NFTs & the future of marketing

In our last two articles "Are you web3 ready?" and "WTF is an NFT?" we established a basic understanding of web3, the blockchain, cryptocurrencies and NFTs. I would recommend checking those two articles out if you are still not familiar with these terms.

In this article, I want to dive deeper into the history and future impact of NFTs and how this technology will revolutionize the way we communicate, consume content and market products and services.

We have already seen how NFTs have changed the lives of those early to the game, whether creators or even collectors. Investing into OG projects like Bored Ape Yacht Club or CryptoPunks has returned hundreds of thousands of dollars, if not millions, to those who "Aped in" early and bought into these NFT projects. Creators of these NFT projects have realized profits from trading volumes (in some cases billions) that would never have been imagined in the traditional art world. The ethos of blockchain and decentralization through NFTs has given digital creative economy a level of freedom that the web2 world never has and never can.

As we celebrate that 1 year ago this week, the infamous Beeple sale of an "EVERYDAYS: THE FIRST 5000 DAYS" NFT for $69 million at Christies auction house. The sale, which remains the largest ever for a single NFT, was a spark that created the the explosion in the popularity (and notoriety) of digital assets.

A new NFT?report?released yesterday by NonFungible.com explores the market in the year when “stacking apes” became a phrase meaning something other than balancing orangutans on top of one another.

• NFT sales hit $17.7 billion in 2021, a 21,000% (200X) increase from 2020’s $82.5 million.
• The average NFT price shot up from $49.18 in 2020 to $807.52 in 2021, a more than 1,500% increase.
• NFTs entered mainstream consciousness in a big way, with celebrities including Snoop Dogg, Jimmy Fallon, Paris Hilton and Justin Bieber in addition to major companies like Nike, Visa, Adidas, GUCCI and McDonald's being very bullish on the future of the blockchain.
• NFT creators generated a total $5.4 billion in profits through sales of NFTs in 2021.

The past few months has shown us an emergence of innovation and rapid acceleration in the growth of the NFT economy. It's just a matter of time before the debate on the relevancy of NFTs will no longer be up for discussion.

Major companies know this and are building up their presence within this space:

• Twitter?is integrating NFTs
• Facebook?"META" is taking part in the building of a metaverse
• Nike?is creating NFT verification on shoes
• Coinbase?is building a NFT marketplace
• Warner Bros.?already released Space Jam NFTs and is wanting to release music NFTs

The market indicators and general sentiment clearly show that web3 is not only here to stay but also here to change things in a big way. As mass adoption and more major brands jump on the bandwagon, we will start to see NFTs becoming more mainstream and the NFT market grow exponentially.

How will brands adapt to this new web3 world?

Brand Community

Every brand's mission is to create a loyal customer base and eventually turn these loyal customers into a strong community of fans/ambassadors/loyalists that support their brand. For e-commerce brands that live on the digital space the community aspect becomes even more critical for its long term sustainability. So the need to build a community as well as giving that community a way to represent itself online is essential. The parallel can be seen in the NFT space, behind every successful NFT project, there's a strong community where customers can connect with your brand and supporters can form deep and lasting connections with one another. The ownership of your brand’s digital collectibles gives customers a financial incentive to bring more people and become true brand ambassadors.

Brand Experience

In addition to the aspect of brand community, comes brand experience. With blockchain technology and the use of the metaverse, brands can create exclusive, personalized experiences for their community. Exclusivity fuels desirability. Customers are hungry for personalized,?tailored experiences?from their favorite brands. According to?Epsilon, 80% of consumers are more likely to make a purchase when brands offer personalized experiences. Creating an NFT collection that gives members exclusive benefits can help strengthen customer connections.?

NFTs let customers own a piece of your brand and show off their brand association as a badge of honor on social channels. The ownership creates a strong emotional bond, giving customers a reason to keep coming back and boosting customer lifetime value.

Brand Loyalty

Tailored loyalty programs using NFTs can give brands a competitive advantage in the future of commerce. With NFTs, brands can give customers tokens for early access to new products, discounts, admission to exclusive events and private communities.?

Dolce & Gabbana debuted its NFT collection, Collezione Genesi, which has physical, digital, and experiential value. Besides the physical version of Dress from a Dream, custom-fitted to the wearer, an original signed sketch, and a custom digital recreation of the dress, the NFT holder receives two-year access to Dolce & Gabbana Alta Moda, Alta Sartoria, and Alta Gioielleria couture events in Italy. This way, the NFT encourages the buyer to engage with the brand both virtually and physically for the next two years.

New Revenue Streams

When implemented correctly, NFTs can unlock a new revenue stream for brands that complements their physical offerings with digital assets. In this context, NFTs are a sort of virtual stepping stone toward the metaverse and the future of customer interactions.

Nike made its first move into NFTs by partnering with the online gaming platform Roblox to debut?Nikeland. Customers in Nikeland can choose from a series of pre-built games or customize their own. They can also use accelerometers in mobile devices to incorporate real-life movements such as long jumps and speed runs into the game. For a more immersive experience, customers can browse the Nikeland showroom to dress their avatars, choosing different shoes, apparel, and accessories.

New Product Launches

Build excitement for a new product launch. One way brands can leverage NFTs is to organize a pre-sale limited drop of physical products and link each product to a unique NFT to offer additional value and gauge customer interest.

Adidas also made its first NFT drop,?Into the Metaverse, with NFT pioneers GMoney, PUNKS Comic, and Bored Ape Yacht Club. The drop of 30,000 NFTs, priced at 0.2 ETH each ($800) sold out almost immediately, generating over $23 million (6,000 ETH) in revenue (Cryptobriefing).

Are you ready for the metaverse?

According to?Gartner, By 2026, 25% of the global population will spend at least one hour a day in the metaverse for work, shopping, education, social, and entertainment. That said, it’s no surprise brands are scrambling to take a leap into the metaverse and stay relevant.

Brands can cater to the early adopters of the?metaverse?by offering bundles of physical products and NFTs. As people will want their avatars to own the kind of products they themselves own in the real world, the potential to capitalize on consumer interests very early on.

Nike has already?started producing its own “cryptokicks”?and creating its own blockchain system that gives customers the opportunity to both own the product in 3D and get their hands on the corresponding NFT too.

NFTs Today?

2022 will be the year where NFTs make an impact across many digital industries and platforms. A few areas to keep an eye on:

• Virtual Marketplaces
• Gaming
• Identity and Verification
• Digital Real Estate
• Virtual events in the metaverse
• Music & Film
• etc...

In the coming articles, we will explore more applications and news of web3, blockchain, NFTs and the metaverse.

To follow and connect with the web3 me "Nomadic Frame" in the NFT Space or to check out my work, you can find links to my social media platforms and NFT marketplaces below: