In January of 2022, popular NFT marketplace OpenSea announced that it had $4 billion in trading volume in a single month alone. According to Forbes, the CEO of wealth advisory DeVere Group, Nigel Green, attributed this boom in NFT sales to an increase in global sports franchises, fashion brands, and celebrities utilizing digital collectibles.
With total NFT trading volume generating over $23 billion in 2021, it’s a great time to start integrating NFTs into your marketing strategy. Whether you represent a popular fashion brand, create innovative online content, or simply want to break into the digital market, NFTs can help. So how do you get started?
We’ll be going through why NFT marketing is effective, some effective use cases, and what you can do to make the most of the NFT platform.
Using a trendy marketing strategy can be useful and pay great dividends in reaching a much larger audience. But if you don’t have a clear direction and goal, it’s unlikely to be effective. The first step is assessing your brand or product’s current marketing strategy and understanding what NFTs can bring to the table.
The greatest strength of NFTs as a marketing tool is using them to build communities that engage with and advocate for your brand. Starbucks is kicking off their NFT marketing campaign with Starbucks Odyssey, a revolutionary Web3 platform that will reward members who engage with the platform and shop at their coffee shops with NFT digital stamps. Odyssey will also have a built-in marketplace where users can buy, sell, and trade their stamps. With enough collectible stamps, customers will have access to exclusive online drink-making classes, unique merchandise (with artist collaboration), and even receive invitations to unique events. Odyssey currently has a waitlist to join the app, and select members will be the first to explore the experience.
Starbucks is using NFTs not as a replacement for the products and services they offer, but rather as a way to enhance the user experience and buying journey. NFTs that provide exclusive perks, privileges, rewards, or membership to a community, are referred to as utility NFTs. The stamps collected with Odyssey act as utility NFTs, as they offer exclusive rewards that incentivise collecting NFTs. The Odyssey app will also create a digital community where customers can discuss and trade digital goods in-app.
Starbucks Odyssey is an effective example of how to build a NFT marketing strategy. NFTs are most effective when they are bought, sold, traded, and discussed. In other words, NFTs should create or strengthen a community.
What element of your brand strategy needs to be bolstered?
Brand Loyalty, Advocacy, and Engagement
With the key technology of NFTs enabling digital products to have verifiable digital uniqueness, it should come as no surprise that creating a one-of-a-kind brand experience is a main draw of NFT marketing. A unique brand experience with utility NFTs is memorable, visible, and keeps customers coming back.
If you’re a creator that already engages with a community on a platform like Twitter or Discord, utility NFTs are easily integrated into the discussion groups. Crypto art collection Cryptopunks offers a Discord Server that has a bot to announce bids, offers, and sales of products in their collection. Discussion groups and communities keep your brand active and alive so you’re always top of mind.
Having community engagement with NFTs be rewarded with exclusive perks improves the value proposition that you’re making with your customers. If those that engage with your NFT platform feel that they’re adequately rewarded, they will often advocate for your brand on their own.
Better Lifetime Value and More Purchasing Power
A customer’s lifetime value (CLV) is how much money an average customer is spending at your company. This can be measured yearly or over their entire “lifetime” as a customer. This can be measured by the dollar amount that the average customer spends on purchases in a designated time period and is generally a great metric for tracking your customers value.
Ideally, the lifetime value of your customer is higher than the cost it takes to acquire a new customer.
On average, you don’t want to be spending more in advertising to obtain a single customer than they will eventually spend at your company. You will be losing money, even if you acquire a lot of new customers. To increase a CLV, you want to attract new customers that have more purchasing power. That is, how much income they have and how much they’re likely to spend on your brand.
Civiscience conducted an independent survey where they asked a wide audience what their experience level was with NFTs. They found that many NFT buyers are from California, Hawaii, and Nevada. The 18-24 age demographic is the proportion with the most experience with NFTs (14% have invested and 18% are interested) with 24-34 coming in second (8% have invested and 11% are interested). Those that have an annual income of $150,000 or more were the most interested and invested in NFTs.
