Aug 18, 2022

about 5 min read

What Is NFT? And How Do Brands Utilize NFTs For Their Marketing?


What is NFT?

Advantages of NFT

  • Decentralized marketplace
  • Maintain uniqueness
  • Chance to make a profit
  • Security

Brands that utilize NFTs in business

The future of NFTs and Metaverse

Final words

What is NFT?

(Bored Ape Yacht Club)

NFT is an abbreviation for "non-fungible tokens," which are digital assets that may be exchanged at will. NFTs are tokenized, each NFT is unique and one-of-a-kind, which can be seen as a digital certificate of ownership that exists on the blockchain. Because it is "non-fungible," NFTs are not used to trade to equal value subjects; to be specific, bitcoin is a perfect example of a fungible digital asset because each bitcoin is valued the same as the others and exchangeable, NFTs, on the other hand, are unique and have no equivalent.

NFTs are the latest digital trend that has become a buzzword that nearly everyone heard. With the rise of the metaverse and digital transformation trends, NFTs are getting more attention as almost everyone can access this opportunity and seek what they can gain from it. A couple of years ago, NFTs and metaverse were common terms among the social media community. It is predicted that not so long NFTs and the metaverse could be intrinsically connected. 

Read more: How to create an NFT — and why you may not want to

Advantages of NFT

1. Decentralized marketplace

NFTs enable artists to profit directly from their work. Art is a perfect example, where someone would need an agency to sell and advertise their work. NFTs cut out the middlemen, allowing artists and original producers to communicate and deal with their clients directly. This strategy also helps the creators by allowing them to receive a commission when the NFT is traded.

2. Maintain uniqueness

Thanks to the nature of NFTs, the creature retains its uniqueness and exclusiveness, which makes the work more valuable. Moreover, it is beneficial for the NFTs’ owners because they can be sure that they are one of some individuals that own the collectibles

3. Chance to make a profit

All NFTs are collectible and only one of them may exist. Therefore, you may keep NFTs you bought as collectibles, and sell them when their worth will rise over time. Investing in NFTs for resale value can result in massive gains. Some of these antiques have been resold for more than 20,000 USD after the initial buyer paid only a few thousand dollars. They made almost 15,000 USD in only one deal by reselling!

4. Security

You may be confident in the security of NFTs. Blockchains are decentralized in nature, which means that the data they contain is housed at many nodes all over the world. At each node, there is always an identical database record. Even if the network goes down, there will always be a record of it somewhere.

Brands that utilize NFTs in business

In terms of numbers, NFTs are living up to the hype in the business sector, with NFT trading expected to exceed $17 billion by 2021. The release of Metaverse in 2021 is such a huge kick to push more NFTs, although the two novel concepts might be confusing. NFTs are generally associated with website browsing and transactions, while Metaverse is more about VR-based; nevertheless, many big companies, marketers, and celebrities explore the fruitful opportunities to stand out in the market with the support of NFTs. Honestly, NFTs are a big mainstream trend that almost everyone wants to grasp the opportunity in the near future.

Here are some of the most outstanding marketing projects and applications in real life you should pay more attention to:

Coca-Cola’s first NFTs collections on International Friendship Day

In order to further explore the nexus between cryptocurrencies and culture, Coca-Cola is leveraging its legacy of collectibles with its first NFT. 

In August 2021, Coca-Cola released its first collection of NFTs on the NFT auction platform OpenSea, with approximately $500,000 of the proceeds going to its chosen charity, Special Olympics International. A vending machine and a "Coca-Cola Bubble Jacket," which can be worn in the 3D virtual reality platform Decentraland, were among the NFT artworks in the collection. The auction as a single lot includes sealed "mystery boxes" from popular video games inside of multi-sensory NFTs housed inside of Friendship Boxes (which are also NFTs) that are packaged as loot boxes. 

Adidas and Prada collaborated in a NFT project

Pushing further into the NFT ecosystem in January 2022, Adidas Originals and Prada teamed up to announce an NFT project that features user-generated art. Photographs taken with a filter created by a digital artist were sent in by collectors in order to supply the raw materials for the special NFTs. Owners of NFTs from Adidas' "Into the Metaverse" drop were given priority for 1,000 of the 3,000 available spots for NFT participation. Lieberman then assembled the 3,000 photos into a single work.

Nike’s first NFT hoodie

The hoodie was initially unveiled in April and is Nike's first NFT clothing item. The brand's previous digital clothing was available on Roblox and Fortnite, but the AR Genesis Hoodie allows wear for both RTFKT Clone X avatars and actual NFT sweatshirt owners. The physical hoodie can wirelessly communicate with the digital asset thanks to an NFC chip that has been implanted in it.

The future of NFTs and Metaverse

(Washington Post)

The nexus between the metaverse and NFTs might be confusing because NFT is usually about website browsing while the metaverse is more about VR-based. Thankfully, despite the relative novelty of both concepts, some handful businesses have already developed inventive and successful ways to use them both at once. In the future, if you can see the chance to utilize both of these ideas, you are one of the first companies that take advantage of both technology trends. 

It is predicted that NFTs and the metaverse in the future could be plainer and easier for as many organizations approach instead of only big corporations and celebrities. 

Final words

To sum up, NFTs in marketing is relatively risky yet there are still positive statistics about it. According to HubSpot Blog Research, 39% of people who use NFTs claim that they have the best ROI of any channel in their media mix. In a survey, 16% of marketers said they planned to use NFTs for the first time in 2022, indicating that it is still largely uncharted territory for them.

Read more: How Brands Use NFTs for Marketing: Are They Really Worth The Hype? 

Furthermore, the combination of the metaverse and NFTs in the future is still a big question, hopefully you can have a general base of NFT and its relationship with the metaverse. You should now be aware of the two concepts' main principles and be able to predict where the market is going. If you decide to incorporate NFTs and the metaverse into your company, it could be a fantastic opportunity to distinguish yourself from rivals and position your company as one that is focused on the future.

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