In less than a year, non-fungible tokens (NFTs) have gone from WTH to the BFF for businesses. Their sudden rise into the mainstream might have you wondering what all the fuss is about.
NFTs seemingly appeared out of nowhere in March of 2021 when a digital artist sold a collage of 5,000 images at a major auction house for close to $70 million. The record sale also sparked huge interest in these digital certificates of authenticity known as NFTs. As a web designer and artist, I’ve asked myself, “What do NFTs mean for me and the businesses I work with?” Let’s begin with a definition.
If something is fungible, it is interchanged with other goods or assets of the same type. A typical example would be a dollar bill. That bill can be swapped for goods, services, or another currency of equal value. If you happened to have had a dollar bill signed by Andy Warhol, it becomes a unique product with a unique value (non-fungible). Also, like any investment, the value of that bill can increase or decrease in the future.
NFTs are digital assets like bitcoin, only they’re unique and irreplaceable, like owning an original work of art online. They utilize the same authentification technology as cryptocurrency and, similar to the digital currency, are still indefinable in their uses. While some NFTs hold monetary value, others link owners to communities, are in the form of audio, or can even be worn digitally.
Most importantly, NFTs enable creatives to reach wider audiences. Anyone with access to the internet can create, find, and trade NFTs. So, what if it could help businesses do the same?
It all started with Taco Bell incorporating NFTs into their marketing strategy. Earlier this year, Taco Bell sold a small collection of taco themed digital art. All 25 unique pieces sold out within 30 minutes. The proceeds went directly to their Live Más Scholarship, which increased Taco Bell’s brand awareness and supported a good cause at the same time.
Since then, Twitter, CNN News, UNO, and Campbell’s are just a few of the many brands that have leaped into the ever-popularizing market, with more joining them by the day. Because of the interest they’ve generated all over the world in the last few months, these digital collectibles have given companies a new way to tell stories and interact with consumers. Additionally, with NFTs in their infancy, the opportunities for use in a brand’s digital marketing strategy are endless.
However, NFTs aren’t all reward and no risk. An NFT’s success relies heavily on the community to create the publicity and traction for a successful project. For new and smaller NFTs that don’t have publicity from a well-known source, this community is crucial as it usually provides the initial funding and hype for the project’s launch. If the community isn’t large enough, the project might not reach the recognition it needs to have a competitive demand.
Some of the reasons why NFTs are so important for brands and corporations are because they can create new, memorable experiences for their consumers, reach new audiences, and offer a new way to engage in the digital space. Yes, they’re still new and their practical use may seem limited. However, people love them and are willing to spend on them. That is proof enough that NFTs are here to stay.
If your brand can afford the risk, has overlapping audiences, and wants to test new digital marketing strategies, we recommend incorporating NFTs into your marketing strategy. With the help of NFTs, your company can increase brand awareness, encourage customer interaction, create unique experiences for your consumers, and generate more interest in your business and its solutions.