The NFT scene is evolving rapidly in 2022 and is quickly gaining traction in the brand marketing space. It has created quite an excitement over the past year, with top brands testing the waters through their own NFT collectibles and limited editions crafted to build brand awareness.
Being a killer component of Web 3, NFTs could be a gateway into traditional commerce. The very technology that they run on is a base for the brands to reclaim ownership of customer centricity and sidestep the platform-centric marketing world of Web2.
The concept of NFTs in marketing can be challenging to grasp, but there are plenty of lessons to be learned from the brands that have already been there.
Let's dig a little deeper to understand what this craze is all about and how big names like Coca-Cola, McDonald's, Adidas, or Nike are making the cut.
How is NFT Advertised | The Cool Factor
Marketing a project may sound easy; creating attractive ad banners and sharing relevant content everywhere to grab the attention. However, given the limitations proposed by search engines and social media platforms, this is not the only strategy that will work for your NFTs. Remember that we are still at an early stage of adoption, and even top brands are experimenting with their tactics.
Take the example of Pepsi, which has been a brand with a strong heritage in pop culture and music since 1893. By launching its unique Mic Drop genesis NFT collection, it paid tribute to the storied history of the brand and the flavors that have attracted consumers over the decades.
Coca-Cola, on the other hand, came up with a collection of multi-sensory NFTs housed inside a Friendship box. Designed to add entertainment value and the cool factor, the surprise included a custom-designed bubble jacket, sound visualizer, and a friendship card bringing back the memories of 1948 artwork.
Speaking of the sportswear brands, Asics was one of the first to jump on the NFT bandwagon with a cool collection of limited-edition digital sneakers. It was described as a step towards building a future where physical activity is inspired by digital goods.
Nike isn't far behind with its recent release of Dunk Genesis CryptoKicks, which are apparently designed to be worn in the metaverse. How cool is that?
How is NFT Done | Business vs. Social Responsibility
Creating an NFT comes at a cost that may depend on the size and quality of the artwork. The digital items are minted into an asset on the blockchain, making them more secure, tamper-proof, and difficult to manipulate. It can be traded and purchased as virtual assets on NFT marketplaces, as well as digitally tracked when resold in the future.
With all the hype swirling around the next step in decentralizing the web, the uncertainty of NFTs cannot be ignored. Many brands and businesses hopped into this market, from Adidas to Gucci, seeing it as an opportunity to make the most of the trend.
The rise of decentralized communities has also led to a new way of thinking about sustainability and social responsibility. Many projects are preparing roadmaps to use NFTs for creating social value and improving the world around them.
One such example is Givenchy Parfums, which has launched a digital artwork that portrays diversity, the fight for equal rights, and the assertion of identity. This initiative to support the LGBTQIA+ cause perfectly aligns with the House's approach to promoting inclusion and diversity.
How is NFT Sold | Incentives
Primary NFT sales are going through the roof, while the secondary market has drastically increased over the past year. Almost 20% of the entire volume comes from the resale. Thanks to a few simple lines of code, an artist is automatically guaranteed royalties for every future sale of their work. However, the big question here is whether the prices will keep rising or stay put!
The trading in NFTs has seen an eye-watering surge in 2021, with the figures hitting $17.6 billion. This exponential growth can be attributed to the overall hype, but that's not something the brands are focusing on.
The future of brand building lies in the community that owns a piece of the success. Brands are looking to create a virtual economic system on the blockchain to reward their consumers, loyal fans, and active community members. This helps in garnering attention, driving engagement, and even generating revenue that can be infused back into the ecosystem.
Consider the example of Coca-Cola's collaboration with Tafi to take the branded experience to another level. The four multi-sensory NFTs featured a vintage cooler, a wearable bubble jacket, a Coca-Cola friendship card, and a sound visualizer.
The online auction fetched more than $575,000, with the highest bidder receiving a fully stocked Coca-Cola refrigerator in real. That's like paying over 1000x for a physical item. In fact, the same cooler is now up for resale on the secondary market for almost $4M.
These figures may sound overwhelming, but the real intention behind such campaigns is to take the iconicity of the brand and put a modern twist on it. Great things can happen when fans and communities make the brand their own.
The Problems
Blockchain is designed in a way that it prevents anyone from deleting or changing a record after it's created. It's a double-edged sword that may backfire in a way you can't even anticipate.
Ask McDonald's about it!
Little did they know that a racial slur recorded on the Ethereum blockchain would be traced by a trader checking out the exclusive McRib NFT sale. It was quite a backlash they had to face, and these NFTs have never been traded.
ArtStation, the popular showcase platform, stepping back from NFT proof-of-concept is another example of why brands need to proceed with caution. A majority of its users criticized the move owing to carbon emissions and energy consumption issues associated with blockchain networks.
Another persistent problem in this space is the authenticity verification of people involved in the brand collaboration. One such example is that of the Ownix platform, where one of the consultants was arrested for being involved in massive fraud related to cryptocurrencies. Football clubs like Manchester City and FC Barcelona had to cancel the deal immediately to preserve their image.
Conclusion
Any company in any industry can position itself for Blockchain adoption, but they need to be thoughtful about the integration. Looking at the numbers can be deceiving. What worked for your competitor may not work for you.
Brands like McDonald's are arguably too cash-rich to even care about selling their NFTs, but Hey, not everyone is Mcdonald's. This is why you need to leverage advertising platforms like Cointraffic that helps you to launch campaigns via Banner ads and Press Releases.
With the right professional assistance, you can reach out to a broader audience across several demographics. It's an exciting space to be a part of, and those who jump on the bandwagon will be rewarded big time. The choice is yours!