Industry watchers believe that NFTs can forge a more meaningful relationship with the customers, boost brand loyalty and open up more avenues for collaboration
Once all the rage in cryptocurrency circles and digital markets, Non Fungible Tokens (NFTs), pieces of media and or art ranging from GIFs of legendary NBA players to animated (but bored-looking) primates to random video clips (the first known NFT called Quantum, created in 2014, by digital artists Anil Dash and Kevin McCoy, featured a short video of the latter’s wife), have steadily declined in value over the past several months, with the average price of an NFT sale having declined by 92% since the beginning of May 2022, according to Chainalysis.
However, their value as proof of customer loyalty and opportunities for collaboration between brands is just getting started.
Sukrit Singh, Founder of The Platf_rm, XP&DLAND and Metaform harks back to the first wave of popular NFTs, which retailed in hundreds of thousands of dollars, and comprised pixelated art, bizarre collectables, and more. He quips: `“But the ones that survive have utility. BAYC or the Bored Ape Yacht Club – isn’t just a series of cartoonish monkeys but a community of rich young yuppies who have exclusive access to experiences. The real value of NFTs is in the long tail of utility – be it vanity, convenience, social or entertainment. The future is O2M2O- Online to Metaverse to Offline. Where what you own digitally gives you real-world benefits.”
Vivek Kumar Anand, Director – Business & Innovation DViO Digital, believes that with this utility factor of NFTs, which are still in their infancy, it’s the right time for marketers to join the bandwagon in a meaningful way.
“This will draw attention and build a tribe of followers. Right now, NFTs seem inextricably intertwined with digital collectables and are the way to go about it. One way to leverage it is to brand launch its signature sonic, jingles, and mascots on NFTs and use the money for a worthwhile cause. It has the potential to create enough chatter and will draw the required attention. Imagine Nescafe listing its iconic sonic as NFTs or Nirma listing its iconic jingle “Doodh ki safedi, Nirma se aaye” for a greater cause,” he observes adding that iconic mascots, Amul Girl, Parle-G Girl, Lijjat Papad – Rabbit, Vodafone – Zoozoos, Air India – Maharaja, and Indian Railways – Bholu also have a great opportunity to shine bright and be a memorable campaign in the NFTs.
Addressing the idea of a marriage between an NFT collection and the brand, Amanjot Malhotra, Country Head – India, Bitay, notes that most brands don’t aspire, in the long term, to remain in the business of creating and selling digital art.
“Connecting your NFT collection to your brand identity is essential as Nivea has done with their non-fungible touch collection. Brand perception can also be enhanced with a novel philanthropic dimension. Budweiser’s sponsoring of 22 rising musicians via their Royalty NFTs creatively uses the capabilities of NFT technology for micro-sponsorship, allowing the brand to rise above the more prosaic philanthropy of “donating the proceeds of my NFT drop” that numerous others have already tried,” says Malhotra.
However, what’s possibly most interesting about NFTs is the kind of engagement they can create between the brand and its consumer base. Suveer Bajaj, Founder, Zoo Media, XP&DLand and Metaform, believes that the concept of NFTs allows for fractional ownership of intellectual property inside a brand, saying, ““This means that today if I feel a sense of ownership for a particular brand, my loyalty towards that brand is going to skyrocket incredibly. Further, as an NFT stakeholder of the brand, the customer becomes a fraction owner of the brand. Because my loyalty to the brand increases significantly, my affinity to add value to the brand’s life cycle also keeps rising.”
“So talking about utility cycles, it’s my job to obviously benefit from the utility that the brand is being able to provide to me, but it’s also my job to keep giving back to the community, And that’s where the concept of co-creation actually comes from, where the community tells you what direction it’s heading in, and therefore what direction the brand should evolve or pivot in, in order to meet its customers’ needs and therefore, in its truest sense, stay relevant to its target audience. And this is what NFT has actually allowed for,” adds Bajaj.
Acknowledging the drastic drop in value in consumer NFT marketplaces, Singh concludes, “As in any tech revolution, the first wave is the bogey! When dot coms went bust – the naysayers predicted doom and gloom but look at e-commerce, entertainment or social media now. Each idea will have a precursor in the dot com age. Technology finds utility – and that’s what drives progress.”
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