By David Tomas , published on January 25, 2022
If you work in digital marketing , you have surely heard of NFTs or "non fungible tokens" . Without a doubt, this has been one of the fashionable technologies of 2021, and it still has a long way to go.
NFTs have a lot of potential in the marketing world, but there is still a lot of unknown about them. What exactly do they consist of? How can we incorporate them into our brand? What are the most effective strategies for doing non-fungible marketing? We explain all its keys.
NFT stands for "non fungible token" and refers to a digital asset that is unique and unrepeatable in the world . NFTs use blockchain technology (the same technology used by cryptocurrencies) to generate a unique and private key that identifies the digital asset. Currently, most NFTs are based on Ethereum technology.
The operation of NFTs is based on tokenization , which consists of using the blockchain to identify a digital asset through a series of metadata that allow its value to be identified and guarantee its veracity. By tokenizing a digital file, an original certificate is obtained that attests that it is unique and differentiates it from the rest. In addition, it also indicates the ownership rights of said file. This process can be done with all kinds of objects: pieces of art, music, animations, videos, tweets, digitized real-world objects, virtual items, and much more.
These are the main characteristics of NFTs:
- They are unique or only available in a limited number.
- They are totally personal, for example, you cannot buy the NFT of a work and share it, since they are assigned to a single owner.
- They are registered and encrypted in the blockchain, which protects them against fraud.
To understand it better, we can draw a parallel between NFTs and the art world. In traditional art, the original of a work is the one that really has value. But in the case of digital files, as unlimited copies can be made and all of them are identical to each other, this concept of originality is lost. Well, we could say that an NFT is the "original" of a digital asset.
The first to use this technology have therefore been artists and content creators, to provide original content. Through the NFT, the artist shares a license of use for whoever buys their content, but retains original ownership. Every time the NFT is sold, the artist receives a percentage of the sale. In this way, digital artists can market their content directly and control its distribution and monetization.
Although NFTs were initially used mainly by artists and collectors, they have been extended to other areas, such as digital marketing . Brands and companies have started to tokenize their products, their content or some specific parts of their digital assets.
In content marketing , certifying a video or audio created by the brand with an NFT is very simple and helps protect this asset against theft and copying. The company can maintain ownership of its content without restricting its free movement over the internet.
Another very relevant use of NFTs for brands is to create limited edition digital objects . In this way, the brand can stand out from the competition, improve interest in its products and services, and increase brand awareness, all of which help increase profits and revenue.
When incorporating NFTs into digital marketing, there are several aspects to consider:
- It is possible to create NFTs from any digital item, such as a JPEG, a GIF, a 3D animation, a virtual reality or even a tweet. This opens up a wide range of possibilities for brand catalogues.
- NFTs facilitate a direct connection with fans and customers of the brand. The customer may own a small part of the brand, which fosters an emotional relationship with it.
- NFTs eliminate many expenses derived from the activity of companies, such as shipping costs, returns of defective products or the need to maintain warehouses with stock.
Because there are opinion leaders and companies that highlight the disadvantages of this technology, it would be important to know not only the pros, but also the cons:
- Be non-tangible assets . They are works of art that live in a computer network and, in essence, cannot be considered as an object in itself.
- It takes a long time to create decentralized applications for NFTs .
- The market for NFTs is generally new . Therefore, NFTs are not used as much as fungible crypto assets. This is why understanding NFTs can be difficult for people who are new to crypto and blockchain.
- There is potential for loss when one buys an NFT in the hope of making money by selling it for a profit. If the market goes flat, the buyer will experience a loss.
- The carbon footprint of crypto art and NFTs. Blockchain technology consumes a lot of energy for its creation.
Nike has obtained a patent for a pair of sneakers compatible with the blockchain, the CryptoKicks. When buying a Nike shoe, the customer receives a tokenized digital asset, in addition to the physical product itself.
- Pringles announced on Twitter its new flavor: CryptoCrisp , a digital and virtual potato chip. This product was distributed in a limited edition of 50 units, with the starting price of a can of Pringles.
- Pizza Hut was one of the pioneering NFT brands with its virtual "1-Bite Favorites" pizzas, which honored its classic margarita and pepperoni flavors. Their original price was 18 dollars, but they have been resold for 9,000.
- Formula 1 has taken advantage of the NFT push to launch its "F1 Delta Time" video game, in which players can collect non-fungible tokens from famous drivers and cars. A single share of the game sold for over $223,000.
- In the summer of 2021, the UK Olympic team launched a series of collectibles on NFT to support their athletes and offer fans a way to connect with them without being physically present in Tokyo. The collection included badges, murals by artist Ben Mosley, and five "gold medal moments," all of which were tokenized and authenticated with a unique cryptographic key. A portion of the profits went to the British Olympic Committee.
The marketing of NFTs is, in essence, very similar to that of any other product: we seek to publicize the existence of our NFTs among an audience potentially interested in them and accompany them on the path to conversion.
One aspect to take into account before launching an NFT marketing strategy is the characteristics of our buyer persona . NFTs are especially popular with a young audience that is highly interested in technology and art. If this does not correspond to the original audience of our brand, some creative repositioning may be necessary.
It should also be noted that NFTs are closely linked to the exclusivity and value of the concept, rather than the product itself. With NFTs, more than ever, we are selling the brand itself. Therefore, it is a strategy that must be accompanied by a well-developed brand image and creativity and product development must be in line with the fundamental values of the brand.
With that said, let's take a look at some of the most useful channels in non-expendable marketing.
Influencers have been one of the factors that have contributed to the popularization of NFTs, and as such, they are also among the most appropriate to make them known. In fact, during 2021 several influencers brought their own tokenized digital items to the market.
If you want to promote your own NFT through collaborations with influencers , remember that it is key to choose people who fit your brand image, who have an audience that corresponds to their buyer persona and who maintain a good level of interaction with them (more than a large number of followers).
Social networks play a key role in creating a community of loyal brand followers and thus generating an audience for their most exclusive products, such as NFTs.
On the other hand, this channel can also play a double role, since it can help us educate the audience about NFTs in general and thus increase the acceptance of this type of product.
Year after year, email marketing continues to be one of the most used channels by brands, as it combines great customization capacity with low costs and versatility that allows it to continue adapting to new marketing trends.
Before the launch of a new product, such as an NFT, informing your database with an email is a cost-effective and effective way to start spreading the word and generating conversions.
NFTs can provide great opportunities for collaboration between brands from very different sectors and also with the art world. For example, in the Pringles NFT campaign discussed in the previous section, the brand collaborated with Ukrainian digital artist Vasya Kolotusha.
There are also brands that have used NFTs for patronage, such as Asics, which has used auction profits from its NFTs to sponsor digital artists. Thus, they managed to enhance the brand image through corporate social responsibility.