Updated as of April 2023
Your NFT challenge
As much as NFTs are trending, they are probably as much misunderstood by newcomers to the space. Businesses, brands and individuals are jumping on the bandwagon, but this space is really complex. In order to enter the space as an existing brand you need an interdisciplinary team consisting of designers, crypto growth hackers, blockchain developers, analysts, investors and economists. It’s rare to find these skills in one existing team and not having it all in place could be a huge risk for the brand.
Even for people with some knowledge it requires a lot of time to research, decode and understand this emerging industry and the opportunities it presents. NFTs open up a lot of marketing opportunities for all brands and this noise doesn’t help to get started. In recent years, non-fungible tokens (NFTs) have become a buzzword in the world of digital marketing and Web3. NFTs are unique digital assets that can represent anything from artwork to music and more. They are stored on a blockchain, which provides immutable ownership and scarcity, making them valuable in the eyes of collectors and enthusiasts. In this article, we will explore the use cases of NFTs for business growth, showcase data and figures, and provide examples of how brands are leveraging NFTs to expand their marketing strategies.
About this guide
NFT launches are governed by a different set of principles and the crypto space is complex, therefore it’s crucial to understand the challenges in order to develop the perfect brand activation program. We want to contribute to the NFT community and we decided to help by offering this guide. The goal of this post is not to distract you with the largest NFT highlights from the recent months, but give you some fundamental, basic understanding and explain why NFTs are interesting, and showcase some of their potential use cases in marketing and brand activation.
Together with the team I’ve been active in the crypto space since early 2016. Thanks to the experience we’ve collected we can help you and the community to take advantage of the innovation that NFTs bring today, whilst avoiding some of the typical pitfalls. We will keep updating this post as we collect feedback and learn from the brand activation campaigns.
According to Gary Vaynerchuk, a well-known entrepreneur and NFT enthusiast, “NFTs provide an opportunity for businesses to engage with their customers in a new way. They can create unique digital assets that represent their brand, which can be used to create new revenue streams and engage with customers in a new way.”
Background on NFTs
TL;DR NFTs are
• New types of digital and universal building blocks
• Stored on the blockchain, therefore they inherit all benefits of the blockchain technology
• Programmable
• Synergies with other blockchain based applications
Non-fungible token (NFT) is a term used to describe a unique digital asset whose ownership is tracked on a blockchain, such as Ethereum.
NFTs are best explained as new digital building blocks. This means they are universal and can integrate with other digital systems. Think of them as a LEGO brick that you can use to build anything and can be used in any themed LEGO set.
Assets represented as NFTs can be anything from a piece of digital work (e.g. photo, music, text), utility (e.g. access), claims on physical assets or anything you want. In other words, your record (AKA token) on blockchain references any object you decide to link it to.
Thanks to the fact that the record is stored on the blockchain it allows you to verify ownership of each NFT. What makes it so powerful is that the NFTs can have some special powers on top of the visuals they are represented with (e.g. define royalties from every future transfer of ownership).What makes them even more powerful is when they are combined with other applications on Ethereum – making the interaction with the NFTs more efficient than in traditional platforms. It’s similar to the way bitcoin makes payments more efficient than traditional payments, it’s borderless and doesn’t require any intermediaries.
Example: In a traditional, centrally controlled game the game publisher owns the game and all assets – they could even close your account and you’ll lose access to the character and history you build up. But, if your in-game items are represented as NFTs you own them and you can trade or transfer them to another player.
Why NFTs are interesting for existing brands
If you read this you’re most likely converted, but in case you still need to persuade others in the team it is useful to explore the rationale behind NFTs in brand activation.
Direct engagement with your community
This is by far the primary and the strongest reason for brands to integrate NFTs in their marketing. For the first time customers have the ability to directly engage with their favourite brands. Thanks to this unprecedented direct access there is a new level of perks and other benefits that come out of that, on their own terms and without any middleman. The verifiable ownership on the blockchain unlocks many potential use cases that can bring users closer to brands.
Additional revenue
The NFT sale can be lucrative. The funds collected can be used to further enhance the initial concept of the NFT project (i.e. you start with a small and basic collection and when funds are collected you re-invest to create additional benefits for the early adopters) or fulfil the promise that was made as part of the NFT concept (e.g. access to a special edition of your product), or could even be used to fund a special cause that is aligned with the values of the company.
