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NFTs: A New Marketing Tool?

NFTs are becoming more and more popular, especially in recent years. Trade in NFTs has been steadily on the rise since March of 2021, when an artist sold an NFT artwork for a staggering $69 million dollars, making it the third most expensive art piece sold by a living artist. By the end of 2021, the NFT market numbered $22 billion. Remarkably, Instagram is currently conducting a trial run with NFTs in the US (as of May 10, 2022). Facebook is also rumored to want to introduce these into the platform. All of these facts make the NFT trend worth following, especially in the novel ways it is used in the marketing and brand contexts. 

 Yet, what exactly is an NFT? 

NFTs, or literally, non fungible tokens are a sort of signature for online content, whether it is music, games, digital art, videos, or even tweets. They are a way to prove definite ownership of digital assets, which hasn’t been done in another fool-proof way before. For example, when an artist creates a digital art piece and puts it on the Internet, other people can make copies of it and these copies could pass for the original. In other words, it is impossible to prove which piece is a copy and which is the real deal. Now, with NFTs people can own digital assets and trade in them in online marketplaces. Each asset has its own non-exchangeable NFT which is a sort of unique code that exists in a blockchain. This is different from cryptocurrencies in that NFTs are not exchangeable, meaning that they differ from one another and cannot be traded like a currency. Each token is unique and will represent its own thing while providing a way to prove ownership. 

And how can companies use NFTs as a marketing tool? 

Like any new and novel technology, NFTs have the potential to create buzz and word of mouth for companies. As of now, the market for NFTs is a very niche market (though growing at a surprising rate) and only the early adopters in the population are venturing into it. Moreover, with large platforms like Instagram and Facebook on the way to incorporating NFTs, this is a huge opportunity for other small and large companies to get ahead and look to the future. 

Companies like Norwegian Cruise Line, Taco-Bell, Budweiser, Coca-Cola, Nike and many others have already started on the path to use this new technology. Coca-Cola and Norwegian Cruise Line organised auctions of NFTs where the earnings would go to charity. This was not a direct use of NFTs for their own profit and business plans, but a way to advertise their company and update their company image as one that is on top of new technologies and ready for what the future will bring. 

On the other hand, Budweiser has created a gallery of digital collectible artwork (with their signature beer cans throughout the years) where customers can buy their NFTs. Additionally, they have created a sort of club with different levels for people who own different types of Budweiser NFTs. Events, extra services and special products are made exclusively for people who are part of the ‘club’. This is like a premium subscription, but the newer and upgraded version of it. This ‘niche’ club doesn’t only present a marketing opportunity for the brand, but also makes people want to be part of the in-group, for which they have to buy an NFT. 

Another company that uses this technology is Nike. Unlike the others, Nike creates NFTs for physical custom made sneakers. This adds a level of protection for the ownership of the design and ensures that it cannot be replicated even on the digital level. Some of the more expensive of these custom sneakers are then usually seen by celebrities on social media, which combined with the current buzz about NFTs will be a great marketing tool for Nike. 

No matter how companies choose to use NFTs, this new and novel technology provides them with an opportunity to get on top of the new trends while making their brand seem tech savvy and cool. NFTs are going to transform the market in ways we can’t imagine and companies and marketers should definitely keep an eye on them.