In the world of digital consumerism, non-fungible tokens or NFT technology is still a relatively new trend. Even though it has not been around for very long, it’s created such a long-lasting impact in its short lifespan that it will be transformative for the ecommerce market in the years to come.
The Impact of NFTs on Brands
NFTs are individually certified, verifiable and non-interchangeable objects. Made complete with unique identification and metadata, they are a real one-of-a-kind entity with usually just one sole owner at any given period. Recently, retailers like Nike, Adidas and Under Armor have entered the NFT arena with digital goods like virtual sneakers and they were very successful with their early drops. Notable brands are inclined to invest in NFTs even if it seems premature, because they understand that the use of NFTs grows the user experience, expands brand awareness and develops new opportunities for brand engagement.
The explosion of NFTs over the last two years has been significant, and the market has seen about a 10X growth. The most expensive NFT artwork ever was just purchased in December 2021. Pak’s The Merge was sold on the NFT marketplace and fetched the record-breaking sum of $91.8 million. What’s so special about this particular NFT? The Merge is actually owned by 28,983 collectors who each purchased a portion, or ‘mass,’ of the NFT for $575 when the sale first began. Are you starting to see just how big of a deal this is?
It’s clear that NFTs are not going away or slowing down anytime soon. Because this is the case, brands need to understand and consider how NFTs can best work for them. And the great news is that brands don’t need to spend an obscene amount of money to do this.
One example of a potential use for NFTs is online advertising campaigns, which can be distributed strategically across different digital platforms and monetized multiple times. NFTs can aid a brand’s equity, promote a product launch or company event, or be utilized as a type of customer appreciation, acting as a distinctive custom present or coupon. As this trend continues, brands will notice a unique form of revenue unraveling with NFTs, as products can now be sold in a completely digital format rather than a physical object.
NFTs Growing in Popularity Amongst Influencers
The most notable advocates of NFTs are most likely going to be influencers. These digital goods enable the revolution of the creator economy. NFTs offer unique ways for creators to monetize their content while increasing engagement on their social platforms. Yes, many influencers are already bringing in a large amount of revenue, but sometimes the means by which they bring this income in are minimal. NFTs offer something that collaborations or brand partnerships haven’t offered until this point — an entirely new and unique way to create revenue and facilitate content strategy.
Just like certain well-known brands that have already begun to hop on this trend, several significant influencers have already started leveraging NFTs as well. For example, creator Logan Paul purchased over $3.5 million worth of NFTs in just one day by selling his set of Pokémon-inspired items. While this might seem a little impossible, especially for smaller brands or influencers, it’s important to note that NFTs offer prospective sales potential. NFTs can be created to allow royalties, meaning the creator or influencer gets a share of the future sales whenever their item is sold on NFT marketplaces.
NFTs naturally seem to fit with influencers who have content surrounding fashion, art and lifestyle. However, content creators from other genres have begun to get involved, such as gaming influencers who have already started selling in-game objects and items as NFTs.
What the Future of NFTs Holds for Brands and Influencer Marketing
With a growth of 328% in NFT transactions from just the first to the third quarter of 2021 alone, the NFT market completely took off this past year, and the trend is only expected to keep increasing. NFTs are unique in that they can decentralize commerce while increasing transparency. They also allocate greater creativity for campaigns while creating a new opportunity for peer-to-peer transactions.
The opportunity for what an NFT can be is also ever-expanding and has allowed for so many creators to flesh out their innovative ideas. This is just the tip of the iceberg! From music to artwork, videos, virtual houses and online races, digital collectibles will continue to grow in type and originality. In addition, the number of marketplaces that sell NFTs is only increasing, and all of this is just the beginning.
The most important takeaway for brands and influencers is to note that NFTs are not just a current trend or the latest fad. They are actually unique digital objects that exist only in the digital ecosystem but provide value in the real world. As society becomes more and more focused on digital, NFTs will grow as businesses and individuals use them as investment opportunities for the new virtual environment.
In 2022 physical assets may remain the favorite of most, but NFTs represent the future. Whether it be a digital art piece, virtual collectible or selection of music, NFTs enable influencers and brands to have a unique opportunity to leverage both intellectual properties and digital content.
Vinod Varma is Founder and CEO of Creator.co. He is passionate about building products and brands that contribute to the Creator Economy, a sector he believes is poised for serious disruption with the emergence of Web3 and decentralization. With over 10 years of sales and marketing experience, Varma was previously the Buyer at Best Buy and helped brands like Fitbit, Samsung, Garmin, Sony and more build awareness, trust, and significantly capture market share. Creator.co is a globally recognized (top 5) influencer marketing platform that has worked with brands like Walmart, Target, Crayola and more. The company pushes the boundaries on how creators and brands can collaborate, grow and earn more together. Varma also serves on the advisory board of The Influencer Academy and as a business mentor for League of Innovators.