Why Your Brand Needs NFTs

Whether you like it or not, NFTs are here to stay. It’s time your brand capitalised on them.

After the meteoric rise of NFTs in 2021 it became clear that there was something more to this new technology. Global brands such as Nike, Starbucks and Gucci (just to name a few) have all been exploring the realm of NFTs and testing the waters with digital collectables, loyalty programs and more.

Many of these existing behemoth brands have been inspired by the rapid successes of new ‘Web3’ brands such as Bored Ape Yacht Club (BAYC) and CryptoPunks who have quickly emerged as globally recognised brands with very engaged communities. These early winners have caught the attention of many A-list celebrities such as Lindsay Lohan, Serena Williams and Snoop Dogg. All of them publicly announced their purchasing of these premium NFT collections, adding to the hype and allure surrounding them.

GM stands for Good Morning, it is a term that was coined in the crypto community. In other words, Serena is announcing her support for NFTs in this tweet.

Marketing in Web3 is only just getting started, in five to ten years every big brand will have a team that specialises in Web3 marketing strategies. Global brands are taking notes and looking to replicate this success with their own marketing strategies in Web3. If they don’t, they’ll miss out on the opportunity to reach consumers in the ever-growing digital economy.

Let’s look at some reasons why your brand should launch an NFT. But first…

What is an NFT?

A Non-Fungible Token is a unique digital asset that is verified on a blockchain. Digital art, game items and collectables are a few of the most popular use cases for NFTs at the moment, however, this technology will be applied to many more industries over time. Web3 marketing just scratches the surface of what is possible with NFTs, you can discover some other use cases of NFTs in another blog that we wrote here!

Why should your brand launch an NFT?

There are several reasons why a brand might want to use NFTs, from increasing brand awareness to engaging their existing user base or creating limited edition collections. The opportunities to use this technology for your brand are endless and if used effectively they are powerful marketing and revenue-generating tools.

Here’s how your brand can benefit from launching an NFT.

1. Brand Awareness

If done well, an NFT collection can do wonders for your brand awareness. NFTs are not inhibited by geographical limitations, so you can reach a global audience with any collection. Anyone can purchase an NFT, all you need is a crypto wallet and an internet connection.

As a result of NFTs being able to reach a global audience, they can generate a lot of interest in your brand worldwide. If an NFT collection goes viral, it’ll have a far greater impact on your brand awareness than almost any other marketing campaign. You can track the effectiveness of an NFT launch more easily as all sales and holders of the NFTs are recorded by the blockchain.

Leading brands are using NFTs primarily to generate hype around their brand. They are trying to tap into internet culture and Web3 communities to strengthen their presence in this trend-setting, vibrant and rapidly growing digital economy.

In December 2021, Nike acquired digital fashion company RTFKT and later launched a 20,000 Nike CryptoKicks NFT collection.

2. Revenue Generation

NFTs can be used to monetize digital content such as art, music or other sought-after digital collectables that would otherwise be free to users. Brands can use NFTs to create limited-edition items or collections, which can increase their value and appeal to collectors.

Nike is currently the highest-earning brand from its NFTs sales. By August 2022, Nike had generated over £150 million in revenue from its NFT collections. The only other brands that have generated more revenue in the NFT space are Web3 native companies like Yuga Labs which are behind viral NFT collections like Bored Ape Yacht Club (BAYC).

Nike’s secret to generating so much revenue is one that many brands have not capitalised upon yet. With NFTs you are able to profit off of secondary sales, an NFT can be traded dozens of times and with each sale, the creator collects a royalty fee. When you are a big NFT brand like Nike, and you are generating £1 billion in NFT volume, the royalty fee is a lucrative way to profit off of secondary sales. It is estimated that Nike has made half of its revenue from secondary sales according to Dune Analytics.

Tiffany & Co. entered the NFT space with their NFTiff luxury jewellery sale. Holders of CryptoPunk NFTs could buy NFTiff NFTs for approximately $50,000 (in ETH) and redeem them for a bejewelled Tiffany CryptoPunk pendant. There were only 250 NFTs up for grabs and the whole collection sold out in less than half an hour, pocketing Tiffany & Co. a cool $12.5 million in the process.

We are just at the beginning of what is possible with NFTs for brands and we will have many other innovations over the coming years.

3. Brand Loyalty

Brands can use NFTs to create exclusive experiences or rewards for their customers, which can increase loyalty and engagement. Starbucks is leading the way and is in the process of launching its new NFT loyalty program named Starbucks Odyssey.

You might ask: Why does Starbucks, a global brand with a wildly successful Rewards program, need an NFT loyalty program? Or any sort of ‘digital collectable’ for that matter.

When asked, this is what Adam Brotman, creator of Starbucks Rewards had to say about it, “Blockchain-based digital collectables can be an incredible loyalty, storytelling and brand engagement tool”.

However, there is much more to it than that. The truth is, most brand loyalty programs are stale and NFTs or other digital collectables can give loyalty programs new life and opportunity for increased engagement from their customers. NFTs can be an extension of an existing loyalty program, you don’t need to rip up the script and start again, you can just bootstrap new, fun, engaging and innovative features into it.

Then of course there are the utility and collectability aspects of NFTs. The NFTs can act as an access pass, in the case of the Starbucks Odyssey you can complete ‘Journeys’ and collect ‘Journey Stamps’ (NFTs) that unlock exclusive coffee experiences and other benefits. These NFTs can be earned, bought, sold or traded on their NFT marketplace. Starbucks can easily track the success of the Odyssey by looking at the blockchain and seeing how many wallets are interacting with their smart contracts.

The Starbucks Odyssey is an opportunity for Starbucks to enhance its relationship with their customers and in doing so, increase brand loyalty. Starbucks is paving the way with the Odyssey, we are confident that many will follow in their footsteps.

In conclusion…

Major brands are just scratching the surface of what is possible with NFTs. If you are looking to use innovative new strategies to make your consumers feel valued then you should contact Eidgensi, a leading Web3 creative agency, to discover how they can boost your brand awareness, loyalty and revenue with Web3 advertising strategies.