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Although there has been huge excitement around NFTs, only a small number of businesses use NFT Marketing. NFT marketing is basically exploiting the huge excitement and potential around NFTs to bring in more customers. Last year has seen an increase in the number of conversations on NFTs and Web3. Both of these continue to attract the curiosity of marketers. We’ll discuss what NFTs are, how brands are putting them to use, and whether or not they’re worth the investment in this post.
What’s an NFT?
A non-fungible token, also known as an NFT, is a digital asset that possesses a one-of-a-kind signature and is stored on a blockchain. This digital asset might be anything, from artwork and music to collectibles and films. It is possible to swap or trade it without the risk of duplicates being created. The value is speculative and it is basically set by the community.
How precisely do they perform their functions? When an NFT is formed, also referred to as “minted,”. In this state it has the potential to both represent physical objects such as works of art and articles of apparel as well as non-tangible items such as music, videos, and still photographs.
For example, in 2021, Jack Dorsey, inventor of Twitter, received $2.9 million for the sale of his very first tweet. Who decides how much something like the item in question is worth? The local populace. The value of an NFT is subject to speculation, in contrast to the value of bitcoin or real-world assets.
effects of NFT
The decentralisation of authority from a select few to the many is symbolised by non-fiat currencies, which contributes to the widespread use of these instruments. This is especially helpful for content producers who have traditionally relied on third-party platforms like as Spotify, YouTube, and Instagram to distribute their work and profit from it. This presents a significant opportunity for such creators.
NFTs place the power of decision-making back into the hands of the community by allowing the community to choose what is popular and providing incentives for the community to support the things that they find appealing.
Because of how popular they are, the cofounder of the largest marketplace for NFTs, Open Sea’s Alex Atallah, recently mentioned on Twitter that there are more NFTs on the platform than there were internet pages in 2010. Open Sea is the largest marketplace for NFTs.
As a point of reference, the platform contains approximately 250 million NFTs that may be searched. Around 200 million websites were live on the internet in 2010.
Let’s see what this means from a marketing perspective.
NFT Marketing Developments
Together Labs’ senior vice president of growth, Lomit Patel, recently stated on LinkedIn his belief that non-profit organisations (NPOs) are currently doing in 2010 what social media did in 2010: dramatically improving their potential for brand visibility and audience reach.
The existing marketing environment is being upended by NFTs. Businesses are forced to look for novel approaches to motivate their audience to participate in their campaigns.
We are heading to a market that everything will be traceable, enabling us to define ownership and value. NFTs are an elegant method to achieve this goal.
You may generate excitement about your brand by taking advantage of the fact that it is so novel.
Brands Using NFT Marketing
Norwegian Cruise Line is an example of a company that is already implementing NFT marketing strategies.
Norwegian Cruise Line worked with an artist to produce six new art works. This was part of a collaboration to mark the occasion of the debut of the Norwegian Prima Class, a new class of boats. Each item is currently up for sale, with the initial starting bid set at $2,500. All of the earnings from the auction will be given to Teach For America.
The company said in a press statement that they decided to celebrate the launch with NFTs since it is innovative technology, which is reflective of how they approach their goods and services.
By doing so, Norwegian was able to generate interest in its debut. By capitalising on the hype that was already surrounding NFTs they attracted huge attention. This is basically a form of newsjacking.
Additionally, NFT marketing enable businesses to more effectively encourage their audience through the use of unique content and move the focus to the development of communities.
Anheuser-Busch, the parent company of Budweiser, held an event called #NFTBeerFest at its main brewery in March 2022, and invited holders of particular NFTs from Budweiser to attend.
Those who attended the event and purchased either a Budweiser Heritage Can NFT or a Royalty Collection NFT allegedly had access to perks such as free beer, tours, raffles, and entertainment.
Incentives like having access to material that is only available to a select few can be used effectively by marketers. They already do this through gated and premium deals, so this is simply another form of the same thing.
NFTs as event tickets
Collectable items such as tickets are a major method for various businesses for gaining profits. The collectible market form matchboxes to luxury cars moves around billions of dollars each year. Many companies have realised that this passion for collectible items can be transferred from physical items to digital using NFTs.
