Retailers never get a rest: there’s always a new digital advertising platform to master. Today, NFT campaigns are the emerging medium. Though standards are scarce, fraud is rife and big wins are few, many retail brands have already tested the NFT waters.
As a former digital strategy executive at Starbucks and Amazon, and now a founder of Thred, an AI-driven NFT ratings-and-reviews site, I’ve been keenly following how brands use NFTs to engage with consumers. In the past six months, our team has compiled a list of over 250 branded NFT campaigns, and it’s growing every day. Brands as diverse as Applebee’s, Behr Paint, Burberry, Gap, KFC, Mastercard, State Farm and even the U.S. Postal Service have all launched NFT campaigns in the last year.
We wanted to figure out what makes some NFT programs successful — Nike, Chanel and The Hundreds, to name a few — while others fall flat. The simple explanation is that it’s early and brands are still experimenting. And after a tumultuous year in the crypto sector and a surge in counterfeit NFTs, brands are right to be cautious and deliberate.
At the same time, the experiments run by many retail brands strongly suggest they are approaching NFT campaigns with misaligned objectives and the wrong strategies. Thanks to the data we’ve gathered, there are a few observations that jump out about what makes NFT programs work well for brands.
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First and foremost, the best NFT campaigns are not solely transactional. It is tempting to set up an NFT drop as a one-and-done experiment. NFTs are minted, people buy them (or they get them for free), and then either keep or resell them. You measure success in terms of sales volume and the number of buyers. Easy, right? Not so fast. For most brands, the bigger opportunity is to use the unique properties of these digital assets to build buzz and enhance relationships with their customers. Holders of your branded NFTs should be able to unlock access to exclusive experiences, services and products in real and digital life. In other words, NFT campaigns have a lot in common with other digital campaigns: it’s all about engagement.
So what does it take to launch an NFT campaign that really connects with consumers? Below are three strategies brands can use to succeed with NFT marketing.
Build a community. Most of your NFT holders want to feel a sense of belonging and identity with your brand. To start building a community around your NFTs, create demand for them among your brand ambassadors — on social media and through influencer networks, for example. Establish semi-private forums on Discord where members of your community can connect with one other and with representatives of your brand. That will reinforce the value of access and belonging that a program like this can create. Always foster inclusivity in your community. Work with representative creative teams including many voices and viewpoints, and partner with brands that represent your values of diversity and inclusion.
Support secondary NFT sales. An important consumer benefit of NFTs is that they can be bought, sold and traded by their owners without the approval or authorization of any middlemen. Today there are thriving NFT marketplaces like Blur and OpenSea. Relinquishing ownership of loyalty rewards is a leap of faith — and anathema to many brands because they don’t view rewards as commodities — but it could create first-mover advantages. That’s because, ready or not, consumers increasingly expect total control and ownership of their rewards in exchange for their loyalty. Brands have an opportunity to give their consumers the control they want, including the option to sell their NFTs. In addition to the goodwill such a move would generate, encouraging verifiable trades of your branded NFTs could generate resale royalties. But most importantly, encouraging trading builds buzz and credibility among crypto-savvy traders, many of whom are hard-to-reach Gen Zers.
Use NFTs to drive revenue. Some brands sell their NFTs for nominal amounts or give them away, with the main goal being to build community and spur loyalty. But there’s nothing wrong with exploring ways to generate significant revenue from your NFTs too. For example, a brand could sell NFTs to 1,000 customers who use them to unlock access to flash sales of popular merchandise in limited quantities. Because these are NFTs, holders could decide to resell them on a secondary market for a profit, or continue to hold them and reap the rewards over time. In both cases, the brand generates revenue: from the initial NFT sales, from merchandise sales or from royalties on resales. Further, the brand could use some of the proceeds from the NFT sales to increase discounts and rewards given to the NFT holders. There are many ways to generate revenue from NFTs so that your campaigns are not just cost-centers.
Getting NFT brand marketing right will require trial and error and calculated risk-taking. Thankfully, the current NFT community of collectors and traders is overwhelmingly creative, a bit renegade, and mostly forgiving, so it’s a great time to experiment with any of the strategies above.
The most important thing to remember is that people don’t just want to own your NFTs; they want to do stuff with them. Whether owning your NFTs unlocks membership to a VIP community, bestows discounts and rewards or unlocks blockchain trading, make sure you don’t just “drop-and-forget” your NFTs, but instead embrace them as keys to unlocking and nurturing long-term relationships with your customers.
Ben Straley is CEO and founder of Thred, a community-powered, AI-driven search-and-discovery site for NFTs. He is a three-time startup founder and former executive at Amazon and Starbucks. Prior to founding Thred, Straley was President of customer data intelligence startup Brightloom. He previously served as Global Head of Outbound Marketing at Amazon and VP of Global Digital Products at Starbucks. He also co-founded social media marketing agency Spring Creek Group, acquired by Interpublic Group, and martech company Meteor Solutions, acquired by Covario. Earlier in his career, Straley worked in senior marketing roles at Disney, ESPN and Judy’s Book. He holds a BA from Colorado College and an MBA from Northwestern University Kellogg School of Management.
