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Few new technologies have generated as much buzz in recent years as nonfungible tokens, or NFTs. As with social networks, virtual reality and cryptocurrency when they first hit the scene, the excitement surrounding these unique digital assets has led many to question whether they will live up to the hype.
But NFTs are not a fad, nor do brands need to wait years to realize their value. Leading brands, including the NFL, Clinique and Mercedes, are already using NFTs to excite customers and forge direct, verifiable connections with them. Those connections will only get more valuable as privacy changes make it harder to measure customer interactions online.
Ultimately, NFTs may be the basis of the next generation of advertising, replacing the doldrums of display ads with assets that capture singular bonds between brand and consumer. But in the short term, brands and agencies can already take advantage of NFTs to build awareness, deepen relationships with existing customers and pair the measurement capacities of ecommerce with the reach of marketing.
How brands are using NFTs to build awareness
Brands can use NFTs to create events and experiences that earn attention from a wide array of stakeholders, including customers, investors and influencers. NFTs can take what is typically a logistical exchange and transform it into an experience worth sharing.
For example, the NFL gave every attendee of this year’s Super Bowl a free NFT corresponding to the spectator’s section, row and seat. The league is also releasing eight NFTs to honor the eight times the Super Bowl has taken place in Los Angeles.
The transformation of Super Bowl attendance into an NFT gives fans a token of remembrance of their engagement with the NFL. But it also likely increases the chance fans will share that experience on digital platforms, perhaps boosting Super Bowl viewership and enticing others to check out the NFL’s new NFT marketplace.
Other brands can follow the NFL’s playbook, transforming even seemingly mundane interactions, such as ticket purchasing, store visits or loyalty program renewals, into share-worthy, audience-expanding experiences.
Leveraging NFTs to make the customer feel special
In addition to raising awareness, NFTs can lead existing customers to become advocates. An example is beauty brand Clinique’s NFT loyalty campaign, in which the skin care brand invited loyalty program members to submit “stories of optimism” on social channels and rewarded three participants with the brand’s coveted Black Honey lipstick, free physical products delivered once annually over a decade, and one of three editions of an original NFT artwork.
Clinique’s campaign is a master class in capitalizing on the excitement around NFTs to drive brand value. First, only loyalty program members were eligible for the contest, making current members feel valued and encouraging others to sign up for the program. Second, to win the contest, customers had to post on social channels, generating further attention. Finally, the three customers who won the contest received a reason to post about Clinique, its products and its NFTs for an entire decade, turning those customers into advocates and introducing their social networks to the brand.
Other brands can replicate Clinique’s campaign, not just by selling NFTs or tying them to specific purchases but awarding them to loyal customers who can pass on the excitement. Brands do not necessarily need to orchestrate complex campaigns or commission expensive artists to craft NFTs either. Expect to see more brands integrate NFTs into ordinary loyalty operations, commemorating customer relationships with singular assets that attest to their one-to-one relationship with the brand.
Pairing marketing reach with ecommerce metrics
Another advantage of NFTs for marketers is that interactions with them are effectuated via smart contracts supported by blockchain. This means NFTs will transcend the tracking issues and fraud problems that plague much of digital marketing. If an NFT changes hands, the creator and vendor will know, boosting transparency as to NFT campaigns’ success and reducing the risk of skewed or fraudulent metrics.
One way to think of this benefit of NFTs is pairing marketing’s reach with the one-to-one relationship of buyer and seller and the clear, transactional metrics of ecommerce. Measurement is a perennial topic of debate among marketers—with NFTs, brands will reduce measurement issues and bring the resolution of ecommerce insights to marketing campaigns.
There is a lot of buzz surrounding NFTs, but it would be reactionary to view the excitement as unfounded hype. NFTs offer durable brand value and add new dimensions to awareness campaigns, loyalty programs and marketing measurement. For those reasons and others, they are here to stay.