Learning and growth potential
NFTs are closely connected to the opportunities introduced by decentralisation and tokenization – often broadly explained as web3. web3 as opposed to the traditional web2.0 (centralised, driven by big tech) is decentralised and gives the ownership and power to the end user. Anyway, even if you are sceptical about these trends, they are light years ahead of the current state of digital marketing or business in general. Your experience when working on decentralised projects, such as NFTs, will open new creative avenues for your brand, products and your company.
Extend your reach
The web3 and NFT community is growing fast and you have the unique opportunity to be one of the first movers in this space. It’s an incredibly engaged community, which is also on a mission to build a better, decentralised web. Creating a link between your brand and NFTs will put you on the map of many new potential users or customers.
What brands are suitable for NFT marketing
Basically all of them, including B2B firms – there is absolutely no brand that couldn’t benefit from the exposure to the NFT space and decentralisation that comes with it. There are some exceptions for companies that have monopolised their market and are heavily embedded in the centralised, traditional digital business (web2). These companies might see NFTs as a threat to their core commercial model.
Case studies of brands successfully using NFT for marketing
• Taco Bell: Released a collection of NFTs in 2021, which included digital artwork and virtual taco hats. The collection sold out in minutes, generating over $1 million in sales.
• Nike: Released an NFT collection, which included virtual sneakers. The collection sold out in minutes, generating over $3 million in sales.
• Coca-Cola: Created a virtual vending machine that dispenses NFTs, which can be redeemed for physical prizes. The campaign generated over 1,600 transactions and increased brand engagement.
NFTs provide a new way for businesses to engage with their customers and create new revenue streams. By creating unique digital assets that represent their brand, businesses can expand their marketing strategies and reach new audiences.
Types of marketing applications
There is no blueprint for a marketing application; creativity to come up with new models is recommended. Bringing something new to the community is always appreciated by its members. Nevertheless, we can identify and group some typical applications of NFTs in marketing. Please also consider hybrid applications – there is rarely just a one sided story to any NFT collection.
Community engagement and community building
Creating a community of engaged advocates around the brand has been for years the holy-grail of marketing. Unfortunately, paid media and advertising is a short term drug that doesn’t contribute to community building or engagement. NFTs open up a number of interesting applications that could provide an alternative to traditional paid advertising.
The easiest way for a brand to dip its toes into the NFT space is to kick-off your community building with an NFT collection. If you already have a community of engaged customers, reward them for their loyalty, commitment to the brand by allowing them to access some additional benefits through the NFT sale. You could also simply surprise them for their activity. This could include some special campaigns and be simple (e.g. you buy this product and you have a chance to receive an NFT), but can also be quite complex (e.g. NFT for a subscription product that holds the information about your entire history with the brand, publicly demonstrating your loyalty, which could be linked to your status in the community and additional privileges).
Building a strong and engaged NFT community is essential for successful NFT marketing. It is critical to look at different elements that creates a strong community, while choosing the right platform, Twitter being the most appropriate and used social media platform for NFT and Web3 projects.
• Choose the right platforms: Twitter, Discord, and Telegram are some of the most popular platforms for NFT communities. Choose the platform(s) that best align with the goals and needs of the brand or company. Twitter being the most popular social media platform for NFT and Web3 projects.
• Focus on quality over quantity: Instead of trying to grow a large community quickly, focus on curating a high-quality community. This means attracting and engaging with the right people who are genuinely interested in the NFTs and the brand.
•Create valuable content: Share valuable and relevant content with the community, such as behind-the-scenes looks, sneak peeks, and exclusive content. This can help build trust and loyalty among the community. Explore Twitter Spaces and create your own podcast, invite guests and thought leaders to build credibility and a solid network.
• Engage with the community: Interact with the community and respond to their questions and comments. This can help build a sense of community and encourage engagement. Conducting an AMA (Ask me Anything) event is usually and a great way to engage with your community, showcasing transparency and honesty.
• Host events and giveaways: Host events and giveaways to reward and engage the community. This can help build excitement and encourage participation. Especially on Discord where the community wants to always be engaged and entertained, build a sense of ownership and trust with the community by hosting events and prizes on regular basis.
• Leverage influencers: Collaborate with influencers who have a strong following in the NFT community. This can help reach a wider audience and build credibility. Look into influencers with the same mindset and vision in your field, for example decentralised Science projects can look to find influencers in the DeSci space to collaborate and grow the community.
