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Since the dawn of time (and the emergence of Mad Men), marketers have always been looking for deeper, more meaningful ways to connect with their audience. The latest kid on the block is NFT. We can deny it or we can accept it – strategize around it, play along and make some profits.
Leading brands of today are cautiously stepping into the Metaverse era, a digital avatar in hand. It has monopolized conversations everywhere. The mystery around the elusive NFTs can range anywhere from how to effectively utilize them in your marketing strategy roulette to how quickly must I adapt. The undeniable truth is this – NFTs, while here to stay, are going places.
Created by Kevin McCoy and Anil Dash in 2014, Non-Fungible Tokens began as a video clip. The clip was registered on a blockchain and sold for $4. These ‘monetized graphics’ on the blockchain were linked to artworks and video clips. Public curiosity and awareness around these tokens reached a fever pitch in 2021 when an old NFT project (dated 2015) was sold for $1.4 million. Within the first few months of 2021, a little over $200 million was spent on non-fungible tokens. This gathered the interest of the art world further propelling its value.
The NFT trajectory is not unlike any other disruptive, emerging technology – valued by a small group of eager, early adopters at first, cautiously promoted by celebrities next and soon, an inescapable conversation at every water cooler and dinner party.
The first step is building a careful strategy around the metaverse (an umbrella term that includes all virtual worlds), not necessarily building digital assets. Technology’s greatest gift is enabling a seamless connection. Therefore, it is equally necessary to build a strategy that aligns with your brand vision and not the other way around. Nike was quick to patent a system of CryptoKicks that utilize NFTs to gauge authentic physical sneakers, but give a virtual shoe to the customer (who may pay in cryptocurrency). Louis Vuitton created a game that involves searching for NFTs in the metaverse. Real estate, gaming, and even fashion brands have quickly jumped on the digital bandwagon, working to create products that best represent them online. Fundraising, ticketing, and community efforts can only be amplified with the help of blockchain technology. Some may even create NFTs as digital merchandising.
Whatever the assets, the strategy must be to embrace the disruption in a way that makes sense to your brand without alienating the hyper-aware customer. Remember, the customer is also seeking a brand that is ultimately in step with their own personal values (such as caring for the environment, being politically aware, and more).
Whether companies are simply riding the wave or onto something that has the potential to redefine the way brands connect with consumers, investing In anything digital is definitely the way forward. The mystery remains, however. How can brands select a relevant NFT-centric strategy that engages, instead of alienates, their core consumer group?
The explosive value of NFTs, in fact, is in their adoption. The more people buy and engage with NFTs, the more businesses are likely going to view it as a necessity. The adoption of multiple social media networks over the last twelve years is proof that customer engagement drives branding. Simply put, where trends go, brands will follow.
For some brands, their core strategy is in its scarcity. Think luxury brands that thrive on being unavailable. For them, path-breaking spaces that are not yet crowded with the competition are where they fully blossom (and cash those dollars). For others, this can be out of step with their branding ideals. The question to ask here is, how much time of my customer’s day is spent in the virtual world? This could help shape the percentage of marketing focus in this not-yet-dominated space. Embedding NFTs into your core branding is key.
However, some brands do believe that this could be yet another hype-cycle. There is so much we are yet to uncover about the way blockchains operate. This usually makes it a ripe market for scams. Fake NFTs are common and the industry as a whole is still working out IP and ownership challenges. All the hype surrounding NFTs only increases security and verification risks.
Smarter brands are always looking at what’s next and NFTs hold a deep fascination (for now). To fully evaluate whether or not this path is right for your brand and to what degree, it is essential to keep an ear to the metaverse ground. With nothing but the hype surrounding NFTs, plenty of resourceful and helpful online communities are being created. As NFT enthusiasts, they can help inform your marketing strategy. Speaking to other advisors is also a good way forward. Investing in smaller digital tokens is also a cautious approach.
While all trends point to yes, sometimes being relevant can be costly. Ultimately, it is a waiting game for most brands to see if the metaverse becomes mainstream. Excellent news for those waiting by the sidelines.
Riya Vatnani is Group Account Director at Cicero & Bernay Communication Consultancy, an independent PR agency headquartered in Dubai offering new-age public relations consultancy to the UAE and across the MENA region. | www.cbpr.me