As non-fungible tokens (NFTs) gained popularity in the past year, marketers are experimenting with the potential to increase sales and engagement. Trading in NFTs spiked by 21,000% to $12 billion in 2021, which shows the expansion of the NFT market around the world and its opportunity as a marketing channel.
NFTs are unique digital tokens which represent ownership of digital media such as art, photos, animated gifs, and music. Companies and artists are looking to improve their growth strategies through initially creating and selling their own NFTs to the public.
As people flock to get to know NFTs, major brands are launching NFTs left and right in an attempt to capture the growing NFT market. By selling a digital duplicate of their real-world products and seeing massive demand, these major brands saw NFTs as a way to revolutionize the way they do advertising, marketing and sales. Here are a few ways brands are using NFTs to drive engagement and fuel sales in 2023.
Brand Awareness and Brand Love
Major companies strengthen their brand awareness and brand love through launching and marketing “limited edition” NFT collectibles. Owning NFTs creates another layer of experience for your loyal followers, as they are able to own something special and one-of-a-kind from a brand they love.
For example, Coca Cola launched a set of four exclusive NFTs for Friendship Day, to support the Special Olympics International. The set included two animated NFT collectibles, one wearable NFT that can be used for Decentraland metaverse, and an audio clip of the experience of enjoying a Coca Cola. The winning bidder also will receive a real-life refrigerator. Coca-Cola gathered enormous demand from its fans and the NFT community, ultimately selling the set for 217 Ethereum, which is approximately over $437,000 as of writing.
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Expanding Audience Reach
Major fashion and apparel brands have launched virtual duplicates of their products in partnership with known artists, in hopes to broaden their reach to the younger Gen Z market. Brands like Gucci, Ralph Lauren, Burberry, Nike, Adidas and many others are making wearable NFTs which can be used by avatars in virtual worlds such as Decentraland, The Sandbox, and Roblox. These brands enjoy the huge consumer appetite, paving the way for the fashion industry to explore the opportunities in the virtual worlds and ultimately holding a Metaverse Fashion Week in Decentraland in March 2022.
Increasing Engagement
Gamification with NFTs is an exciting way to increase your brand engagement – whether use your very own NFT to play a game, or through play-to-earn models where players can win your NFT as a reward.
One good execution is by Louis Vuitton through their Louis The Game. You can play as the main character Vivienne and find 200 collectible NFT candles which will reveal 200 stories about journeys of Louis, his family, and the Maison.
NBA Topshot also succeeded in engaging its community through selling trading card NFTs. Once you collect five basketball NFTs, you are then qualified to play their game using the five NFTs. Newer brands and enterprises on the other hand tend to lean towards play-to-earn games where players can win and be rewarded NFTs.
Product Reintroduction and Promotions
McDonald’s and Taco Bell has used NFTs as an instrument to reintroduce their product lines to the market. McDonalds released its McRib NFT the same day they started selling the product, while Taco Bell launched a series of NFTs called NFTacoBell to celebrate the return of potatoes in their products.
Aside from reintroduction, the food industry can also take advantage of promotions through utility NFTs. During new item launches, a company can mint a limited number of NFTs that have value, such as a physical merchandise or free regular fries for every store visit for life.
Utility NFTs are useful for product or service promotions, as one can buy an NFT and be granted access to a tangible real-world value which elevates customer and client experience. Examples of benefits that can go with utility NFTs include the physical product, exclusive or VIP experiences, early access to other products, and invites or tickets to concerts or events of artists and celebrities.
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Best Practices in using NFTs in Marketing
Before diving head first in marketing using NFTs, we need to note some points to learn the best practices of NFTs in marketing.
- Cause marketing. When a company launches NFTs for marketing, it is recommended to allocate some or all of the proceeds of the NFT sale to causes that the company believes in, because the public perceives a brand better when companies appear responsible, stand for and support causes.
- Decide the art and utility of your NFT to capture to your market. You need to match the designs and benefits of your NFT to the preference of your target audience. Make sure that your NFT will appeal and excite not just your loyal followers, but also potential customers.
- Understand limitations and maintain high quality NFTs. Be mindful in designing your NFT to maintain its scarcity value, high quality standards, and avoid anything that can ban you from minting and selling such as putting out sexual content. NFTs cultivate an exclusive limited edition feel to your brand, products and services, so your designs must reflect it. Avoid issuing the same NFTs that only vary in color. Put in the thought and wrap your NFT around a good story, content and design to keep the quality.
Lastly, have fun in creating your NFTs, promote them responsibly, and be patient in selling. NFT is a new technology. While analysts forecast that blockchain technology is the way of the future, no one can tell where the technology might go. Engaging in this new tech comes with the thrill and risks of new possibilities, but it might also help to be grounded and patient in your venture to the new world of NFTs.