NFTs: What Marketers Need To Know About This Digital Currency
(May 18, 2022) – Unless you’ve been living under a rock (or maybe a big pile of Bitcoin), you know the biggest buzzword in digital these days is NFT or Non-Fungible Tokens. This digital currency is a pretty big deal and if you’re involved in marketing, you need to know what they are, what to do with them and how they’re already changing consumer behavior.
To do that, we’ve got to travel back in time to where it all began: the internet.
The first era of the Internet is known as Web1. This was a linear content distribution model. In fact, it’s a lot like the broadcast TV model where there was a user and a screen. A system of websites acted like TV channels: when a user was done watching something, they “changed” the channel and watched something else. This web era basically summed up online life from 1995 to about 2005 or so.
Back in the day (yes, we went there), it was cool to say “web two-point-o”. But, if you were to say that now, it’s a dead giveaway of how out-of-touch you might seem. Web2 extended the reach into digital and allowed users to not only read and watch but also to write and create. This web era was responsible for ushering in social media marketing. Virtually every major digital marketing company today was born either late in Web1 (Google) or in the early days of Web2 (2005 to 2017). In case you’re wondering, Web2 is where most of the online world is still working right now.
There aren’t hard dates here, but the timelines reflect major advancements and subsequent shifts in both technology and public adoption, which is what we’re seeing right now.
Believe it or not – despite being hotter than hot at the moment – NFTs actually date back to 2017. Projects like CryptoKitties dropped the first widely collectable blockchain assets and, in December of that year, Bitcoin crossed over into mainstream awareness, which brought in the explosion of crypto.
So if you look at the evolution of web, here’s where you’re at so far:
If you apply a direct marketing approach, another way to look at the evolution is like this:
2002: Launch a client’s website
2012: Launch a client’s Instagram
2022: Launch a client’s NFTs
What makes Web3 different?
The key element of Web3 is the concept of digital ownership. This is new for many people. To illustrate, let’s say you find an image on the Internet that you like. You can right-click on it and save it. This copy (the saved one) is no better than the one that’s posted online. They are identical.
That’s essentially what an NFT is: digital scarcity and/or specificity. You can see when it was created, who has owned it, its past and current value. Those records are what a blockchain is. They cannot be altered, edited or changed. Ever.
What’s the big deal about NFTs?
Holding NFT’s can provide immediate community benefits as well as offer revenue generating opportunities.
- Holders of specific NFTs might be eligible for gated access to special community spaces like a Discord server. This is the concept of utility: a real-world application beyond the digital asset itself.
- A brand might release a collection of NFTs to draw awareness to a product launch or community benefit. They could be a series of collectables that community members hold, trade or sell for crypto-currency value.
- NFT profile pics allow for exclusivity/belonging which take a deeper meaning on social media. These are some of the most highly valued NFTs in use right now. Check out Google CryptoPunks or Bored Ape Yacht Club.
- NFTs can serve as tickets for events (online or real-world). NFTs in music can contain not only songs, but also album art, concert tickets, etc.
The most exciting thing about all this is the fact that we’re very early in the stages of this technology. Its arrival is a true paradigm changer. There are no rules yet; we’re creating them every day. This represents the evolution of community management in which tokenized communities are emerging, creating the intersection of content, social and ownership into a single execution.
What does this mean for marketing?
Make no mistake, big brands are watching…and taking notes. They don’t move fast but, when they do, they will move mountains to ensure widespread adoption among their audiences. At the same time, brands that are more nimble, responsive and a little bolder can experience powerful evolutions in customer relationships, community management and product innovations.
This is an industry still very much in discovery. Think back to when social media became “a thing”. A few brands dipped their toes in and, well, the rest is online history. In today’s marketing world, social channels are a must. Buckle up because we’re about to repeat that process all over again.
What’s the most impactful thing marketers can do right now? Get a crypto wallet, explore what’s happening in popular NFT markets like Opensea.io, and get a true sense of the crypto world. Clients will be looking to them for insight and help navigating this new digital currency landscape.
Looking for more info on NFTs? Let’s talk.