You have probably heard a lot of talk about NFTs in the news recently. Grimes making $6m in 20 minutes for a series of 10 artworks. Nyan cat, a meme of an animated flying cat with a Pop-Tart body leaving a rainbow trail, going for $600k. Taco Bell, selling thousand-dollar taco-themed works of art. And Beeple, stunning the art world with his sale of ‘Everydays: The first 5000 days’ for $69m, propelling him to be in the top three most expensive living artists. So far these crypto-collectables are mainly disrupting the art world, but it got me thinking – how can this technology unlock opportunity for brands and the relationships we have with them?
NFT stands for Non-Fungible Token, a term for a digital certificate of authenticity which allows buyers to purchase and take ownership of a digital good, usually an image, animation or video. You don’t own it in the physical world, but you do in the digital world. Anyone can replicate it and use it without your permission, but you are the one true owner of it. And because your ownership is stored on a digital ledger which is shared across thousands of computers (the blockchain), it is near impossible to hack into and change ownership of the NFT without your permission. Your token is uniquely yours with an authentication that can never be altered, but it can be resold with portions of the resale value sometimes sent straight back to the creator.
How are brands using NFTs today?
Much of the current buzz surrounding NFTs relates to digital art but they can be sold for any digital asset. As this space grows, we’re seeing the model applied beyond digital artworks. The NBA has a dedicated website Topshot giving fans the opportunity to buy their favourite moments in basketball as digital collectibles. The site has racked up to $200m USD in sales, with one Lebron James dunk shot selling for over $200k. Jack Dorsey, CEO of Twitter, has auctioned his first ever tweet, which at the time of writing had reached a high bid of $2.5m. The band Kings of Leon just sold NFTs for their latest album, offering gig tickets, exclusive tracks and artworks with the purchase.
This opens the door to a new world of brand engagement and an opportunity for brands to interact differently with their customers by “minting” special experiences, collaborations, iconic images, memorable ad campaigns, luxury designs etc. This is creating a whole new market through short term cash injection, and allows brands to retain control of their original assets without fear of manipulation, copy-cats or alterations.
This new model of monetization and ownership for digital media got me thinking how brands could benefit.
6 ways your brand could use NFTs
- Can businesses auction off their branded assets to its hardcore fans? For example, who wouldn’t want to own the Nike logo? Or the official Burberry brand pattern?
- Could they also sell the designs to its products, while still retaining the rights to market them? For example, Samsung could sell the NFT for the renders behind their latest products, but still use them on TV.
- Could retailers sell tickets to events for life? For example, Lane Crawford could release an ‘Exclusive Sales Preview’ NFT to allow the owner to get the first hour of the yearly sales exclusively to themselves.
- Can image creators change the licensing model? For example, photographers and illustrators could now sell the NFT behind their imagery rather than negotiating a three or five year usage.
- Can brands create one-off experiences and products that only live in the digital world? For example, McLaren could release an exclusive car only for use in online racing games and available through the purchase of an NFT.
- Can a brand own a moment in time? For example, Apple auctioning off the moment that its latest iPhone is released.
Of course, there is still much unknown about NFTs with speculation that it’s a bubble waiting to pop and concerns surrounding the stability of the market and its associated carbon footprint (which is a real concern).
But I believe the technology is here to stay. Digital content does have value for brands and businesses can leverage NFT’s to find new audiences, connect with their customers, and grow their business.