An NFT (non-fungible token) is an asset that you’ll own completely but will never be able to hold in your hand, and it’s the Next Big Thing in marketing.
Imagine this: you spend $560,000 on an image of a newspaper column from The New York Times that becomes entirely yours and no one else’s but you can never hold, and you don’t own the rights to the actual words in the column.
Some people might call that crazy.
But that’s just what Dubai-based 3F Music did this March. The digital asset was the NYT’s first venture into crypto art, which saw the sale at auction of the rights to a picture of columnist Kevin Roose’s article entitled ‘Buy this Column on Blockchain!’ about non-fungible tokens, aka NFTs. Roose then donated the proceeds to the NYT’s Neediest Cases Fund.
Soon after the purchase, 3F Music tweeted, “Social experiment or otherwise, the publicity around this piece only adds value to it. So, I’d call it a wise move.”
The move also boosted 3F Music’s brand equity. The firm has now not only raised its profile by investing in other digital artefacts, such as an image of a Byzantine shield by Lebanese artist Kristel Bechara, but may now be considered a pioneer in its industry for investing a whopping $257,914 in an image of the multiverse.
In a recent TED talk, Kayvon Tehranian, CEO and founder of Foundation, a platform that allows creators to use blockchain to monetise their work and form connections with collectors, said, “NFTs are not a scam, NFTs are not a fad. In fact, NFTs are the building blocks of the internet of the future.”
This seems to be the consensus across industry experts and blockchain entrepreneurs, and investors are ready to put their cryptocurrency where their mouth is. Digital luxury marketplace UNXD and blockchain network Polygon announced the launch of a $10m fund to invest in flagship NFT brands and creators. The UNXD Culture Fund will help creators commercialise and create (or ‘mint’) NFT collections.
To give you a sense of just how much volume is being generated by NFTs, digital analytics firm DappRadar, which tracks NFT data on various platforms, reported that the total market generated in 2020 was $95m. By the end of Q2 2021, that figure stood at $2.5bn.
What’s the point of NFTs and what does it mean for marketers?
So what if people are selling art and culture-making content at insane floor prices? What is the point and how do NFTs affect marketers and advertisers?
With blockchain technologies like cryptocurrencies disrupting and decentralising the relationship between users and traditional banking, NFTs are doing the same for aspiring artists and culture makers. Today, digital marketing uses intermediaries such as Google and Facebook that control the space between advertisers and users. Blockchain technology has the potential to disrupt marketing as we know it by eliminating the digital ‘middleman’.
If you’re an artist or creative, NFTs give you a way to sell work that there might not be a market for and reach clients that you might not otherwise reach. If you’re a buyer and collector, you can access, support or invest in an extraordinary assortment of artists and cultural producers whose work you believe will have potential.
If you’re a marketer, you need digital assets to be a part of the NFT metaverse and there’s a massive opportunity to create original NFTs around your brands that will build precious cultural capital. For instance, Coca-Cola has already launched a successful NFT. Coca-Cola’s NFT is based on creative storytelling where real-life blurs with the metaverse and Coca-Cola is the “magic between all of it”. Proceeds from the four-day auction of collectables to commemorate International Friendship Day on July 30 were donated to Special Olympics International.
So, what does a decentralised model look like for marketers?
Blockchains are already transforming the media-buying process by bypassing the dominant search engines and costly social media analytics through which targeted advertising is made possible. Blockchain offers the potential to access public big data to gain insight into consumer trends.
Armed with more streamlined data sources directly from the blockchain and a deeper understanding of individual consumer trends, advertisers and media-buying specialists can focus their resources on direct distribution. We wouldn’t be surprised to see a surge in demand in our region for blockchain analysts.
Being at the forefront of the industry, we are tremendously committed to enriching our clients’ projects and we are especially excited about exploring the NFT space with our clientele. The sky – or should I say the metasphere? – is the limit.
What Is an NFT (non-fungible token)?
A non-fungible token (NFT) is a unique digital asset that acts as a certificate of ownership for virtual or physical assets such as photos, videos, Tweets, etc. Each NFT represents a one-of-a-kind cryptographic item that cannot be interchanged with another and is maintained in a digital ledger called the blockchain.