• Monitor the community: Monitor the community and ensure that the rules and guidelines are being followed. This can help maintain a high-quality community and prevent spam or inappropriate content. Discord and Telegram need the most attention when it comes to monitoring the community and removing spammers and bots.
Example: A musician can reward the attendees of a live performance with an NFT that can later be used to provide access to exclusive content or merchandise.
Collectibles
This is particularly applicable to brands that have been producing tons of unique content or products that haven’t been accessible before. They can now release this content in the form of NFTs, which not only lets users access rare content, but also lets them own a piece of the history of your brand. To add some excitement, brands often use an auction based sale to offer their collection.
Example: Digital collectibles offered by NBA Top Shot can own basketball’s greatest moments. They are like Upper Deck trading cards, but digitally accessible and represented as NFTs.
Metaverse
Metaverse is the new, democratised virtual world powered by the web3 technology. The NFTs are integral to ownership in the metaverse, including buildings, objects and businesses. Imagine the game Second Life, where you could individually own in-game items and all of the assets. The simplest way for brands to engage is to recreate your identity, including iconic buildings or launching a popup in metaverse.
Example: Stella Artois partnering with ZED RUN to offer users in metaverse some additional features to apply to digital horse racing. Or Nike providing sneakers in the metaverse.
Special purpose
Some individuals or brands have engaged with NFTs for a specific one-off purpose, such as collectively purchasing an item, business or donating money to a cause. It’s also typically combined with other applications, whereby a percentage of revenue generated is donated to charities.
Example: MegaFans uses donated NFTs and cryptocurrency prizes for gamers and collectors to participate in the company’s fundraising event for charity.
Creative arts
Many NFT collections that sell out are created by digital artists – brands and celebrities jump on this trend to release their own collections in collaboration with the artists. It’s a win-win situation, whereby even a less famous artist can profit from the exposure provided by the brand or celebrity. This could apply to any type of creative work, from graphics, video or music.
Example: Paris Hilton’s Planet Paris short video series made in partnership with Blake Kathryn.
Utility
This is most likely the most complex of all applications. The NFT in this case is linked to some special utility, which could also have a representation in the physical world, e.g. verification of ownership of a luxury item, or the NFT could represent a membership in a DAO (Decentralised Autonomous Organisation). In this case the actual visual representation of the NFT is less important. Applications in this category tend to do particularly well if they provide some unique value to the NFT community or a new take on something that hasn’t been tried before.
Example: Patrón is releasing its first batch of NFTs that will unlock real bottles of its limited-edition Chairman’s Reserve tequila. Buyers will have the choice to redeem their NFT for the delivery of a physical bottle, trade it, keep it in their “virtual bar” or gift it to someone else.
NFT market statistics and facts
• The total sales volume of NFTs in 2022 was over $20 billion.
• The average price of an NFT in 2022 was around $2,000.
• The most expensive NFT ever sold was Beeple’s “Everydays: The First 5000 Days” which sold for $69 million.
• Art and collectibles are the most popular types of NFTs, followed by gaming and sports-related NFTs.
• The number of unique NFT buyers grew from around 10,000 in 2018 to over 300,000 in 2022
Where do you start?
There is no easy formula or 3 steps to launch your successful NFT collection. We developed our own NFT brand activation framework that we continue to refine as we launch new projects. Here are some tips about minting & selling NFTs on marketplaces.
Minting & Selling NFTs on a marketplace
NFTs have opened up a new world of digital asset ownership, and the ability to mint and sell collectibles on the NFT marketplace is one of the most exciting opportunities for businesses. When a business mints an NFT, they are creating a unique digital asset that represents their brand, which can then be sold on the NFT marketplace.
Minting NFTs allows businesses to create digital assets that are unique, scarce, and verifiably owned by the buyer. This opens up a new avenue for brands to engage with their audiences, especially in the collectibles market. Selling collectibles on the NFT marketplace can provide a new revenue stream for businesses. Collectibles have always been a popular niche market, and with the rise of NFTs, the market has exploded.
Examples of brands using NFTs through minting & selling on NFT marketplaces
Businesses can benefit from this growing market by creating their own collectibles and selling them on the NFT marketplace. These collectibles can take many forms, from limited edition digital art to virtual items in video games.
One example of a business that has leveraged NFTs to create collectibles is the NBA. The NBA has created an NFT marketplace where they sell collectibles such as virtual trading cards, and limited edition merchandise. These collectibles have proven to be incredibly popular, with some of the rarest trading cards selling for over $200,000.
