Prior to the 1990s, brands created awareness through commercial advertising and merchandise. As the internet grew and evolved in the 1990s and 2000s, brands evolved with it, creating advertising first for static web pages and later for more interactive and more influential social media.
As the internet continues to mature, the values of decentralization, ownership, and authenticity have sparked a market for non-fungible tokens (NFTs). These unique digital assets, whose authenticity and transaction history are recorded and verified on a public blockchain, are emerging as a new medium for brands to interact with their customers.
As NFTs have captured the attention of investors around the world, they have also attracted businesses curious about how they can tap into this massively growing asset class. The emergence of NFTs presents opportunities for organizations looking to increase brand awareness, community engagement, and revenue.
NFTs: A Growing Industry
NFTs are no longer a novelty investment. The market, worth $232 million in 2020, had exploded to $22 billion only a year later, according to Market Decipher, a market research and consulting firm. The firm expects the NFT market to be worth more than $60 billion by 2031, at a compound annual growth rate of more than 19%.
A market of that size is sure to continue to attract the attention of your competitors that see business opportunities. The development and support of online marketplaces have assisted these brand communities in trading NFTs.
6 NFT Strategies to Consider
Since the first one appeared in 2014, there seems to have been no limit to what can be sold as an NFT—books, music, airline tickets, art, experiences, and even real estate.
Brands have been just as creative with their implementation, and NFT strategy resources continue to emerge every day. We picked six successful NFT strategies that brands have implemented:
- Special privileges: Owners of NFTs have exclusive access to products or events, such as further NFT drops, from the brand.
- Blending of the digital and physical worlds: Though the NFT is a digital representation of ownership on a public ledger, brands have tied NFTs to real-world brand experiences and limited-edition physical products. Coach, the handbag company, will allow owners of its NFT to claim a custom-made handbag in Q4 2022.
- Frictionless acquisition: For potential investors who haven’t set up crypto wallets, brands lower the barrier to entry by permitting the use of credit cards or fiat currencies.
- Link to the metaverse: Clothing and apparel brands have created limited-edition NFTs that buyers can use in the 3D digital universe. For example, Under Armour and Stephen Curry created digital sneakers that your metaverse character can wear.
- Packaged NFTs: Multiple NFTs bundled together may be more appealing to investors as they feel they are receiving even greater value than in a single NFT. The package could include physical-world offerings.
- Games: Brands create challenges for their customers, such as collecting certain NFTs, to win a prize.
3 Brands That Succeeded With NFT Strategies
Many times, brands will implement several of the strategies listed above. Here are three brands and how they recently incorporated NFTs.
Coca-Cola Loot Box NFT
Coca-Cola created a multisensory friendship-inspired NFT that included a virtual-world spin on Coca-Cola merchandise. On July 30, 2021, Coca-Cola auctioned a “loot box” NFT, and it consisted of a package of four NFTs.
The winning bid received:
- A sound card NFT of Coke dripping from a soda fountain
- A token NFT that grants the owner access to special privileges
- A digital clothing NFT that the owner can place on his or her metaverse character
- A physical special-edition Coca-Cola refrigerator
The NFT drew a winning bid of $575,883.61, and Coca-Cola donated it all to charity.
Robert Mondavi x Bernardaud NFT Collection
Counterfeit wine is one of the wine industry’s oldest and biggest problems. Robert Mondavi Winery took aim to solve this problem with its recent NFT issuance on Dec. 15, 2021.
