You’ve probably read articles and heard many conversations about NFTs and Web3. But, if you’re like most marketers and business owners, you’re still confused about NFTs and whether they are relevant to your small business or startup.
In this article, we’ll explain what NFTs are, how they work, how brands use NFTs for marketing, and whether you should consider exploring NFTs in your marketing strategy.
What is an NFT?
An NFT (non-fungible token) is a unique digital asset that lives on a blockchain. An NFT can be artwork, music, videos, or any other type of digital asset. The value of an NFT is speculative and is typically determined by the community of people who collect and trade that NFT.
What does non-fungible mean in the context of NFTs?
Let’s illustrate with an example. Money is fungible. A twenty-dollar bill can be exchanged for two ten-dollar bills because they have an equivalent value.
NFTs are non-fungible. For example, with an NFT digital image, the value can decrease or increase depending on the circumstances or market demand. There’s no equivalent value for it – it’s unique and is legally owned by one person.
How do NFTs work?
You can only purchase and sell your NFTs using cryptocurrency. Cryptocurrency is a digital currency secured by cryptography, making it impossible to counterfeit or double-spend. Famous examples include Bitcoin and Ethereum.
When an NFT is created, this is called “minting” the NFT. Then you mint an NFT, and your original ownership and the unique identities of your NFT can be verified through blockchain ledgers.
A Blockchain is a secure digital transaction system that records information that makes it difficult to hack or scam (although this happens occasionally).
So, for example, you can own a unique version of an image. While there may be dozens of other identical images, the version you own is uniquely yours. This is similar to original paintings and reproductions. There may be 100 identical paintings, but only one original painting.
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Where can you buy NFTs?
To buy NFTs, you will need a wallet with enough cryptocurrency to meet the basic requirements for the platform from which you will buy NFTs. Platforms such as OpenSea, Magic Eden, and Binance NFT are great marketplaces to purchase NFTs.
Should you experiment with NFTs in your marketing strategy?
Nearly 40% of businesses experimenting with NFTs report that this marketing strategy has the best ROI (return on investment) of any channel.
NFTs aren’t appropriate for all businesses. But increasingly, brands are experimenting with ways to increase brand awareness using NFTS. So, at a minimum, you should keep an eye on this strategy.
How can you leverage NFTs for your business?
Marketers at companies of all sizes are experimenting with NFTs to increase brand awareness.
For example, Norwegian Cruise Line collaborated with an artist to create six NFT art pieces to help launch their newest class of vessels. Each was auctioned, with proceeds going to Teach for America.
Adam Bomb Squad is an NFT project by the Hundreds, an iconic streetwear company. The collection features 25,000 unique bombs and backgrounds that showcase the two decades of history for the brand. Ownership of an NFT in the project comes with special perks.
Hundreds of other brands, large and small, have launched NFT projects and have supported those projects with marketing campaigns.
If you’re looking to leverage NFTs for your small business or startup, here are eight NFT marketing best practices:
1. Study the NFT ecosystem
Before diving in and starting an NFT project for your business, take some time to understand the industry and its marketplaces. Ask important questions such as:
- What business goals can you achieve with NFTs?
- How do NFT marketplaces work? Are there any observable patterns?
- Which artists should you collaborate with? Do they fit your niche or business?
You can only confidently venture into the NFT industry when you are prepared. Remember, this is an uncharted world for most businesses, and everyone is experimenting with different strategies.
2. Create something that lasts
Most NFT art pieces are colorful and are inspired by trippy modern art. These digital art pieces aim to impress and make the most of what it’s worth. Your business should strive to create an NFT that offers a unique and lasting experience. You don’t want to offer something that will get boring over time.
It’s impossible to predict NFT prices. Some projects become viral and sell for crazy amounts. For example, Quantum by Kevin McCoy, a pixelated octagon varying in color, was sold for $1.47 million last year due to its captivating and trippy look. Everydays by Beeple was the most expensive NFT art to date – it sold for $69.3 million. It’s a collection of the artist’s everyday musings since 2007.
But most NFT projects fail, especially when they were created to make money and not as part of a comprehensive digital marketing campaign.
3. Create a brand-driven NFT
If you create NFTs for your brand, be sure that the NFTs fit your brand. After all, your goal is to raise brand awareness, and you want the NFTs to reflect your brand’s visual identity.
If your NFT project is disconnected from your brand, it’ll be impossible for you to meet your goal.
For example, Taco Bell’s NFTs project consisted of 25 taco-themed tokens with some animated designs. Proceeds were donated to a charitable organization.
Coachella Music & Arts Festival created an NFT digital image of a flower blooming on the festival’s two Fridays. The festival has always been known to be a gathering of fashion, art, and music combined. The brand’s 2022 NFT flower allowed it to leverage its popularity while staying on brand.
4. Aim to build a community
The NFT industry thrives in its supportive community. Aim to engage and connect with the community if you’re looking to market your business’s NFTs.
NFT collectors often talk about their NFT collections on Twitter. Aim to establish and strengthen your relationship with your target audience. Participate in conversations and learn from the community.
5. Be conscious of the environment
You might assume that NFTs are good for the environment since they are cultivated in a digital space. But some NFTs are energy-intensive, with an estimated Ethereum-based NFT consuming up to 100 kg of carbon dioxide (equivalent to a one-hour flight).
6. Don’t only focus on creating NFT art – explore other mediums
Remember that NFTs aren’t only limited to digital art. You can create NFTs from anything digital, including music and photography.
And if you’re not a designer, you can always find an NFT designer who can help create your first NFT collection.
7. Leverage email marketing
You can’t just rely on the popularity of NFTs to promote your brand. You must still market your project, including leveraging social media and email marketing to promote your NFTs.
Don’t forget that NFTs are relatively new, and many people still don’t understand them. So craft a strategy that educates and informs your target audience about your NFT project.
8. Use influencers to market your NFT project
Influencers can be expensive, but a proven strategy for smaller businesses lets you leverage existing relationships without spending a fortune.
Work with micro-influencers.
Micro-influencers charge less and have already cultivated a following that you can leverage.
But remember to only work with micro-influencers that are a good fit for your brand. Ask questions such as:
- What kind of person are they? Do they have the right personality to represent my brand, and do they have a credible audience?
- How many years of experience do they have as an influencer?
- What brands have they previously represented, and what were the outcomes?
- How much do they charge?
Not all brands will benefit from incorporating NFTs into marketing campaigns. But there’s enough growing interest in NFTs that you should, at a minimum, keep an eye on how other brands are experimenting with NFTs. With the right strategy, this might be a powerful channel to increase awareness of your brand.