It’s a JPEG… It’s a digital collectible…It’s a NFT!
Marketers have been caught off-guard by the rise of NFTs in 2021. They are curious, excited, and dismissive — all at the same time! NFTs went from an unknown obscure section of the crypto space to the hottest trend in a matter of mere months. The trend was triggered by cryptopunks and NBA Hotshots and accelerated by bored ape yacht club (BAYC) and the brands like Coca-Cola and Anheuser-Busch jumping in with their NFTs lending deep legitimacy to the space. A lot has happened but it is still very early days and the potential of NFTs are only starting to be discovered. In this article, we will help you understand NFTs and focus on how they can be leveraged by marketers to drive key marketing objectives across the entire customer lifecycle.
What is an NFT?
A Non-Fungible Token (NFT) is a digital asset that lives on a given blockchain outside the control of any single individual, institution, or state. Each NFT is unique and is not interchangeable with another NFT, hence “non-fungible”. What sets an NFT apart from a digital certificate issued by a centralized entity is that an NFT owner can freely transfer, trade, or sell it to anyone in the world in a matter of seconds without needing anyone’s permission. The ownership is absolute, unique, easily verifable, and trivially transferrable. Therein lies its true power. To summarize the key properties of NFTs are: Ownership, Scarcity, Verifiability, and Uniqueness.
Why you are wrong about NFTs
NFTs came into their own while trying to tokenize digital art and empowering and enabling the artist community. This drew praise from several quarters but also drew severe criticism: “JPEGs are being sold for millions of dollars”, “Here, I just right-clicked and saved this million dollar NFT for free.” While, these criticisms may have some validity, they distracted everyone from the true power of NFTs: absolute unfettered verifiable ownership of a unique digital asset. This singular property will be leveraged to unleash entirely new categories of applications never possible before across gaming, digital collectibles, physical-world ownership, ticketing, and access NFTs. In this piece, we focus on exploring the application of NFTs to drive marketing objectives.
What do NFTs mean for marketing?
NFTs are unique, verifiable, scarce, and owned digital assets that can be leveraged by brand marketers to increase brand awareness, drive adoption, infuse loyalty, and promote advocacy!
A brand that rewards its customers with Access NFTs attached with perks is giving them a branded digital “thing” that they truly own. This sense of ownership increases the affinity the customer feels towards the brand. It makes the customer feel empowered because they are free to keep, transfer, trade, or sell the NFT at-will without needing permission from the brand. Imagine your airline allowing you to own your miles — your affinity to the airline will increase significantly.
Furthermore, because customers can freely trade the NFTs, an organic unfettered secondary market emerges in which the NFTs trade multiple hands and land in the hands of individuals who value the NFTs the most for the brand association and associated perks. In the process, the NFTs have exchanged multiple hands, in other words the brand has touched multiple people. In a regular giveaway campaign the giveaway might touch x persons, but with a NFT giveaway the same campaign has the potential to touch 10x persons!
If one or more perks are attached to the NFT, the brand gives the NFT holders reasons to come back to it to redeem the perk and that is an opportunity for customer engagement and to get to know them. Since the NFTs landed in the hands of the persons who value them the most, the brand is talking to its most valued customers!
Marketers can also create exclusive NFT-gated communities that can be access only by those that possess the right NFT. This creates immediate exclusivity and scarcity increasing the appeal of the community. Because the NFTs landed in the hands of the customers that value it the most, the quality of participation and conversation in the community achieves new heights. Additionally, if a community member no longer values the brand, they are free to transfer or trade the NFT to someone else who values it.
In sum, NFTs can play a role in the entire customer lifecycle and allow a brand to promote loyalty and continue to identify and serve its most loyal customers in a very organic way. Most importantly, the impact of every single marketing dollar can be assessed very directly. In traditional marketing, performance of brand awareness spend cannot be measure. However, by throwing NFTs into the mix, brands can see exactly how many people acquired the NFT and then trace it throughout its lifecycle to measure the exact revenue impact of every single marketing dollar.
At Sesame3, our core thesis is that “NFT Marketing” is rapidly emerging as a powerful marketing channel that innovative marketers will leverage to create outsized value for their brands as well as their customers! Email us at firstname.lastname@example.org to learn more about how we can help you leverage the power of NFTs to elevate your brand and engage your customers.