Another example is the luxury fashion brand Gucci, which has released a series of NFTs that represent their iconic sneakers. The sneakers were first released in real life, and then the NFT versions were sold on the NFT marketplace. This allowed collectors to own a piece of the brand’s history, while also providing a new revenue stream for Gucci.
NFT marketplaces to explore
There are several NFT marketplaces available, each with its own unique features and advantages. Here are some of the top NFT marketplaces and what they have to offer:
OpenSea: One of the largest and most popular NFT marketplaces. It offers a wide range of NFTs, including art, gaming, music, and collectibles. OpenSea also provides a simple and user-friendly interface for buying, selling, and trading NFTs.
Rarible: A popular NFT marketplace that allows creators to mint and sell their own NFTs. Rarible also has a strong community and social features, allowing creators to interact with buyers and build a following.
SuperRare: A curated NFT marketplace that focuses on high-quality, limited edition art. SuperRare is known for its strict curation process, ensuring that only the best quality NFTs are listed on the platform.
Nifty Gateway: A premium NFT marketplace that focuses on high-end, limited edition drops. It has a strong focus on art and collectibles and features exclusive drops from popular artists and celebrities.
Foundation: A curated NFT marketplace that focuses on supporting and promoting emerging artists. Foundation has a strong community and social features, allowing artists to connect with buyers and collectors.
When it comes to choosing the best NFT marketplace, it really depends on the goals and needs of the brand or company. Below are some factors to consider when choosing an NFT marketplace:
• Audience: Different NFT marketplaces may have different audiences and user demographics. Brands should choose a marketplace that aligns with their target audience and the type of NFT they are selling.
• Fees: Each NFT marketplace has its own fee structure for buying, selling, and trading NFTs. Brands should choose a marketplace with reasonable fees that align with their budget and revenue goals.
• Features: NFT marketplaces offer different features, such as social and community features, curation, and minting tools. Brands should choose a marketplace with features that align with their goals and needs.
Working with the right NFT marketing agency
Choosing the right NFT marketing agency is crucial for the success of an NFT project. Good marketing partners will allow you to expand and grow your business rapidly while also allowing you to focus on the development of the project without worrying about the community curation, engagement, and building.
Determine your needs: Before selecting an NFT marketing agency, determine your needs and goals. Consider factors such as the budget, timeline, target audience, and desired outcome.
Research potential agencies: Research potential NFT marketing agencies and consider factors such as their experience, reputation, and track record. Look for agencies that have a proven track record of success in the NFT market.
Review their portfolio: Review the portfolio of the NFT marketing agency to get a sense of their style and approach. Look for agencies that have experience with similar projects or audiences.
Check their references: Check the references of the NFT marketing agency to get a sense of their reliability and professionalism. Speak to previous clients to learn about their experience working with the agency.
Assess their communication skills: Assess the communication skills of the NFT marketing agency. Look for agencies that are responsive, clear, and transparent in their communication.
Consider their approach to data and analytics: Consider the approach of the NFT marketing agency to data and analytics. Look for agencies that use data-driven insights to inform their strategies and measure their results.
Evaluate their creativity and innovation: Evaluate the creativity and innovation of the NFT marketing agency. Look for agencies that are able to think outside the box and create unique and engaging campaigns.
Look for a collaborative approach: Look for an NFT marketing agency that takes a collaborative approach to working with clients. This means working together to achieve the best possible outcome and being open to feedback and input.
Choosing and working with a good NFT marketing agency can help ensure the success of an NFT project. By considering factors such as experience, communication skills, data-driven insights, creativity, and collaboration, businesses and projects can find an agency that is the right fit for their needs and goals.
Reach out to us!
Our work goes back to 2016 when we were invited by one of the first crypto startups in Switzerland to help them to promote their Initial Coin Offering (ICO). This initial project started a snowball effect and two years later we were supporting multiple startups and creating valuable connections in the space. Today we have a team of 50+ specialists and we are working with heavily vetted NFT and crypto projects.
At what. we look for respected brands with a long term perspective on this industry and ethical approach to business. We are particularly excited about the cross section of the NFT world and DAOs. We also see a lot of synergies between traditional brands and the crypto space, both worlds have never been closer and we’re excited to contribute to the community and help businesses and brands explore NFT applications in their brands.
If you want to get in touch about interesting NFT ideas or projects, I’m @LukeSz on Twitter or contact us here.