NFTs: The new brand loyalty model
What it means for brand awareness and your marketing strategy
Hello there!
Happy new year! By now, you probably heard of NFTs, let it be with Sotheby’s record sales, or your co-worker trying to convince you to buy this really really weird rendition of his sequel to Lord of the rings, or this very creepy AI bot living on the blockchain, (even though eerily too close to the 1995 sci-fi Ghost in the Shell film to my opinion — Go check it out). For those who have been living under a rock, NFTs (Non-Fungible-Tokens) are digital assets which ownership can be verified on the blockchain. Think of a picture that has a unique number of prints and whose owner can be verified instantly without fraud. For a crash course on crypto and blockchain see here.
Robert Alice x Alethea AI - on sale for $478,800
This recently caused NFT marketplaces to bloom (800% past $3 billion for Open Sea alone). We saw the rise of a lot of funny use out of it, making lots of people sceptical about its true value. RTFKT raised $3.1 million from shoes you can't even wear (eventually acquired by Nike last month). But more importantly…
What does it mean for your marketing strategy?
While a lot of people are speculating on the volatility of NFT prices with for-profit motivations, few understand — from a tech perspective — NFT’s many potential applications and what it will inevitably mean for brands, marketing strategy and brand awareness.
NFTs allows for a new form of brand storytelling and consumer interaction (engagement), which are the two keys to a strong marketing strategy. It is still in its infancy at this point, but as mentioned, we can already see mainstream brands dipping their feet into it. Givenchy partnered with digital artist Chito to create a series of NFTs which profits go to charity and Adidas just announced a mysterious partnership with Coinbase.
What is going on?!
Web 3.0, that’s what is going on. With Web 2.0 (driven by three layers of innovation are mobile, social and cloud), you buy physical stuff online. With Web 3.0 (open, trustless and permissionless networks) you buy digital stuff in a digital world. Today it’s like trying to convince someone in 1992 that e-commerce will revolutionize the trade industry: most people are a little sceptical (everyone was accustomed to brick-and-mortar, and the internet was not mainstream). But we all know what happened next: mass adoption.
There are many other differences between Web 2 and 3 going beyond the scope of this post. But focusing specifically on marketing and brand use, here are a few ideas on how NFTs can be integrated into a marketing and brand strategy.
Collectables
We like to collect things. Ownership is just part of the human culture. Let it be the series of toys in a cereal box when you were a kid, Pokemon or baseball cards, or these pants you want in 4 different colours: gotta catchem’ all. The same is applicable to NFTs.
Nike is already getting ready to enter the metaverse by filling for “virtual goods” trademarks to brand NFTs. Entitled Cryptokicks, you will be able to buy Nikes to dress your digital self in the metaverse. Company-side, this would lead to revenue diversification, and it is possible to see how we will see a line for digital goods and physical goods on Nike’s future balance sheets.
Budweiser with its Budverse, created and sold a series of 1936 NFTs issued from classic photos and ads. Originally priced between $499 and $999 per token, these give their owners special perks and exclusive benefits… but we don’t know what these will be yet. These can now be found on Open Sea for ETH 0.3-0.5 ($1235-$2000 at time of writing). You still need to be +21 to be able to buy a Bud.
Even in a digital one. #surfresponsibly
Customizable digital goods
Another outcome is to package different goods depending on the token purchased. This is exactly what the music band Kings of Leons did when they released their album “When You See Yourself” in March 2021. Bringing in around $2 million in sales shortly after its launch, this unique album release allowed fans to choose from three different types of tokens. They could choose between a special album package, benefits coming from live shows, or exclusive audiovisual art. There is even a “Golden Ticket” The holder could redeem four front row tickets to ANY Kings of Leon headline show, anywhere in the world, once per tour, along with meet and greet, backstage pass, and limo service… For life. Originally sold for ETH 50 ($3700 at time of writing), it is now on sale by the original buyer for ETH 369 — $1.3M! Because NFTs can be transferred and resold.
