Is 2022 the Year Brands Get Serious About Crypto?

Between Charmin toilet paper NFTs and Whoppers with a side of digital coins at Burger King, 2021 was the year cryptocurrency and the technology surrounding it became inescapable in the marketing world. While brand marketers have long talked about the transformative potential of blockchain—the digital ledger system that serves as the backbone of cryptocurrency—the concept grew in mainstream consciousness into a constellation of technologies that some enthusiasts now collectively refer to as Web3. Definitionally, Web3 is an internet of the future that runs on a blockchain-based digital ownership tech called nonfungible tokens (NFTs) and incorporates shared virtual spaces known as the metaverse. What that mouthful of buzzwords has looked like when put into practice by the advertising industry is far more whimsical than those dry definitions might convey. It encompasses everything from McDonald’s selling digital art pieces to commemorate the return of the McRib to Gucci peddling virtual sneakers for gaming avatars and a host of companies accepting crypto payments for the first time. McDonald’s digital art commemorating the return of the McRib. Despite all the frenzied experimentation, experts say marketers have yet to arrive on many durable ways to use the technology to reliably reach consumers or drive significant revenue, although promising projects do exist. “Overall, I think a lot of the NFT activity has been partly opportunistic, partly also, ‘Oh my gosh, if we don't do it, we might be seen as not innovative,’” says Martha Bennett, an analyst at Forrester Research who focuses on crypto. “What I'm not seeing yet is more coherent strategies around how you can use NFTs for greater brand engagement, greater customer engagement.” As we head into the new year, 2022 will be about sifting out novelty-driven gimmicks and homing in on applications that actually have the potential to change the way marketers engage consumers on a larger scale—whether that means NFT-centered loyalty programs, commerce in the metaverse or the use of blockchain to revamp digital ads, experts say. “I would challenge people to start understanding what the Web3 business models are, and then start bringing that back to think, ‘How can I restructure the way I do marketing today so that I don't get disrupted when it goes mainstream?’” says Jeremy Epstein, CMO of enterprise platform Gtmhub and author of The CMO Primer for the Blockchain World. A hot topic at CES At this week’s Consumer Electronics Show, which will have both in person and digital components due to skyrocketing cases of Covid-19, organizers will dedicate a portion of the event to cryptocurrency and NFTs for the first time. It's a testament to how fully the tech has captured the imaginations of marketers. While CES has featured plenty of scattered blockchain applications in past years, the evolution of cryptocurrencies into new areas combined with growing interest warranted a more formal and distinct presence, according to Jean Foster, svp of marketing and communications for the Consumer Technology Association, the trade organization that organizes CES annually. "It's going to be a hot discussion topic," Foster says. "We've seen it expand and evolve, and that's why we thought the time was right for us to have this as an exhibit area within CES." Gucci’s virtual sneakers for gaming avatars. Exhibitors in the new section will range from high-profile crypto exchanges like Coinbase and FTX to smaller startups, like Blockparty and Tom Brady-backed Autograph, that aid brands, artists and collectors in minting and displaying NFT pieces. Joseph Saavedra, CEO and founder of Infinite Objects, a startup that creates physical display sets for digital videos and is making its first CES appearance this year, sees the event as a way to bring marketers who might still be unfamiliar with the concept into the fold with a simple device—a sleek video screen encased in a glass or wooden frame—to serve as an explanatory prop. “At CES, we hope to continue to educate visitors about the NFT space and create meaningful relationships with NFT projects by providing them with the option for physical tokens for their video works,” Saavedra says. “Our product has made significant contributions in bringing down the barriers to entry in the NFT space by both making the concept more understandable and allowing creators to have their works shown off and collected in a meaningful way." NFT loyalty programs There’s a reason the CES lineup is heavily weighted toward NFT-related ventures. NFTs have proven more popular among marketers than cryptocurrency itself, according to Will Luttrell, chief technology officer at brand tech group You & Mr Jones. Part of the downside of cryptocurrencies for marketers, he says, is that many are not amenable to the transparency required to log transactions on a public ledger and are wary of the effects of price fluctuations. “I’ve seen tremendous uptick in related concepts around NFTs and the metaverse—things that are crypto-adjacent, that use distributed ledger technologies, blockchain technologies,” Luttrell says. “I have honestly not seen a big uptick in the adoption of crypto within marketing circles as far as talking about coins and currency.” While NFTs are primarily seen by brands as collector pieces at the moment, Crypto.com CMO Steven Kalifowitz says the next step in their evolution will come when marketers start tying them into loyalty programs or pairing them with access to real-life events or experiences. These types of applications may be able to outlive the decline that NFTs have seen in overall transactions after a peak in early 2021. “You're going to see brands start to think about leveraging NFTs for what they are, which isn't just a collectible, but rather your membership to a club, which can be transferred and traded,” Kalifowitz says. “NFTs are the perfect ticket to an event.” How do you think cryptocurrency will affect your brand in 2022? "On one end there is the resource-intensive option of fundamental product integration, such as accepting crypto alongside traditional methods in a payment terminal. But, perhaps one of the most actionable implications is purely around the literacy a brand showcases in crypto through its messaging and programming, such as in social. This is especially true for a brand like GoDaddy Pro, where blockchain is an entrenched complementary interest of our freelance web designer and developer audience." —Evan Weiner, director of brand social, GoDaddy Estée Lauder-owned cosmetics brand Clinique experimented with this approach in October when it released NFT artworks and free product giveaways to select rewards program members who submitted stories of optimism in everyday life to a competition the brand held. The release was “just the beginning of Clinique’s journey in the metaverse,” according to a statement from the company. Crypto tokens may also help marketers realize a dream that has long vexed them—cross-brand loyalty programs—according to Rich Feldman, who leads marketing for enterprise capital planning platform Finario. Brands can team up to create rewards for certain segments like recent movers or shoppers of brands in the P&G portfolio, for instance. The future of cryptocurrency for brands Even before NFTs gained mainstream traction, many startups and industry initiatives had attempted larger-scale transformations of the ad-tech industry by using blockchain to make digital ad-supply chains more transparent or even compensate consumers for their attention. While some of these efforts have caught on to various extents, Epstein believes many of the transformative effects of blockchain in digital marketing are still years off and will require wider infrastructure to achieve. In his days blogging about marketing and blockchain a few years ago, Epstein made quarterly charts of the dozens of new blockchain companies bent on storming the marketing-tech industry. “The problem for a lot of those is that they were too early, even though they're the right idea,” Epstein says. The current boom in interest around crypto and a fuller view of what a decentralized new web might look like may help breathe new life into some of these efforts, according to Alanna Roazzi-Laforet, an ad-tech and blockchain veteran who is now publisher and chief revenue officer of Decrypt Media. Roazzi-Laforet says the mistake of many of the early efforts was attempting to remake the current ad-tech system around a blockchain framework, rather than reimagining it entirely as the concept of Web3 has. “We're going to be building infrastructure on the blockchain and eventually freeing ourselves from the mantle of Web2 technology and ad tech,” she says. “That's what's going to change the world, not the kind of retrofitting Web3 into Web2. That was the mistake.”

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Is 2022 the Year Brands Get Serious About Crypto?

The tech will have a dedicated space on the marketing floor at CES for the first time

Patrick Kulp

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