# Understanding the Impact of NFTs on Brand Strategy
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Chapter 1: The Rise of NFTs in the Branding World
The emergence of Non-Fungible Tokens (NFTs) has created a buzz among brands seeking innovative ways to connect with their consumers and explore new revenue avenues. But what do NFTs truly signify for brands?
NFTs gained significant attention in March when Jack Dorsey auctioned his first tweet as an NFT for nearly $3 million, followed by Beeple's stunning collage that fetched $69 million at a Christie's auction. This sparked a wave of interest from brands, celebrities, and agencies looking to engage their audiences and tap into this new form of digital expression. So, what exactly are NFTs?
A non-fungible token (NFT) is a distinct digital asset created on blockchain technology, representing ownership of tangible items such as artwork, music, videos, and more. Beeple's "Everydays: The First 5,000 Days," a compilation of 5,000 images crafted over 13 years, catalyzed the NFT phenomenon.
Are NFTs merely a fleeting trend, or do they hold potential for artistic remuneration, investment opportunities, or even modern collectibles? The consensus seems to be that NFTs are here to stay.
What is the purpose of NFTs?
The significance of NFTs varies based on whether you are an artist, collector, gamer, or businessperson. In this article, we will focus on their implications for brands.
Brands and the Fear of Missing Out (FOMO)
A significant number of brands are either engaging with NFTs or contemplating their involvement, driven by the fear of missing out. Research from The Harris Poll and R&CPMK reveals that approximately 47% of consumers familiar with NFTs express interest in brands offering them as commercial products, thereby presenting fresh opportunities for brand marketers to leverage these digital assets.
However, many brands are jumping on the NFT bandwagon without a clear strategy. How can NFTs genuinely enhance brand value?
Here are several innovative ways brands can utilize NFTs:
1. A Platform for High Engagement
Even traditional brands are finding ways to adapt to the NFT trend. For instance, Campbell's Soup redesigned its packaging with a modern aesthetic and celebrated the change by releasing 100 NFTs.
Linda Lee, Chief Marketing Officer of Meals & Beverages at Campbell Soup Company, stated: "We’re on a mission to reimagine this iconic brand and connect with new generations of consumers who are increasingly cooking at home, while honoring our rich history. Our first NFT art piece pays homage to our place in art and pop culture, utilizing the most contemporary medium available."
2. Promoting Social Good Through NFTs
Brands are harnessing the power of NFTs to enact meaningful change. Bacardi collaborated with GRAMMY Award-winning producer Boi-1da to elevate underrepresented voices in the music industry, addressing the fact that only 2% of music producers are female. Their Music Liberates Music initiative ensures that proceeds directly benefit artists and “fanvestors,” creating a deeper connection between creators and fans. In this way, NFTs empower content creators by allowing them to reach their audiences directly.
3. Digital Collectibles and Provenance
NFTs can help address specific industry challenges by serving as digital certificates that verify ownership and authenticity of unique items. In the wine industry, for example, NFTs combat counterfeiting. By pairing wine sales with NFTs, wineries can securely record ownership and provenance on the blockchain.
Robert Mondavi Winery addressed this issue by creating a limited edition package linked to NFTs that certifies the wine's origin. Wine collectors could purchase NFTs online, receiving a physical porcelain magnum of 2019 Cabernet Sauvignon corresponding to the digital token, designed by the porcelain manufacturer Bernardaud.
4. Unique Commemorative Experiences
NFTs present an opportunity for marketers to create exclusive commemorative items tied to specific events. For instance, the NBA team Dallas Mavericks has started issuing players' profile pictures as NFTs for fans attending games in person.
Mark Cuban, owner of the Mavericks, explained: "The idea isn’t to sell these NFTs for profit but to reward fans who show up. Those who scan in at the game will receive a commemorative NFT. It’s a value addition for all Mavs fans attending games."
These examples highlight just a few of the myriad ways brands can leverage NFTs to enhance their community engagement and brand strategy.
With the multitude of advantages and potential revenue streams available to artists and collectors, NFTs are revolutionizing the art market. The possibilities for brands are extensive, limited only by creativity.
If you're still uncertain about how to integrate NFTs into your brand strategy, consider referring to the continuously updated resource HOW BRANDS ARE USING NFTS on AdAge for inspiration.