Hello everyone! This month’s blog post will focus on non-fungible token (NFTs) and some ways it is being applied to the marketing world. To start off on the right foot with these digital elements, we need to first understand what are fungible tokens and non-fungible tokens and how they are used in today’s world. The Blockchain Council breaks down the difference between these two tokens (a tangible representation of a fact, quality, and can be anything of value) as the following:
- Fungible Tokens: A token that can be interchangeable, divisible, exchangeable, and uniformed.
- Ex: Currency is an example of fungible tokens such as exchanging a U.S. dollar for another U.S. dollar, using an exchange rate between countries or via digital currency like Bitcoins, etc.
- Non-Fungible Tokens: A token that represent collectible digital items and are non-interchangeable, non-divisible, and are unique.
- Ex: 5 brands that are experimenting with NFTs blog post
There are so many articles, blog posts, etc. about NFTs, but this Verge article & the 101 Blockchains webpage addresses everything you want to know about these NFTs in a digestible format. From what can be currently seen on the digital landscape, the usage of NFTs is not one size fits all and is entirely dependent on the objective. These tokens are being used in a variety of ways, like promoting new releases, ideas, announcements,watching exclusive shows etc. Below are some examples on what different brands have been doing with NFTs as recent as July 2021:
Stoner Cats, a short-form adult animated cartoon about sentient cats starring Jane Fonda, Mila Kunis, Chris Rock, etc., is using NFTs as a way to get exclusive content. Orchard Farm Productions, the production company, is experimenting with this new format to not only test this type of model for future projects but to also connect directly with the audience. These creators and the production company want to be able to communicate directly with the fans and provide them with content they want to see and bypass all the bureaucracy that comes with running on a show on a television channel.
Warner Brothers (WB) released 91K NFTs on Nifty’s, a start-up with a focus to “create a place to collect, discover, and curate digital art and collectibles across the NFT universe”, to celebrate the upcoming release of the “Space Jam: A New Legacy” movie. The Complex article writes that WB was giving away one exclusive randomized, Space Jam 2 themed NFT with every sign up to the start-up and the ability to earn a second NFT through sharing a social media post from Nifty’s or spending an additional $2.99 leading up to the movie release. This is an interesting concept because it’s not only promoting the movie, but also getting people to sign up with a specific start-up that was created to distribute (amongst other actionable items) NFTs. It’s a joint venture where not only does WB get to be the first major motion picture to employ this technology (and most likely won’t be the last) but also potentially create a partnership with an up and coming platform.
Campbell’s Soup recently did a NFT drop to announce their rebranding of the iconic soup label. This is an interesting case study since it not only used NFTs to talk about rebranding the iconic logo but to also collaborate with a local, well-known artist, promote these exclusive designs and give the profits back to charities. This past July, Campbell’s Soup announced that for the first time in 50 years, they will be redesigning their iconic Soup Can packaging to have a more modernized logo scripture while keeping the iconic red-and-white imagery. Linda Lee, Campbell’s CMO, mentioned in a statement that the company has been “on a journey to reimagine this iconic brand and appeal to new generations of consumer who are cooking at home more than ever.” To celebrate this new change, Campbell’s brought in Sophia Chang, a Street-Style Artist & Illustrator, to create a 100-piece NFT series and exclusive animated work to fight food insecurity with proceeds benefiting Feeding America. This was available via the livestream and shopping platform, NTWRK, and climate organization, Aerial, to offset the NFT’s carbon footprint.
Although these NFTs are colorful and are being utilized in various ways, there are some things that brands need to factor in and address during the planning stages, like potential legal ramifications. The Gibson Dunn law firm did a high-level overview back in April 2021 of NFTs and how these NFTs are being thought about in regards to the Intellectual Property, Profit Participations, Securities Law, and Climate Change laws. Their overview is that although NFTs provide a different form of content and allows content creators and owners to design things, there are outside factors that need to be thought of like storage limitations, costs, ownership, licensing agreements, usage, investment contract, energy conservation, etc. This is not the only legal analysis of NFTs but we can’t list every single one in the blog post :).
Just like everything else, there will always be a pro and a con when utilizing NFTs for future marketing/advertising campaigns. These are not the only pros and cons, but the ones to ideally keep in mind during when debating to use NFTs for an upcoming digital marketing campaign:
Pros
- Creating a one-of-a-kind content that offers ownership exclusivity
- Raising brand awareness in unique way
- Interacting with the customers and fostering current and future relationships
- Can have more than one objective (i.e. Campbell’s Soup)
Cons
- Potential legal ramifications like the environmental costs, copyright, intellectual property, true ownership of the NFT, etc.
- Not having proper blockchains or blockchain systems created/built to house the NFTs which can affect climate and energy consumption
- Having too many folks within the brand organization accessing the NFT marketplace
- No firm KPI benchmark to see if the NFT performed well
At the moment, there isn’t a specific best practice when utilizing NFTs for marketing campaigns. It’s entirely dependent on the objective’s artists, buyers, consumers, brands, formats to utilize, etc. From what can be seen, NFTs are being utilized to capture a moment in time for brands, entertainment purposes, charities, and even connecting with celebrities (i.e Tom Brady’s new NFT venture, Autograph, where fans can get unique digital collections and experiences from other celebrities and athletes). For now, what can be said is that these content pieces are a way for a brand to get their name out there that is outside of the traditional offline and online media tactics.
Authored by Genevieve Prendergast
seattleinteractivemm@gmail.com
-The SIMM Board