NFTs are everywhere right now.
Whether it’s Paris Hilton talking about them on a chat show or Tiffany turning some of the more famous ones into wearable jewellery, they are continually hitting the headlines.
In case you’re still not quite sure what one is, NFTs can be any type of digital asset, whether that’s drawings, music or even a GIF.
NFT stands for non-fungible token, which means it’s unique and can never be replaced. So, once you’ve bought one it’s yours to keep via a type of digital contract.
Other people who don’t own your NFT can screengrab a copy of the same file, but they won’t own the rights to the original copy, and so they can’t sell it on or claim it as an original.
The idea is that they can be an investment purchase, with the potential to grow in value, depending on several factors such as rarity, high profile previous owners, and trends.
It’s like people collecting Beanie Babies in the 90s, although NFT investors hope their purchases will turn out more profitable 30 years down the line than the majority of Beanie Babies fared!
So why is that of interest to marketing and brand managers?
Well, since their rise to prominence, a variety of different businesses have started riding the NFT wave. Sportswear brand ASICS created 189 individual NFT versions of some of their shoes, selling them at auction with proceeds funding their platform for new and established digital artists. And Pizza Hut has also jumped onto the bandwagon, releasing the world’s first non-fungible pizzas.
So, is it something worth looking into?
Well, it seems like marketers who are getting involved are having positive results. According to HubSpot 38% of those who used them said they had the best ROI of any channel in their media mix.
It’s true, they can certainly provide great opportunities for building engagement with your audience. The idea of owning something special or rare can be a big incentive for many customers and drive-up brand loyalty.
And as the Asics example above shows, they can also be used as a tool in CSR, if you use them to raise money for charities or social projects.
However, it’s also worth being a little cautious as well. Many commentators have drawn attention to the worrying environmental impact of producing them. Space Cat, which is a GIF of a cat in a rocket and one of the world’s most famous NFTs, reportedly produced a carbon footprint equivalent to an EU resident’s electricity usage for two months.
This means that if you’re using them for CSR purposes, it’s prudent to weight up the potential benefits to your brand against this pitfall.
It’s also worth considering that despite their growing popularity, not all your customers will necessarily be engaged with the NFT world. Research shows most of those investing are millennials, but the majority of the general public still don’t know what they are. And although setting up to buy and trade isn’t vastly complicated, making them too big a focus to your marketing strategy might mean you lose the engagement of those who just aren’t interested yet.
That’s no reason to discount the idea of them entirely though, as it’s clear that their growth potential is huge. It’s also highly likely that as time goes on more and more people will be becoming familiar with them. But as with all marketing and branding strategy, it’s worth really holding your customer base in mind when deciding whether incorporating NFTs is the best way to grow your brand.
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