package that rewarded fans with exclusive bonus tracks and videos.
While it is still clearly early days, brands across many different categories will be able to use NFTs to boost their approach to fandom and community. Brands are now presented with exciting opportunity to create and support new communities around NFTs and use the unique identifying properties of these tokens to drive community empowerment. For example, brands can tap into DAOs (Decentralized Autonomous Organisations) – these are groups represented by rules encoded as a transparent computer program and controlled by the organisation members.
Some of the most successful NFTs are powered by a DAO structure. Every DAO has a mission that’s clearly articulated and adhered to by the community. This means that DAOs can go beyond profit to purpose and mobilising communities for positive causes. In fashion, arguably the best known DAO is Red DAO which has a mission to supports digital fashion designers and collects items that they think will go up in value.
Brands are already seeing the potential for NFTs to support their purpose-related activities. Last year both Charmin and Taco Bell auctioned off themed art to support good causes. Taco Bell’s 25 NFT gifs were put on Rarible with a starting price of $1. They sold within 30 minutes, with one going for $3,646. All proceeds went to Live Más Scholarship.
The potential for brands to embrace NFTs is clear. Content partnerships, personalisation, engagement, brand experience, customer relationships, purpose and cause-related marketing all stand to benefit from NFTs. But we are just at the beginning of this journey and it’s hard to predict exactly how content marketing in world of NFTs will evolve. Certainly one of the biggest obstacles to overcome is consumer awareness. Blockchains, cryptocurrency and digital wallets are still alien territories for many consumers, and in the US and UK about half of all adults have never heard of NFTs. Brands will need to test and learn, and all parties involved in NFTs will have to inform and inspire consumers.