In this digital era, companies are battling for differentiation across platforms and against competitors to reach higher visibility and quality engagement. For this, brands need to accomplish a solid presence on social media, working closely with content creators, who are the new form of word of mouth. And building quality content that allows the brand to build relationships of trust and interaction with their audience, to later convert into sales and higher customer value.
With the advent of blockchain technology, pioneering companies have found ways to go above and beyond and promote their brands through innovative and interactive ways to reach clients.
This includes using NFTs to garner recognition, widespread attention from the masses and ultimately use this new form of technology to drive their innovation growth across their marketing efforts to build brand loyalty.
What Are NFTs?
NFT stands for non-fungible tokens. These are file formats that a person owns and can trade for a digital currency like Ethereum or bitcoin. An NFT can take the form of any file format such as PNG or MP3 files that can be created and sold on cryptocurrency marketplaces.
To comprehend what non-fungible assets are, it is important to understand what a fungible item is. Fungible assets are items that have equal value. For instance, the value of one dollar is equivalent to that of another dollar.
By contrast, the value of non-fungible items is unique only to the item in question. Diamonds and art collection pieces fall neatly into this category. It is nearly impossible to find two diamonds with identical characteristics, resulting in a difference in value.
Beyond NFTs being transferable files of data, they provide brands and creators the benefits of blockchain networks, such as:
- Uniqueness: The unrepeatable factors that make them non-fungible can get verified on a blockchain. This assures the owner of the authenticity and exclusivity of the digital asset.
- Permanent capability: Information in messages, images, music, signatures or any other type of data is stored permanently.
- Programmable: within a blockchain, NFTs are pieces of coding. This allows the token to be programmable to acquire various qualities, such as royalties. This implies that the creator of the NFT would obtain royalty or revenue from overall secondary sales of their digital token.
- Digital ownership: that who has an NFT in their crypto wallet, owns and controls the NFT. Different for example from website domains, where brands are not the owners, but instead a middleman such as GoDaddy.
How can brands and influencers Create NFTs?
The creation process of an NFT can sound complex and challenging. However, this is far from reality as the process can be done in a few simple steps:
- Definition of the NTF file type: The token file can be in the form of an MP3, JPG, GIF, 3D files like GLB, MP4, MOV and more. Therefore, the first step is to create the original file.
- Set up of a digital wallet: This will be the digital place where the cryptocurrency to sell, buy and create NFTs will be stored. The wallet will allow the owner to create and access accounts on the NFT marketplaces securely.
- Cover the cost of the first NFT creation: For the first token creation, a small amount of cryptocurrency needs to be acquired in the form of Ethereum. There are a few fees associated with turning content into NFTs on most of the digital marketplaces.
- Connection to NFT marketplaces: The digital wallet will need to be connected to all NFT marketplaces where the tokens will be sold, such as Rarible. Once the connection is made, the account on the marketplace will be automatically created.
- Upload of content file: Once the content file is uploaded into the marketplace, a form will need to be filled to determine the type of NFT to be created (single piece or multiple NFTs of the same piece) and further define the rest of the token characteristics.
How Can Businesses Leverage NFTs To Build Brand Loyalty and Improve Outreach?
Statistics show that buyers, especially millennials, already have an increased affinity and knowledge over the management and trading exercise with digital currencies. According to the Pilpsay 2021 study, 47% of Americans are looking to purchase products and services using cryptocurrencies, and 42% believe this digital form of currency will replace traditional forms soon. Furthermore, it was found that 49% of millennials own cryptocurrency, followed by 13% of Gen Z and 38% of Gen X in the US.
Clearly, this is a field poised to grow by leaps and bounds soon. It's time for brands to take full advantage of the opportunities that NFTs have to offer and use it as a platform to innovate and disrupt their markets with new strategies to raise awareness, develop new consumer journeys and increase customer value and loyalty.
Influencer marketing will be a perfect strategic partner and a pivotal element to elevate the new digital experience by bringing in the trust, proximity, and authentic value of content creators with their audience, into the strategy mixture.
Appealing to Consumer Values.
Research shows that 83% of millennials, who are the most significant cryptocurrency user generation, are likely to purchase goods from companies that authentically and actionably share their values and commitments to global causes. Thus, NFTs provide businesses with the perfect opportunity to showcase and link their values and social missions to their marketing and commercial efforts, embedding this new technology for consumers to take an active part in the change.
Taco Bell used this very concept to attract buyers’ attention and elevate their social commitment message. They designed a GIF NFT available to be bought by users and pledged to give all the earnings from the project to charity. Not only did the GIF garner bids of up to over $3000 USD, but it also created a positive buzz around the company's social commitment, allowing people to take an active part in the project.
Taco cradle. GIF: Taco Bell
Adidas is also implementing this concept by designing an NFT digital jacket in collaboration with Fabricant. Since the product is fully digital, there is no waste produced in creating it. This showcases Adidas' care for the environment and innovation, which ultimately endears the company to consumers.
Creating Unique Experiences in collaboration with Content creators.
NFT technology opens the possibility for brands to create unique and exclusive experiences for users. When partnering with content creators that match the brand's values and purpose, access to these experiences can be done in the form of NFTs.
The exclusive content can be set up as a limited-time experience or a lifetime content that the audience can only access with the ownership of the brand's NFTs. This will open the possibility for consumers to have a new way of interaction with the brand in a new digital ecosystem and create an opportunity for the consumers to have exclusive access to a high-value experience with the influencer.
Creating Collectables in partnership with influencers.
Brands and businesses can also curate unique offerings in collaboration with influencers, such as product or service capsules in the form of collectible NFTs. For instance, in the fashion industry, NFTs are already going beyond supporting the rise of virtual avatars. Furthermore, brands create virtual apparel and wearable digital assets for users to purchase and build their virtual identities, with multiple collectible NFT items.
Brands and creators have a fantastic opportunity to revolutionize the industry with the co-creation of NFTs in unique content and experiences for their audience to build stronger bonds between the brand, the creator, and consumers. The possibilities are limitless.
Furthermore, this year the rise of new influencer communities revolving around the NFT world has started to take form and accelerate. Now, more than ever the term “Crypto influencer” is becoming more and more relevant, as platforms like TikTok are now hosting creator communities of “CryptoTok” and “MoneyTok”.
Last June, e.l.f. Cosmetics launched their first-ever NFT collection entitle Ne.l.f.Ts, which is soon to become a series of #CryptoCosmetics items of their most famous pieces dipped in gold and sold within a range of $5 to $9. The brand was able to amplify the launch of this futuristic and digitally driven strategy, through the power of the “CryptoTok” communities and beauty influencers such as Stephanie Valentine (@glamzilla) and Trevor Barrett (@trevor.j.barrett). They were able to find a perfect balance between crypto savvy and beauty enthusiasts TikTokers, achieving a positive and favorable response from the audience.
Courtesy of e.l.f. cosmetics
Key Takeaways and Learnings.
- NFT stands for non-fungible tokens. NFTs are a file format that a person owns and can trade for a digital currency like Ethereum or bitcoin. The file formats include PNG or MP3 files that one creates and sells on cryptocurrency marketplaces.
- NFT technology opens the possibility for brands to create unique and exclusive experiences for users and disrupt their creation of new customer journeys..
- NFTs are in their infancy, but their use is multiplying. Using NFTs to market products will give brands leverage over competitors as the crypto scene is not yet crowded.
- With the advent of blockchain technology, pioneering companies have found ways to go above and beyond and promote their brands through innovative and interactive ways to reach clients.
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