Mondavi combined the strategies of physical wine delivery, digital art, and special privileges via a wine tasting. In a tribute to the year Mondavi was founded, the special-edition collection called MCMLXVI created 1,966 NFTs that included:
- A unique generative artwork based on the traits of the wine of the buyer’s choice
- A handcrafted porcelain bottle of wine
- A certificate to be redeemed for a wine tasting
Mondavi sold the NFTs for $3,500, with the redemption periods to claim the bottle of wine and the wine tasting certificate to run later.
nba Top Shots
nba Top Shots combined several strategies, including frictionless acquisition (fans can buy with fiat currency), packaged NFTs, and challenges.
nba Top Shots started in Q4 2020 and has created a new age of card collecting by turning animated GIFs of basketball plays into NFTs. Each GIF showcases a player in action for a few seconds. nba Top Shots sorted the GIFs into various levels of scarcity. Fans bought packages of GIFs in hopes of finding their favorite players, favorite teams, or rare GIFs.
nba Top Shots offers challenges such as asking fans to collect the top five scorers in the 2022 nba Finals, so collectors need to buy more packages or buy these players’ GIFs on the secondary market. Upon completion of the challenge, the fan would receive another NFT package of GIFs.
After reaching a cumulative sales high of $224 million in February 2021 for all of their NFTs, sales for the nba have tapered to $47.5 million during the second month of 2022. The brand also boasted 73,304 unique buyers in February 2022.
How Your Brand Can Start Working With NFTs
Adding NFTs to your brand’s marketing strategy may help your current followers become superfans, as most people want to belong with other like-minded individuals. NFTs are a great tool for engaging with your brand’s community and can help make the audience “stickier” too.
Getting started doesn’t have to be difficult. Your brand can start implementing NFTs into its marketing plan in three steps.
All the brands mentioned experimented with one or more of the six strategies we discussed above. In addition to using the strategies, the brands also made sure to do the following:
1. Build a strong community
Engaged customers latch onto every piece of information or merchandise that you release and are excited to share and amplify their interest in your brand, so they will give your brand a greater buzz and stickier clients when you release an NFT.
Additionally, any feedback loops on features of your NFT will reach you quicker so you can make improvements.
Without a strong community in place, you’ll need to begin building one, using social media platforms that have proved effective in communicating with and engaging audiences. You may need to hire a community manager whose role is to build trust with your brand, creating a calendar of events and incentives to help increase engagement and strengthen your culture.
Plan a roadmap for your rollout that clearly defines your strategy for incorporating NFTs into your community development. This clear communication will demonstrate to the community that you’re trying to add value, both to the community and to the NFT, which will then increase demand for it.
The features your brand decides to highlight may not be valuable to the community you’re trying to attract, so your roadmap needs the flexibility to experiment to see which strategies increase engagement.
2. Choose the right strategy
A popular strategy repeated above was bundling together several different NFTs or physical or digital products to add value to the investment.
Additionally, the makers of physical goods included a digital product as well to help tie their physical and digital worlds together. For example, Coca-Cola included the sound card of its fizzing beverage and a wearable for the metaverse. Robert Mondavi Winery included a digital art representation of its wine.
Coca-Cola’s auction fit within its friendship branding, as it donated the proceeds to the Special Olympics. Additionally, it allowed the brand to test the NFT strategies and business operations infrastructure — and complete a dry run without regulatory interference.
3. Choose an NFT marketplace
Once the details of the NFT have been created, it is time to make it available to your community. Once the NFT is “minted,” the ownership transfers to the first buyer. The initial owner can then decide to hold the NFT or sell it on the secondary market to anybody else.
When looking for a marketplace, seek out one with a large base of active users. A big base of visitors makes it easier to find buyers for your NFT and for those buyers to turn around and resell it to someone else.
Secondly, consider the marketplace’s costs to administer the transaction. Oftentimes, the seller will incur fees that could run from 2% to 5%.
As an example, the Bybit NFT Marketplace boasts more than 50,000 active members on Telegram, with transaction fees as low as 2%. When an NFT is sold on Bybit’s marketplace, 1% is a trading fee to Bybit, and 1% is a royalty fee to the original creator. That 2% fee is paid by the seller, while the buyer does not incur additional charges.
Learn how the Bybit NFT Marketplace can help your organization get started and bring NFT concepts to your brand community. If you are looking to list on a reputable NFT platform, contact [email protected] with the subject heading “NFT for companies—[Your organization’s name].”