Louis Vuitton, Adidas, Samsung, Coca-Cola, and many others… Many brands are already interested in non-fungible tokens (NFTs). What is their interest in deploying NFTs and joining the metaverse movement? We give you 9 good reasons why brands can benefit from NFTs.
NFTs are on the rise since 2021
Non-fungible tokens (NFTs) are becoming more and more attractive to brands. They are more than ever on the radar of many marketing professionals.
The spectacular sales of NFTs in 2021 have caught the attention of many brands. Indeed, there is talk of $41 billion in total sales of NFTs in 2021 on the Ethereum blockchain, according to consulting firm Chainalysis, a growth of nearly 43,000% between 2020 and 2021.
It is also the rise of metaverses among the general public, marked by the announcement of the launch of Meta’s – formerly Facebook’s – new metaverse in October 2021, that has propelled NFTs into the spotlight.
What exactly is an NFT?
A non-fungible token is a certificate of ownership of an asset, registered on the blockchain. An NFT can take many forms.
It can be a work of art, which can be displayed on a connected watch or a wall screen. An NFT can also represent a real object, like a certificate of authenticity.
And of course, an NFT can be an asset on a metaverse. In fact, all the goods that are bought and traded on metaverses such as Decentraland and The Sandbox are NFTs: cap, land, concert ticket, house, etc.
NFTs have everything to appeal to brands
NFTs combine many attributes that offer immense possibilities: certificates of authenticity for a work, visual content, utility, interoperability, programmability, transparency, rarity, title to the metaverse and secondary royalties.
These characteristics can translate into nine major advantages for brands, which we will present to you.
NFTs can attest to the authenticity of an object, whether virtual or real, thanks to the transparency that the blockchain offers.
This is why many luxury brands, such as luxury watch manufacturer Breitling, now offer certificates of authenticity in the form of NFTs when selling their products.
NFTs to shine
NFTs are titles of ownership of content. This content, usually a 2D or 3D digital image, has the potential to bring aesthetics and light to a brand.
An NFT can be creative, original and even artistic. NFTs are visually pleasing and impactful. They can involve artists and associations. They are thus real communication tools.
Any consumer brand can use an NFT to create a “wow” effect and bring a visual experience to its customers.
For example, Taco Bell restaurants and Pringles potato chips were among the first to create artistic NFTs, with “transformative tacos” and sparkling chip packets. These NFTs can be displayed by their owners on a real screen or within a metaverse, and help promote the brand.
NFTs have a purpose
An NFT can not only represent something, but also serve as a ticket to an event or a discount voucher in a store, as with the NFTs of cosmetics brand Clarins, which launched a loyalty program in the form of NFTs in October 2021.
An NFT can also be “usable” as an accessory.
Thus, a pair of shoes in the form of NFTs can be worn on the foot of its avatar in a metaverse, but also in real life, thanks to augmented reality (AR) technologies.
The NFT can thus become a must-have fashion accessory, which is visible to its peers through augmented reality glasses or a cell phone. Successful examples include Nike’s “CryptoKicks Shoes” and Dolce & Gabbana’s “Metajacket” jacket.
These wearable NFTs, also called “wearables” in the metaverse, have become for some brands real product lines, as for Nike which recently bought RTFKT (pronounced “Artefact”), a start-up specialized in the creation of virtual sneakers in the form of NFTs.
NFTs are interoperable
NFTs are developed according to standards (ERC-721 and ERC-1155 on the Ethereum blockchain). The idea is that they are transferable from one wallet to another and interoperable from one platform to another, from one metaverse to another. Although this is not yet effective, the principle is that NFTs have no borders.
NFTs are programmable
Their visual content can change in time and according to an event.
For example, an NFT can change its appearance according to the seasons, or give birth to another NFT under certain conditions.
This makes it possible to imagine interactive, playful and storytelling NFTs.
An inspiring example is the “Project Ark” initiative of the World Wildlife Fund (WWF). One of the projects aimed to reintroduce bison in Romania. The NFTs represented beautiful 3D eggs. If the fundraising goal was met, the eggs would hatch, releasing another NFT, representing a 3D sculpture of a bison.