Effective utility NFTs have long term value and drop frequently enough to regularly attract new customers. The community surrounding utility NFTs also needs to be supported so there’s excitement and conversation about the perks of the NFT.
Brand Innovation and Experimentation
NFTs and cryptocurrency go hand in hand with SEO value. NFTs also represent company innovation as certain demographics look for more of a Web3 online presence. Corporations and celebrities have already started experimenting with NFTs to grow their brand and audience.
Large companies like Red Bull are experimenting with utility NFTs as exclusive event passes. Famous athletes like Tom Brady, Simone Biles, and Tiger Woods have partnered to create autograph.io, an exclusive NFT collection that's centered around buying and selling signatures of famous athletes. Taco Bell has listed NFT art on digital marketplace rarible that features art of signature menu items.
Beyond brand innovation, some companies have experimented with using NFTs to empower their projects. For example, Brazilian company Nemus has begun selling NFTs that represent different tracts of Amazon rainforest. Owners of these NFTs will effectively sponsor different sections of the forest with the proceeds from the NFT going to preserve and develop the forest. The token owners will also get access to exclusive imagery and information on the progress of the preservation. Nemus Founder, Flavio de Meira Penna, hopes to raise enough money from the first collection of NFTs to buy additional land to preserve. Nemus said they sold 10% of an initial offer of tokens for 8,000 hectares on the first day.
If you’re interested in testing the market to see if NFTs are right for your brand or using NFTs to complement your own projects, let's go through how you can optimize your strategy for the best possible outcome.
How to Make the Most of NFTs
Review your digital marketing plan to define your goals and challenges. What message are you sending across all of the channels your brand utilizes? What content does your audience want? What do they enjoy?
Your NFT should be designed around the research and marketing strategy that your company has already done. If there are gaps in younger demographics or a lack of community discussion about your brand, NFTs can definitely help.
We mentioned customer lifetime value before, but understanding your CLV and how it relates to cost of acquiring customers will dictate how many NFTs you create and make available for purchase.
Look for inspiration in other brand strategies. Red Bull, Autograph.io and Taco Bell are only a few of the many real-world use cases for how brands are utilizing NFTs.
Supplain.io, a Web3 supply chain company, has compiled a list of some of the top utility NFTs currently on the market. They feature sites like Axie Infinity, a blockchain game site that allows you to collect, battle and trade collectable NFTs called Axies. Or, CloneX, a site that lets you create NFTs of unique digital clothing that can then be purchased in real life. Or the Australian Open (AO), which was the first Grand Slam that minted 6,776 unique AO NFTs. These AO Art Ball NFTs were matched with 19cm x 19cm sections on the tennis court. If the championship point landed on the plot, the NFT Owner would receive a prize. These AO NFTs also provided users with limited-edition wearables and merchandise.
Consider $FWB, a cryptocurrency that allows its owners to connect and network in the real world.
These are just some examples – the possibilities are endless. It’s ultimately up to you to determine how NFTs will fit into your brand. Compare the goals and challenges you’ve identified to see how NFTs will line up with your marketing strategy. What will an NFT provide that other services or products can’t? How is your NFT unique from others? What exclusive perks do customers get that drive the value of your token?
Once you have a plan, map it out to see what your deadlines and deliverables are. What will it take to mint an NFT collection? What community capabilities do you need to have? Do you need a separate app to collect and trade tokens in your collection?
Being transparent with your customers is also a great step for improving their trust in your brand. If they have a clear understanding of what they’re buying into. If they’re receiving the deliverables that you’ve mapped out in your project, they’ll be more likely to trust and buy into future endeavors that you propose.
Having clear communication and goals is also beneficial for getting other stakeholders in your organization on board. This may not be necessary if you’re an individual creator but can potentially be essential, depending on business size.