Brands and NFT

Last year, one of my colleagues made thousands of naira from selling her artwork as NFTs (non-fungible tokens). When I heard this news, I was intrigued. Who wouldn’t be? The concept of selling an idea and earning such an astounding figure was simply amazing. Over the months, the term NFT has cropped up in my conversations with people, always accompanied by another rich story—literally. Digital words such as metaverse, blockchain, and cryptocurrency are also used during these discussions. I must admit, when thrown at once, these words can be overwhelming to a non-tech-savvy individual.

Unquestionably, my friends and I are not the only ones who feel fetching sales via ledger technology is brilliant. Statistics don’t lie, and the figures from the post-COVID era show crazy spikes in the number of NFT users—both sellers and buyers. Among these participants are multinational brands, such as Coca-Cola, Nike, Adidas, McDonald’s, and Gucci. Hence, the question of what an NFT is—its novelty and possibilities—has become a leading topic in the tech communities of today.

A non-fungible token (NFT) is a unique digital asset on a blockchain. These assets have distinct identification codes that certify authenticity and ownership, allowing for crypto marketing. Unlike other cryptocurrencies, which are fungible, that is, mutually interchangeable, NFTs are non-fungible. The best way to understand this is to consider a cryptocurrency, say bitcoin; a bitcoin can be exchanged for another bitcoin of equal value. This cannot be done with NFTs; one NFT artwork or project cannot be exchanged for another. This makes NFTs non-fungible. The ‘T’ of NFTs, i.e., tokens, could be art, music tickets, game avatars, sports cards, or even tweets, with each possessing its own distinct worth.

According to the data from nonfungible dot com, in 2020, NFT’s 75,000 buyers and 32,000 sellers soared to 2.3 million and 1.2 million in 2021, respectively, with NFT trades hitting over $17 billion. This growth created a global buzz that has been compared to that of the 1980s', when the World Wide Web was first invented. The doors opened by this big wave are what drive many brands' engagement with NFT, the most relevant of which are marketing influence and money-making.

Since the birth of the Internet, marketing has experienced a growth in positive dynamism—it's never been easier to tell the world about what you sell. So, first, when NFT became a trend on the Internet, businesses saw possibilities for creating brand awareness. More intriguing was the press and publicity that accompanied each of their expensive engagements with NFT.

Coca-Cola is known for pouring quality resources into marketing, and for years, they have bagged the recognition of being the best-marketed brand. It's no surprise they jumped on the NFT bandwagon in July 2021, releasing their first NFT collectibles. The success of this can be associated with their ability to maintain the constant themes associated with the Coca-Cola drink—these themes are happiness, joy, and friendship.

Secondly, brands understand the power of persuasion. A good response from the targeted audience leaves an impression on non-consumers of the goods; the mass-pressure effect of consumers purchasing NFTs can result in broader participation, of both consumers and non-consumers, and subsequently a larger fan base for the brand.

Thirdly, according to Anatoli Colicev in an article published in July 2022, NFTs can be used as representations of brand components, for example, products and logos. Brands such as Nike have turned their physical products into NFTs. What this does is strengthen the sense of ownership in customers of purchased goods.

Fourthly, brands involved in NFTs have budding but buzzing online communities. Customers develop a sense of belonging to something bigger than the products the brands offer, and this also creates a loyal fan base for the brands.

Finally, NFTs provide channels to increase profits. Coca-Cola made over $500,000 from selling its first NFTs. A rise in digital transactions is a progressive step towards the establishment of the metaverse, the future of the internet, involving seamless social interaction between humans and 3D virtual worlds. The reality of the metaverse will bring immense profits to smart brands.

The future of NFTs is dependent on their increased adaptations around the globe. So far, there are many who do not understand NFTs, their production, utilization, and possibilities. These technicalities could serve as a hindrance to the market. Already, there are reports of a decline in the market value of NFTs. This doesn’t contradict the many advantages they offer. Clearly, NFT is one of the many steps driving humans toward the next generation of the Internet. Its ideas and impact may be around for a long time.

Keywords: Non-fungible Tokens, Blockchain, Cryptocurrency, Brands