Micro Lesson 1: NFTs - An Indispensable Brand Marketing Channel

To mark International Friendship Day on July 30th, and donate to the Special Olympics, the multi-billion brand, Coca-Cola, entered the metaverse and auctioned its first-ever NFT ‘Friendship Day Box’ collectible for 217 ETH. (current value approx. $700K)

Brand managers, PR gurus, advertisers, and agencies, if you’re still wondering what the NFT fuss is all about, it’s now time to pay serious attention to its potential. 

NFTs are the most significant technological upgrade to happen since the launch of the World Wide Web (WWW) in 1991. NFTs provide digital asset ownership, access rights and enable economic value exchange between two trust-less parties on a blockchain. Sounds pretty complex, but I’m going to explain why NFTs are game-changers and how they will emerge as a new marketing channel to promote brand culture. 

But first, what are NFTs? 

NFT stands for non-fungible token and it can represent anything digital, that’s unique (non-fungible), has value, can be traded and it’s ownership secured on a blockchain. NFTs most commonly represent digital art, but they can be digital wearables, in-game virtual objects, a contract deed attached to a property, a domain name, or even an article, such as the one I minted on Opensea.io, to claim ownership over the term DeMar (Decentralised Marketing).

As this is a micro-lesson on the crypto-powered marketing series and not a deep-dive on NFTs, please review a beginners guide to NFTs, a post by Linda Xie. 

What makes NFTs unique, is not what is happening today in terms of the value being exchanged for digital art, but fundamentally, what’s important is the blockchain architecture behind it, that will enable mass adoption of the decentralised internet. We are at a new frontier where technology changes everything, as it did with the internet, smartphones and apps! 

From a marketing perspective, NFTs are a new platform for creating an upgraded customer experience, driving engagement and enabling monetisation of fan culture. If you have more time to spare, read a more in-depth use case here

Image: Property of Cola-Cola

Taking Coca-Cola’s NFT project into consideration, the brand applied the following core principles of NFTs that made their campaign notable. 

1. Community Targeted: Cola-Cola created their first-ever collection of digital collectibles for a tight-knit and passionate crypto community who want to own limited edition valuables in the metaverse. The campaign was crypto-native and decentralised. The assets were listed and auctioned on an NFT trading platform, Opensea.io, and could only be bought using cryptocurrency.

2. Culture-Specific: Cola-Cola blended its brand culture with the NFT culture. The four collectibles offered were rare, iconic to the brand, and had a high perceived value. Brand assets such as the Cola-Cola bubble jacket, 1990’s friendship trading cards, a 1956 vintage cooler, and sound visualiser, were tokenised as NFTs and offered as scarce digital artwork. The Cola-Cola NFT package was backed by special incentives and surprises only available to the owners. 

3. Perpetual Utility: The value derived from owning the Cola-Cola NFTs is perpetual. Assets ownership and transfers are documented on a blockchain without the owners needing to reveal their identities. Royalties are built into smart contracts and any appreciation in the value of the collectible and secondary sales gets distributed among creators of the NFT and/or the brand itself.

NFTs are at the intersection of culture, community, and cryptocurrencies, and they will empower DeMar (decentralised marketing). 

DeMar is the network effect that a business accrues through independent actions that customers, creators, and communities take on a blockchain by engaging with the brand or its products, contributing their opinion, creativity, or content, in exchange for economic incentives delivered by smart contracts. 

In the first half of July 2021, NFT global sales volume hit $2.5 billion. There’s a real momentum being driven by crypto adoption amongst younger consumers and creators who are taking charge of their identity, data and ownership rights. 

NFTs, therefore, will emerge as an indispensable marketing channel for consumer brands who want to belong to and engage with the emerging decentralised digital ownership ecosystem. Innovative NFT projects which consciously work with crypto-native attributes, delivering long-term value will be seen as pioneers in this space. 

Is your brand ready?

I invite your thoughts. Please click or scroll to the comment section.

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