NFTs have been making big headlines in recent months, with brand managers and digital marketers following the first innovators with interest. There has already been some experimentation by popular as well as more niche businesses with NFTs used as digital products, charity fundraisers, and exclusive tokens that can be redeemed for both digital and physical rewards, with many reporting successful outcomes. The only problem is that most of us haven’t even heard of NFTs, let alone considered how blockchain, non-fungible tokens and cryptomedia could impact popular commerce industries. So what is an NFT?
NFT simply stands for non-fungible token. Because it’s non-fungible, this token is unique and therefore cannot be exchanged for another equivalent token – such as a cryptocurrency like Bitcoin might be exchanged like for like. An NFT can represent anything from images, videos, audio and event passes. Coded data about who created a particular NFT is stored in a blockchain, essentially a public record of the provenance of a digital asset. With proof of ownership, cryptomedia that have been made into NFTs can be seen as digital collectibles and therefore gain value and saleability.
Digital products
The COVID-19 pandemic accelerated the amount of time many of us spent in the digital sphere whether it related to work, social events or shopping. Furthermore, with a rise in social media, gaming and streaming platforms many younger generations are heavily reliant on the internet for much of their social interactions and entertainment. So with so many people living their lives digitally – why is there still so much resistance to digital products such as NFTs?
There have been examples of NFTs created for gamers, who can purchase unique items or costumes to enhance their gaming experience. Big makeup brands were creating virtual makeup that could only be worn on platforms such as Zoom or Teams. However, it may still seem fruitless to many to own a digital asset that has no practical usage and can be legally duplicated and reused by any other person on the internet. And yet NFTs have seen a massive rise in production and purchases. Perhaps because the NFT itself can be considered as a certificate of authentication, and is almost more important than the digital asset it represents. There is some concern, however, that this surge in popularity is being driven mostly by niche digital communities rather than a true rise in public demand. Whilst NFTs are far from being mainstream commercial products, that hasn’t prevented big brands from jumping onto this new trend.
Kings Of Leon
Whilst not a typical “brand”, musicians often build a strong and loyal following which helps them to sell everything from new music to merchandise and concert tickets. Kings of Leon were the first band to release an album in the form of an NFT. Three types of tokens were made available, each allowing the purchaser access to special album packages, live show perks or exclusive audiovisual content. The limited availability of the “When You See Yourself” album NFTs meant that fans were able not only to purchase exclusive content but the ownership of a digital collectible. This helps to build excitement around the album release as well as offering a unique way for fans to connect with their favourite artists.
Team GB
In the run up to their Tokyo Olympics bid, Team GB turned to NFTs to generate support and offer unique collectibles for fans, most of whom were prevented from attending due to the COVID-19 pandemic. Some of their offerings included “gold medal moments” which used unique cryptographic keys for authentication, as well as pin badge NFTs and NFTs of wall paintings by resident Team GB artist Ben Mosley. These NFTs gave fans a chance to own a piece of sporting history as well as to support their team at the same time. Some of the profits also went directly to the British Olympic Association which currently doesn’t receive any government funding. It seems very likely that other large organisations reliant on fundraising will turn to NFTs as a way to gain momentum from audiences.
NASA
Even NASA has shown interest in NFTs! After designing a one-of-a-kind wristwatch in collaboration with Richard Danne “Father of the NASA Design Program”, they decided to sell it using an NFT. Whilst the purchaser will ultimately receive the real life watch, they must first buy the NFT. This NFT functions as a digital token that gives access to a physical product, as well as some exclusive extras such as secret video clips. To some this process may seem superfluous, however for people buying luxury items as well as collectors, this adds an extra level of excitement to the experience along with exclusivity. After all, each NFT is a unique product in itself.
Looks Labs
This Berlin based company aims to bring traditional beauty users into a digital beauty space, by collaborating with artists and engineers to create new cyber beauty products. These products can be purchased as NFTs. The latest creation by Looks Labs is a Cyber Eau de Parfum. Whilst this obviously cannot be worn or smelt the product does present some unique concepts that could be used by other brands in the future. Using near-infrared spectroscopy, they recorded molecular vibrations of the physical perfume, including the bottle itself. Whilst they dubbed this a digital reflection of a physical scent, there is potential for the data to be reverse engineered, meaning the owner of the NFT could recreate the perfume in real life.
Beeple
Beeple may not be a name that you would associate with the likes of Monet or da Vinci, yet this digital artist recently sold his work at the iconic Christie’s auction house. This was the first sale of an NFT at Christie’s, and it sold for around $69 million. The NFT represented a piece of cryptomedia called “Everydays: the First 5000 Days” which is a collage of 5000 images created by Beeple for an artwork series of his. The collaboration between Beeple and Christies has added a new legitimacy to digital artwork and the NFT format, showing that it has potential to become a popular market in the future for both collectors and investors in cryptomedia and non-physical products.
Should more brands invest in NFTs?
It could be easy for brands to dismiss NFTs as a niche market or fad that they cannot utilise effectively in their marketing campaigns. However, NFTs are set to have a far more profound effect on the digital space in which businesses and customers operate. By acting as provenance for digital assets, NFTs allow true ownership over cryptomedia for the first time. This means that the issue of the reuse and unregulated circulation of intellectual property online becomes redundant. As long as an asset is owned as an NFT, then it’s real-life value will increase as it’s popularity and presence in the digital space increases.
Brands can use NFTs to provide unique experiences that enhance the way they tell their stories to customers, and interact with them in digital spaces. Not only are they able to act as tokens that can give customers access to unique products or services, they hold their own value making them sought after collectibles. Take the Gucci Ghost, for example, which sold for over $3000 with the value likely to increase due to the nature of each non-fungible token being unique. Or the Nike sneaker authentication system “CryptoKicks”, which pairs physical shoes with NFTs, allowing sellers to prove the authenticity of the real shoe. Nikes non-fungible tokens are also able to be spliced together to create a new CryptoKicks NFT which can then be made into a real pair of shoes. Whilst NFTs hold excitement for customers because of their relative newness and creative possibilities, they have long-term value too.
Since NFTs are often likely to appreciate in value over time, some brands are already releasing cryptomedia collectibles linked to their logos or products. This allows more people to interact with the brand in digital spaces as they showcase and trade NFTs. In terms of brand longevity, it makes sense to invest time in the latest digital trends, especially the ones that look set to stay.
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Written and researched by Paige Elford, Digital Marketing Graduate
