Nfts & the new spaces they’re creating for brand marketing

WRITTEN BY: THE DIGITAL TEAM

NFTs have been making a splash in the digital world and in big brands recently.

If we look past the hype and dig deeper,  is there possibility  that NFTs  could be useful for brand marketing in the long run?

Non-fungible tokens (NFTs) are just like snowflakes, every single one is unique .

They’re a special type of cryptographic token that represents a unique digital asset. Based on blockchain technology, it works similarly to bitcoin- networked computers race each other to solve complex mathematical functions to encrypt a set of data; generating  a private cryptographic key.

The difference here  is that that they are non-fungible, which means  the tokens are not mutually interchangeable. In addition, during the encryption process, each NFT is  given a digital hash that distinguishes it from every other NFT .

The thing about NFTs is that they’re often created to represent image files in various formats and they can also be attached to any other types of digital file. With NFTs, people can own and trade digital assets.

For brand marketers, NFTs can bring exciting new possibilities in the realm of the digital world. Digital ‘goods’ aren’t a new concept, and they are popular in video games. Fortnite generated $1.8 billion in revenue in 2019-  a big portion of which came from selling in-game items.

And yet, digital goods haven’t been viewed as having much value to collectors because they can be easily copied, until now- with NFTs.

An NFT also makes digital goods easily tradable, which, in turn, makes them more likely to accumulate value through this  trading.  NFTs could also expand to include more digital assets.  For example, things like event ticketing, real estate, and tokens of real-world assets are all possible.  As an example, Nike patented shoes as NFTs  ( named CryptoKicks),  which allows users to ‘breed’ different shoes to create custom sneakers that can  then be manufactured in the real world.

Now, this use of NFTs combines physical and virtual, whilst using the opportunity to capitalize on monetization opportunities in both worlds.

Another revolutionary aspect of NFTs is that they could change the way digital media is given out and monetized by brands.

Most digital content is being monetized via platforms, be it ad-supported ones like Facebook or podcasts, or subscription-based ones like Netflix.

Although creators still own the copyright to their work on these platforms, they give up part of their ownership and control over their work to the platform owners.

But with NFTs’ – there is talk about developing a way to make the media ownership more creator centric. NFTs give the ability to make branded digital assets both remix-able and non-fungible. So, NFTs can verify brands as the rightful owner of their digital assets and therefore debunk other copies of the said assets as fan-made content. It works for brands and the user.

Another use for NFTs is for authenticating access to digital experiences. For example, Microsoft launched a game that celebrates women in science and rewards players with NFTs that unlock secret games inside Minecraft, giving them exclusive access to something.

For brands, this use will open up a new way to think about access online and managing it. Take digital tickets;  they are easily transferable and interchangeable, since they all perform the same function of authenticating access to exclusive experiences and events, both online and offline.

However, what NFTs add is that it makes each individual ticket 100% unique past their functional value; it’s like an autographed or customised ticket by somebody famous.  

SO WHAT’S NEXT?

As NFTs continue to gain  mainstream attention,  it’ll be likely that we’ll see more brands ( some already using them are Adidas, GAP,  Barbie)  jump in and start to experiment with releasing digital collectibles  to engage with their  core fanbase, or create exclusive experiences with tokenized access.

NFTs won’t make things like digital collectibles stick in the mainstream alone, as there are still plenty of questions to be answered; like how to transfer them across digital platforms, how to measure and offset the giant  carbon footprint they generate, and how to properly display them across a virtual environment  and in  reality.

But overall, the value of NFTs in the long-term  will ultimately come from the number of people truly believing in its value.