Atul Sharma from Ruder Finn sheds light on the growing importance and expansion of NFTs and explains how marketers are being a part of the trend in this digital age and time.
The year 2021 was the year of non-fungible tokens. The phenomenal expansion of NFTs has everyone talking. With every business slowly and steadily adopting this technology, it may potentially surpass the popularity of Cryptocurrencies such as Bitcoin. Whether it is the sports, art, gaming, music, or the film industry, they are all jumping on the NFT bandwagon. While FOMO is real for the ones who haven’t. It looks like everyone wants to be part of this revolutionary trend.
We are shifting from the marketing predominantly inflated by mass media to person-to-person communities. NFTs, bring exciting new possibilities for media distribution, monetization, and management for brand marketers.
NFTs represent anything digital that is unique to the owner and has value. These digital assets are stored on the blockchain. In a disruptive ecosystem like today, NFTs change how we produce, distribute and share content online. NFTs are an excellent tool for brands to raise awareness, create a buzz around a product launch, and build digitally owned story narratives. Take Adidas, for instance, which launched virtual wearables that buyers can use on online platforms in its first collection of NFTs titled ‘Into the Metaverse’. Or Nike acquiring virtual sneaker company RTFKT.
The exciting thing about NFTs is that their expanse does not end at celebrated brands.
A classic example is Amrit Pal, a designer from Delhi, who minted his first NFT in February 2021. Over 9 months, he earned over 1$ million by selling 57 such NFTs in the form of toy faces. In one of his quotes during an interview, he shared how he made three-four years’ worth of work in seven months.
Do you sense the changing power game that NFTs bring to the table of the fourth industrial revolution?
Looking Beyond the Target Demographics
In this digital era, companies are battling for differentiation across platforms and against competitors to reach higher visibility and quality engagement. Currently, brands only engage with target demographics through ‘digital 1.0’ means, like Facebook or Instagram ads, and that is where NFTs come into play. While broadening the scope of opportunities, brands are beginning to deepen their engagement with current and potential customers by creating unique and exclusive experiences for the users.
The exclusive content can be set up as a limited-time experience or a lifetime content that the audience can only access with the ownership of the brand’s NFTs. This will allow consumers to have a new way of interacting with the brand in the digital ecosystem.
The New Revenue Stream for Brands
NFTs open a whole new revenue stream for brands by selling goods in purely digital forms. They can monetize ads multiple times by turning them into NFTs and further their equity via storytelling and collectible assets. NFTs have become an essential strategy for attracting today’s consumers. Many brands also use proceeds from NFTs and donate them to charity, making it an excellent way to instill the brand as an asset to the community. Unlike physical goods, NFTs can include a smart contract that codes in a royalty percentage designated by the content creator. As such, subsequent sales or auctions of NFT can generate revenue for the original NFT creator, providing an ongoing potential revenue stream as it is sold or auctioned.
Customers, today, want to understand the story behind a brand, the values its holds. Individuals wish to relate to these values and accept the brand. Creating NFTs for a brand is a way for them to show their customers that they are listening, willing to adapt, and deliver in a way that is appreciated by them. To tap into the true potential of NFTs, a far wide-reaching consumption experience needs to be created. An experience that can accrue broader social significance and its values transcend beyond expressing the owner’s identity.
Brands are exploring ways to go above and beyond to reach their target audience through innovative and interactive ways. What we are witnessing right now is just the tip of the iceberg as NFTs will become a leading form of engagement between brands and their communities. There is a revolution brimming!