To provide this experience for their customers, some brands are fully merchandising their tickets in a digital form. This is the case for the super bowl which turned their biggest annual event tickets into NFTs for fans to collect.
NFTs as digital merchandise
The fashion industry is in the forefront of the NFT marketing hype. Decentraland one of the biggest virtual platforms held a completely virtual and immersive fashion show. Other well known brands such as Tommy Hilfiger, Paco Rabanne, Forever 21 and Dolc & Gabanna took part in this fashion event week. This created huge fan engagement and unprecedented ways to engage with the public. The experience itself created an environment to sell NFTs for clothing and accessories from the participating brands.
Brands like Nike and adidas have also began selling digitalised products from shoes to clothes, which can be experienced through various methods.
NFTs as exclusivity
There are companies that have provided really unique experiences using NFTs. The Californian winery Robert Mondavi launched the first NFT wine label in the world. There are only a limited number of 1996 collectable and traceable bottles using NFT. Each NFT of wine costs $3,500 and carries a key to unlock the bottle ownership. This creates the potential to make $6.9 million dollars!
NFTs as a fundraiser
Fundraising using NFTs creates new opportunities to help raise money for social movements.
Similar to Norwegian Cruise Line stated earlier, MAC cosmetics will use NFTs for fundraising for fighting HIV/AIDS.
This is also a great opportunity for nonprofit organisations like the United Nations Children’s Fund (Unicef). For example Unicef started selling one thousand collectible NFTs to raise funds for bringing internet access to students around the world. On the other hand Hope for Haiti launched an NFT fundraising campaign with FXG for victims of earthquake in Haiti.
The cost of making NFTs
According to a report from Yahoo, the price of an NFT can range anywhere from one dollar to nine hundred dollars. It varies widely according on the blockchain that you use, the amount of data that you have, the gas fees, and a variety of other things.
Cons of Using NFTs
The most significant downside of minting and utilising NFTs is the impact they have on the environment.
You might be wondering since it’s a digital asset, how does it impact the natural world? The production of an NFT can be responsible for a significant quantity of greenhouse gas emissions. Moreover significant amount of energy (electricity) consumption is required (depending on the complexity of the NFT).
Some content providers are experimenting with new methods of NFT minting that are friendlier to the environment and need less energy. However, there is still a lack of evidence to support the efforts that have been made.
Another disadvantage of employing NFT marketing is that we still have a great deal of information to learn. In a manner analogous to that of bitcoin, it is susceptible to a great deal of volatility because it is not controlled by any one specific authority.
In addition to this, they do not have a defined value, which means that you run the danger of losing your whole investment in them.
When viewed from the point of view of marketing, the fact that many customers are still uncertain and cautious regarding it makes it harder to attract their attention. The first people to adopt a new technology are typically the ones to bear the brunt of its consequences. On the other hand later adopters benefit from the experience of those who came before them and avoid making the same mistakes.
Are NFTs Worth Your Marketing Investment?
Because NFTs include potential risk, selling them to brands may be challenging. It is not possible to predict what will happen in the future of NFT marketing. It is still a little too soon to evaluate their influence with total certainty on a global scale. However the Global NFT market was valued at 15.70 billion dollars in 2021 based on SkyQuest reports. This is expected to rise to 122.43 billion dollars by 2028 with a CAGR of 34.10% during this time. This is an immense opportunity for marketing using NFTs.
What we do know is that a significant number of people who utilise it have encountered a great deal of success.
Data has shown that those who utilise NFTs are more likely to claim that they have the highest ROI of any channel in their overall media mix.
Sixteen percent of businesses intend to make use of NFTs for the very first time in 2022. This indicates that it is still mostly uncharted ground for many marketers.
With Web3 and NFTs, brands are able to receive more trackable rewards. Consequently, the value of this will be determined by the brand and the objectives.
Nevertheless, there is one thing that can be said with absolute certainty: you should keep a close check on it.
Highly rated books about this topics
The following book is a best seller book on Amazon about NFT. It teaches all the basics about NFTs and how to buy and sell NFTs.