Another case in point is the Coca-Cola brand. This one launched an auction project of 4 NFTs to celebrate Friendship Day.
This NFTs project perfectly combined the modern potential of NFTs with the historical richness of the brand, with NFTs representing a retro Coca-Cola refrigerator. The fridge was a loot box, which contained four other NFTs representing iconic elements of the brand, including a down jacket worn on Decentraland.
NFTs are transparent and historical
NFTs keep a complete history of their transactions. This is freely available on the blockchain. They can in fact be compared to old library cards.
This historicity can increase the value of an NFT. Its age, or the fact that it belonged to someone famous can give an NFT extra appeal.
Similarly, NFTs can capture historical moments of a brand. This is called “memorabilia”. It allows fans to own episodes of the brand’s history, creating an emotional connection with the brand.
Among the most popular and lucrative NFTs in recent months have been the NFTs in Dappers Labs’ NBA Top Shot app, which feature clips of memorable moments from a sporting event. Total sales of NBA Top Shot NFTs exceeded $700 million in 2021.
NFTs can be integrated into metaverses
It is thus possible to develop a game or an attraction around NFTs. It is therefore possible to imagine truly engaging and gamified experiences. The creative possibilities are unlimited.
A brand can for example tell its story, express its values, and present its products in an original and impactful way.
For example, electronics manufacturer Samsung recently opened a store in the Decentraland metaverse with NFTs to be won, highlighting its sustainable development values.
Combined with the metaverse, NFTs are modern, cutting-edge products that can help refresh a brand image. They are aimed at younger generations and respond to their consumption patterns.
Notable examples include the Burberry avatar, developed in 2021 for the metaverse game Blankos Block Party. Similarly, luxury brand Louis Vuitton celebrated its 200th anniversary with an NFT game and hunt, “Louis the Game.
NFTs are at the heart of metaverses, which are becoming the new place for marketing.
Indeed, experts (including Mark Zuckerberg) agree that metaverses will eventually replace social networks.
The number of users and interactions on metaverses is growing. For example, there are now nearly 60 million messages exchanged per day on the Roblox metaverse, according to Bloomberg Intelligence, compared to about 100,000 million on WhatsApp.
NFTs can be rare
NFTs are very often minted in limited editions. Rarity is a key attribute of NFTs. With each new edition, there is not enough for everyone…
Thus, the acquisition of an NFT is exhilarating and makes customers want to share it with their friends on social networks.
A rare NFT is therefore collectible. A whole social community can develop around the activity of buying, selling and collecting an NFT.
NFTs are therefore great tools to create, develop and animate a community, with regular drops. Each drop is an opportunity to communicate with your community, and to animate attractions or events on the metaverse.
Drops can be broadcast on social networks, but also on the metaverse, one feeding the other. Indeed, one can set up panels with links to Twitter, Discord or other social networks on the metaverse, and thus invite more followers.
NFTs bring lifetime royalties to brands
Last but not least, NFTs can generate revenue for brands, either directly or through licensing partnerships.
Whether they are accessories (“wearables”) to be purchased in a metaverse store or a simple collection of images, sales of NFTs can generate significant revenues, with fairly limited production costs.
An example of successful NFTs with a trademark license is the F1 Delta Time project. These NFTs using the Formula 1 license have generated nearly $12 million since their launch, according to NFTs statistics site Nonfungible.
Even better, royalties can be programmed into the NFTs’ smart contracts. So, not only can brands receive royalties on NFTs at issuance, but also – and this is the big novelty that NFTs bring – during each secondary sale on the market.
NFTs are attractive and dynamic products. They can be bought, displayed, resold, collected, experimented… Coupled with an attraction on metaverses, they can bring a fun and emotional experience to a brand’s audience, animate a community, and generate lifetime royalties for brands. After revolutionizing the digital art market in 2021, NFTs could well become a new Eldorado for brands and disrupt the marketing landscape as a whole.