Memberships
The great thing about NFTs is that they are essentially smart contracts, and therefore programmable: “if this condition is met, this happens” = if John owns this specific NFT, he can get 2x VIP tickets to the Dodgers game at the playoffs. Yes, it is similar to the Kings of Leons example. But it could also be your gym membership. Instead of a gym card, you could get an NFT programmed with the package you purchased with an expiry date. Companies like Kred provides this service for brands like Nivea, Arbys, G&E, etc… The possibilities are truly endless.
Giveaways
Giveaways are an interesting feature in brand marketing, as they allow:
customer engagement: the customer needs to have direct interaction with the brand, let it be a contest or a purchase.
brand recall: what you are giving away not only creates an emotional bond with the customer but also he/she will think about your brand each he sees the item, leading ultimately to brand recognition and consideration;
purchase stimulation: this discount pass gives you 10% off any purchase for the next 6 months at this store. You are encouraged to buy within a time limit to this store in order to get the discount. #blackfriday
Applied to NFTs, it is easy to see how they can play within the consumer good and restaurant industry. Take Starbucks for instance. Without wanting to sound too “pumpkin spice” seasonal, Starbucks could create a giveaway NFT series of unique artwork of the coffee cup design of the moment available for a limited time given when bought at a specific location (freebee collectable —make it localised, even more unique!). Or it could be a purchasable NFT offered by the cashier giving 10% a year on every coffee bought (membership model).
For PR purposes, it could also be an exclusive one time purchase for a limited time giving unique perks, such as lifetime free coffee on the 1st of the month. These NFTs once acquired or redeemed, could be sold or given by the owner through NFTs marketplace like OpenSea.
Supply chain
NFTs are not just applicable to consumer products. There are also lots of enterprise-level use cases. A lot of these enterprise NFTs (also called ENFTs) can be used to represent ownership and track assets through systems such as SCM, ERP and CRM software. It can be used to verify the authenticity of a product or record ownership rights. Think of an expensive Gucci purse you bought, and are now reselling. You give the new owner the linked NFT confirming you did not steal it, that it was indeed yours in the first place, and confirming that it is also indeed a Gucci purse.
Another use is real estate for instance. If James gives $1 million to John, then James becomes the owner of John’s house. In fact, TechCrunch Founder, Michael Arrington’s already sold his apartment in Kyiv through Propy, a real estate management platform functioning through NFTs.
To close — As nerdy and techy NFTs might sound today, it is pretty clear to see why from a technological standpoint these are here to stay. Even Neil Patel says so. From brand awareness to customer retention, NFTs offer multiple touchpoints on your marketing funnel, that becomes It all comes down to ownership, customization, transparency, and wanting to control and own in a few swipes. The same, face of marketing has changed with the mass adoption of the online ad buy, we will see the same with NFTs mass adoption, as they are the next evolution of digital ownership.
Food for thoughts
The beginning of the year is always a great time to look at what we’ve accomplished in the past year, and set new goals. If you are a little bit of a perfectionist this exercise can be very difficult. Because you focus on what you missed and enter the vicious circle talking yourself down. Changing your mindset is part of your growth. While assessing this year’s goals, if you are one of these perfectionists, shift your mindset as follow:
Prioritize what is important, instead of thinking you don’t have enough time;
Tell yourself you just haven’t figured it out yet, instead of thinking you cannot get it right;
Ask yourself what it is teaching you, not why it’s happening to you;
You’ve been redirected not rejected.
In the Far East, it is said that energy always has a direction. You go right, left, backwards, forwards etc… The only moment energy has no direction is in death. This is why it is always important to keep moving (preferably forward), with ideas, goals and yourself.
Good reads of the month
The Good Tech Award // New York Times
What happens to your crypto when you die // Bloomberg
The Storyteller // Dave Grohl’s (Nirvana/Foo Fighters) memoirs
NASA launched an $8 billion telescope… in space // Quartz
Martha Stewart rolls out NFTs // WSJ