Industry weighs in on how brands can navigate the world of NFTs
A combination of a rapidly changing market and the digital transition into the world of Web3 leads to a lot of uncertainty for brands looking to capitalize on new opportunities.
Cindy Niu, a manager on the Brand Strategy team at Known, was featured on The Drum Network’s podcast episode “NFTs: The Brand opportunity in a volatile market”. The conversation was moderated by senior tech reporter Chris Sutcliffe and featured Known’s Cindy Niu, Anne Greenberg, a senior consultant of brand and content at design agency Frog, and Scott Cullather, president and CEO of INVNT Group.
Using NFTs for advertising campaigns to target audiences
In this episode, various takes were presented on Non-Fungible Tokens in this market and how brands can invest in them in both an effective and genuine way to advertise to their audience.
It is quite clear that the NFT space is constantly changing and brands will have to be ready to adapt in order to correctly take advantage of this opportunity. One of those changes includes a shift toward partnering the NFT itself with some sort of utility feature beyond just the Token. Cindy pin-pointed this change to send the message that, if a brand is going to use NFTs as an advertising strategy, it has to include some additional benefit to the consumer.
“During this time it’s more important than ever that brands, rather than viewing NFTs as these instruments of speculation, actually think about the utility that they are giving to audiences,” she says.
Utilities that were mentioned throughout the discussion included gift cards, loot boxes, and even Non Fungible Toilet Paper (aka NFTP). However, even though physical and tangible items are a draw for a lot of people, the group believes there are other types of utility that can create an even stronger bond between the brand and the consumer.
“One way to think about that is through tangible utilities,” says Cindy. “So whether that’s physical products and goods — it can also be social utility. That’s for things like community, status, or even bragging rights could come into play. I think for a lot of brands, particularly in the luxury or streetwear space, the lore and the storytelling around their products matters to their audiences.”
The “lore” and “storytelling” that Cindy mentioned, while useful, has one main contingency in order for a campaign to fully utilize the potential of NFTs. To put it simply, that contingency is authenticity.
Although NFTs are an outlet that can produce large amounts of revenue, Cindy, Chris, Anne, and Scott recommended that brands put that potential thought on the back-burner when creating a campaign in this space.
Cindy stated it is “important for brands to communicate why they are doing this and really making it clear that it is not a cash grab and that it is for the service of their brand story, the evolution of their brand, and the relationships with their audiences.” For brands, there has to be a clear message or connection to be made with the consumer.
How brands create that message or connection in partnership with NFTs is an interesting topic, and it ties into the previous challenge of authenticity. Cindy used her personal exposure of this scenario to describe its origin within certain brands that want to get right into the space.
“I think in our experience at Known, we have also been seeing the same thing where clients are really eager to get involved, but too many times it feels like it’s an afterthought.”
That “afterthought” that Cindy described was echoed by the entire panel, as it is clearly a common trend within the industry. The solution to this, as Cindy explained, is preparation and a thought-out strategy.
“What I would really like to see in the long-term is for brands to be integrating this NFT strategy more thoughtfully into their larger marketing strategy rather than it being an afterthought and making sure they have the infrastructure in place to invest in it being a success.”
“Infrastructure” was the key idea that Cindy brought up. The reality is that the infrastructure of a NFT plan could be as simple as community building, partnerships, or even merch drops. That foundation, or “infrastructure”, is what brands need to latch on to in order to enter the NFT space and be prepared to face whatever changes might come their way.
“Looking at how the world is changing and how we are increasingly putting emphasis on our digital identities online and different ways to curate and craft that, so long as that keeps happening and NFTs become a bigger part of that, I think there will always be a growing space for them in our world,” ensured Cindy.
“What I would really like to see in the long-term is for brands to be integrating this NFT strategy more thoughtfully into their larger marketing strategy rather than it being an afterthought and making sure they have the infrastructure in place to invest in it being a success.”
Market strategy adapting to a shifting NFT marketplace
The catch to all of this is that the wild world of NFTs could all change in an instant due to the sheer volatility of the NFT marketplace. The conversation happening now may not even be relevant in a month’s time. Crazy, right? While this is an unknown and constantly evolving space, one thing is for certain: there are many basic tactics that brands can choose from in order to ensure they are able to adapt along with NFTs. Since the digital world is moving at a rapid pace with the development and transition to Web3, what’s clear is we have to move along with it.
To listen to the full episode, head over to The Drum Network.
