By Arif Kazi
In the age of the digital era, wherein the task of marketing virtual and intangible products and services is keeping marketers on their toes, NFTs or non-fungible tokens have already revolutionized the space, attracting many multinational brands to put their hands into tokenization of their products and services as virtual assets. A buzzing word in 2021 with many corporates like global beverage major Coca-Cola to celebrated performance wear producer Nike and even individuals including prominent music artists like Marshal Mathers, popularly recognized as Eminem have been buying NFTs seeing at the potential that this new-age innovation is bringing.
So, what exactly are NFTs and why do brands care to market themselves better through them? NFTs or Non-Fungible Tokens are unique cryptographic tokens present on a blockchain setup that cannot be duplicated. From representing real-world items including art or limited-edition products, tokenization of the tangible assets enables brands to produce, sell or trade them in a secure and efficient environment and eliminate the possibility of scams.
While most brands are increasingly looking at NFTs for marketing; each brand has a varied purpose for the same. Some are seeing the potential in placing their limited-edition goods to be promoted as NFTs to open new revenue channels whereas others are using NFTs to raise money for a cause benefiting society and the environment. Several others are using them to narrate the brand story and to reach newer audiences present in the metaverse space.
How NFTS can be used for marketing and philanthropic initiatives
Interestingly, Mcdonald’s, a reputed fast-food chain from the ‘50s, has been known for reintroducing its legacy products after halting them for some reason or the other. To relate better, Indians might remember how they relished potato wedges back in the early 2000s but it was discontinued and has only made it back to McDonald’s restaurants in India in the past couple of years. Similarly, McRib a highly relished dish internationally remained off the shelf for a long, for which Mcdonald’s promoted its limited period return offer through NFT. A limited number of MCNFTs were issued by the restaurant chain to create buzz around the product’s temporary return. Since first letting out the news, the collection of the 10 MCNFTs was made available only to those who reshared the brand’s invitation tweet. It saw a whopping number of retweets, to the tune of 90k+ by the start of 2022.
Taking gated premium offers to another level, brands are extending exclusive brand offer rights to their customers in the form of NFTs. To cite an example, Anheuser-Busch, a beverage major organized an #NFTBeerFest event at its flagship brewery that allowed entry to specific NFT holders from its subsidiary company Budweiser. Holders of Budweiser Heritage Can NFT or Royalty Collection NFT were provided with free beers, performances, and other freebies at the festival.
Not restricted to just this, NFTs are a great way of selling virtual merchandise too. Hosting the first virtual fashion show in the metaverse, metaverse platform Decentraland hosted an immersive Fashion Week wherein luxury fashion brands like Dolce & Gabanna, Tommy Hilfiger, and Forever 21, among others participated. Apart from driving the brands’ engagement with the visitors, the platform also allowed visitors to buy NFT merchandise that was exclusively a part of the show.
NFTs are not just a means for providing a profitable edge to brands but also for helping them raise funds for a social cause. Ray-Ban, which has ruled the sunglasses market globally, thought of featuring a digital version of its iconic Aviator Sunglasses in a first and only NFT. Made by a reputed German proactive 3D designs artist Oliver Latta, the NFT was auctioned on NFT marketplace OpenSea with its proceeds being directed to Italian Art Trust.
To provide respite to the collapsing global medical industry in the backdrop of the Covid-19 pandemic, Italian fashion brand Gucci, the first, used NFT-based marketing for the welfare of society at large. It promoted it’s freshly made NFT taking inspiration from its Winter and Fall collection of 2021 in an online auction organized by Christie’s. Proceed of the NFT’s final sale price, a whopping USD25,000 were donated to UNICEF USA to help raise funds for its COVAX initiative.
Notably, the United Nations International Children’s Emergency Fund (UNICEF) also began the sale of 1000 NFTs collection in a bid to pool funds to promote internet access for school students across the globe. MAC Cosmetics is also selling collectible NFTS to raise funds for organizations helping the global community combat HIV and AIDS.
Should you look at NFTs for marketing?
As they do not hold a specific value, NFTs can leave the holder with the risk of losing their investment wholly. This can shy away many prospective investors from investing in it. A regulatory body is hence needed for this space to thrive.
In India particularly, the concept is still nascent and will take some time for the brands to understand how the NFT mechanism works. Just like the common understanding for any technology, the early entrants in the space will have to face the heat in developing the market whereas the late joiners note the mistakes from their predecessor brands to not repeat them.
Yet, if you don’t test your mettle, little will you know the potential. It is hence ideal to keep a track of how many companies are approaching their target audience through the NFT route to take excerpts from for devising your marketing strategy using NFTs.
With virtual reality being increasingly adopted globally including India in the age of Web3 and Metaverse, NFTs are indeed worthwhile to keep track on to look at prospective ways of branding.
The author is the founder and managing director of Dust Value