NFTs for Brand Loyalty 2.0: The Future of Digital Marketing

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Since it first became widely used in the 1990s, the internet has advanced considerably. The early days of the internet (Web 1.0), when users could only consume content, have given way to the more interactive and user-focused Web 2.0 of today. We’re currently entering the “Web3” era of the internet, a decentralized web fueled by blockchain technology.

In Web1, marketing initiatives were concentrated on raising awareness and increasing website traffic. With the rise of Web2 and social media, marketing has focused more on customer engagement and relationship building. Web3 is ushering in a new era of marketing, one in which importance is placed on authenticity, trust, transparency, and ownership.

The use of NFTs is already being tested by well-known brands. Together with the Bored Ape Yacht Club, PUNKS Comic, and gmoney, Adidas launched an NFT campaign. Since its launch in 2020, NBA Top Shot, a platform for buying and selling digital collectibles of highlight sequences from NBA games, has experienced explosive growth. Additionally, verified NFTs can be used as profile pictures on the social media site Twitter.

NFTs will undoubtedly play a significant role in the future of digital marketing as Web3 gains traction. The brands at the forefront of this shift are investigating new and genuine ways to connect with their customers by utilizing the NFT technology at its core. Nevertheless, the NFT itself doesn’t possess any magic. The NFT is unique because of how it is used.

Companies that excelled at NFTs

NFTs entered the mainstream in 2021. While there were some well-publicized failures, some brands completely nailed their NFT launch.

The most effective NFTs share a few characteristics. For starters, they are consistent with the brand, allowing customers to immediately understand how the NFT fits into the overall brand ecosystem and narrative. As these are the people most likely to be enthusiastic about and invested in a brand-related NFT, they are also directed at the brand’s current community. Finally, they are genuine and rare, two characteristics that are crucial for any NFT, regardless of the possibility of a later resale.

Let’s examine three companies that did NFTs well in light of these traits.

The first is Nike, which collaborated with RTFKT Studios on the Cryptokicks project. The project, which dealt with collectible digital sneakers, didn’t stray too far from their established model, which was based on the rarity of real-world drops. In contrast, NFT owners would split future royalties from secondary sales with Nike and RTFKT. Five years ago, we couldn’t have imagined the “fan-as-owner” model that existed today.

The fact that thousands of NFTs quickly sold out at prices of up to nearly half a million dollars each shows that Nike fans were clearly enthusiastic about the project. How did they accomplish it? Simple. Many people will hold these limited-edition sneakers in the same way they hold Nike sneakers in the real world, i.e., as a prized possession to flaunt to their friends because the project was on-brand and targeted at existing fans.

The second brand is Time, which in March debuted its first NFT project with a three-part collection of digitized magazine covers from earlier decades. It was an exquisitely on-brand project that offered fans the chance to acquire a special digital piece of Time history. NFT holders could gain access to free Time subscriptions and other perks essential to their enjoyment of the product. This past year, Time generated additional revenue from NFT drops of over $10 million.

The last album is Space Beyond by internationally renowned digital artist Carla Chan from La Prairie, Switzerland. The project involved creating everlasting, generative digital art using real-time environmental and demographic data from the world’s 31 most populous cities. The initiative resulted from La Prairie’s company’s commitment to the environment and the arts.

These three brands have two things in common: they figured out how to use NFTs in a way that was both valuable to their current fans and true to their brand identity.

Brand NFTs 2.0: The focus is on real utility

In NFT 1.0, hype and speculative ideas predominated over utility. NFT 2.0, which was influenced by well-known brands, will go far beyond investing speculatively in collectibles, skins, and footwear. It will go far beyond coupons, rewards, and gated content.

A discounted subscription’s fundamental utility is insufficient to spur significant adoption. The same is true for tickets to an event. It is improbable to think that communities of super fans would break down barriers to obtain a discounted subscription or event ticket. An NFT needs to provide a genuine utility that is worthwhile the time or financial investment for it to truly take off in the future.

Additionally, if you want to reach the top 1% of your brand’s brand loyalists or super fans, NFTs that only concentrate on basic utility are the absolute wrong place to start. Royalties, rights, and returns—such as a percentage of sales—will be included in NFT 2.0. By giving users a stake in the brand, they will encourage them to hold the NFT for an extended period of time. a potent strategy for converting brand admirers into brand proprietors.

Additionally, the NFT drops will be true to the name and goods that your customers adore. They will increase their affinity for the brand by facilitating one-of-a-kind, valuable connections, and interactions. A customer might, for instance, buy an NFT that grants them early access to new products or even a say in corporate decisions.

Designing an NFT 2.0 strategy that emphasizes shared value creation and draws customers closer to the brand, purpose, or products they already believe in is crucial for businesses.

Increasing Customer Contact

To stay competitive as brands transition from Web 2.0 to Web3, they must implement new technologies. More initiatives are focusing on creating open-source bridges between Web 2.0 and Web 3 so that businesses can integrate tokens, smart contracts, and other blockchain technologies with their current websites, systems, and data.

Brands must be able to identify and react to NFTs in a user’s wallet in order to benefit from some of the use-cases covered above, such as enabling early product access and revenue sharing. Brands can engage with their customers in fresh, creative ways by identifying and responding to any NFT in any user wallet.

Brands can use NFTs as a new connection bridge between high-value customers and the brand products and services they love by being able to recognize and respond to NFTs in real time via a brand website or loyalty program.

For instance, by virtue of possessing the team’s NFT, superfans of a specific sports team may be granted exclusive access to merchandise or VIP experiences. Similarly, by participating in the brand’s NFT, customers of a luxury fashion label may be granted early access to new collections or invitations to exclusive events. Further still, by holding the brand’s NFT, customers might be given the chance to participate in the profits made by the company.

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