We have all heard about NFTs and the digital art marketing market. There’s been news of all kinds: from large investments to projects that fail. That leads us to ask, is it worth investing in the creation of exclusive content for certain users? Does this have some kind of added value for the brand?
What are NFTs?
First, let’s define what NFT is and what it is used for. An NFT is a Non-Fungible Token. It is a collectible piece that, as its name suggests, is not material. In other words, it is a digital item with a subjective value generated by its use and exclusivity. That translates into a price created by the same community that buys and markets it.
Now, what is so special about NFTs? We could say, “I can download an image like the one from the NFT with the same quality, the same signature, and for free.” While that is true, these items are so special because they are collectible and there is only one original. There may be many adaptations of the Mona Lisa, but the real one will always be found in the Louvre. Exclusivity is what users are looking for, as well as being the owner of an original piece.
Having an NFT is like having a unique Pokémon: a special gold edition that was only produced once. It may not have true economic value, and there may be hundreds of replicas, but the original has a value that no copy will have. That’s how Non-Fungible Tokens work.
Should your brand invest in NFTs?
Now that we understand what an NFT is, we can discuss whether it’s worth it for companies to invest in the creation of NFTs. Let’s start with the obvious: first, with NFTs, it is no longer necessary to offer products or services to customers in person. In addition, NFTs allow a new link to be created between the fanbase and the brand. Customers can show their brand love by purchasing original products directly. For example, a musician can sell their songs directly to a fan through an NFT, without going through streaming platforms.
It’s clear that an NFT is not a product, it is a brand itself. Pringles exemplifies this concept. They created a digital flavor called CryptoCrisp with 50 originals for sale. The GIFs started at $2 each (the price of an actual can of Pringles) and quickly jumped to $600 an item. Another notable example is the invention of Nike’s CryptoKicks in 2019. Nike created assets to manufacture digital shoes on the blockchain, which can be customized and manufactured.
Not all users want to simply collect NFTs. This is why some brands have chosen to add benefits to their items. For example, Adidas grants access to exclusive garments and access to the launch of future collections.
To have a real impact on the Crypto-market, we must show the world what makes our tokens special. According to Forbes magazine, there are 3 ways to give added value:
- Give access to an exclusive online community together with the NFT.
- Tickets to future events, online or in-person
- Opportunities for personalized forums with senior company officials such as the CEO or founder.
Also, you need to add a great deal of trust to the equation. Users won’t buy just any product. They have to be sure that it will be useful. They need to know they are betting on an item that will be more valuable in the future. Additionally, it must be a serious offer, with good foundations and business credibility. Consider the case of Lana Rhoades who created “CryptoSis,” and scammed investors for 1.5 million Euros worth of Ethereum cryptocurrency.
The future of NFTs
This situation could pan out two ways; On one hand, NFTs could succeed. Or, things could go tragically wrong.
Case 1: NFTs can be exhibited and popularized in the metaverse if all goes well. They will become a kind of CryptoCurrency with a lot of movement and will be considered a collectible just like valuable modern art paintings or sculptures. There will also be a new market where brands will be able to develop a fanbase, based on branding (not just the product).
Case 2: The world begins to reject NFTs because they are considered useless. They cannot be implemented in the metaverse environment and those who already have them keep them due to the impossibility of selling them at a decent price. They are lost in the future due to the imminent fall and disconnection of servers (which, by many, are considered harmful to the environment). Those who managed to take advantage of the boom in this market accumulate their wealth, while others regret not having thought better of it.
So, there are two options in the market for non-fungible tokens. On the one hand, you could decide to enter the market, assume the risks, and invest in positioning and marketing campaigns aimed at a specific population with these interests. It could result in the exponential growth of branding and customer loyalty, in addition to gains related to the public interest in products. Though, this could also result in a loss of investment in the medium term… Or, you could let the opportunity pass, and see its growth or decline from afar while focusing on what already works (and pay the opportunity cost by being left behind with what might work).
Whether you’re determined to start investing in creating NFTs or just need support with a more traditional marketing strategy, Making Science is here to help. Get in touch by visiting www.makingscience.com/contact