Christie’s selling a work of art for $69 million doesn’t usually raise many eyebrows. What made the artwork sold in March 2021 different? Perhaps it was the fact that it wasn’t a canvas or even a sculpture.
In fact, it was Beeple’s Everydays: The First 5000 Days, a digital NFT. This sale—which was the most expensive digital artwork ever sold—marked a significant shift in the art world, redefining what “value” means in terms of art ownership.
So if they can sell for the same price as a painting from a classic artist, what’s the down-low on NFTs? They seem to be everywhere, yet few people really understand what they are. Standing for Non-Fungible Token, it’s a form of digital asset that has proof of ownership built in (by way of blockchain identifying codes), making each piece verifiably unique. Meaning? For the first time, a digital asset—art, gifs, collectibles, designer sneakers, tweets, you name it—can hold just as much value as the “real” thing since it can’t be copied infinitely.
There’s a lot of buzz around NFTs lately, but behind all the froth, it’s easy to miss the big picture: it’s not just an activation gimmick but a fundamental building block to our future, digital selves.
Cue: Web 3.0. If Web 1.0 was about simple graphics/text and 2.0 is about two-way social content, 3.0 represents the metaverse and the virtual worlds where we’ll be living—and duplicating—our lives. In this world, the status that comes from owning something unique digitally matters. And this is where NFTs come in, as they make that digital house, dress, or kicks truly one of a kind. Forget about campaigns for a moment—NFTs are changing our world. How?
Redefining Value – Digital over Physical
Whether digital or physical, an asset is only valuable when scarce. Just as gold’s scarcity acts as a store of value in the real world, NFT’s proof-of-ownership acts the same way. Now, owning a digital asset can be as valuable as the real thing for the first time. Banksy’s infamous art piece, I can’t believe you morons buy this, was sold for $95,000. When the burning of the Banksy art was digitized as an NFT, the authenticated art now lives permanently as a digital asset, increasing its value to $382,000.
Redefining desirability – Digital Scarcity vs Real World Status
Just as cult brands like Supreme and fine art are catalysts for their communities, the rarity and novelty of NFTs have become a type of social currency, status, and point of connection, whether in real or virtual worlds.
Bored Ape Yacht Club (BAYC) is positioned not only as the world’s most valuable collection of NFTs but as a virtual community and club. Owners like Eminem and Timbaland unlock exclusive perks, such as add-ons, events, and games.
Beyond a say in where the project’s funds are invested, owners are also entitled to commercial rights to their ape designs. With the launch of ApeCoin underpinning future transactions and games, BAYC is building an immersive ecosystem to rival that of today’s social media giants.
Redefining Identity – Valuing Digital-Self
As we spend more time virtually, we’re reaching a tipping point where curated digital identities can be more important than in the real world. The currency? Identifying markers such as Gucci clothing, RTFT shoes, Jacob& Co watches, and shopping at Metajuku real estate—all minted, purchased, and flaunted as NFTs.
NFTs are a fun, trendy way to redefine how brands engage consumers. But beyond the initial novelty of being “first,” brands must think hard not to make it a single-note gimmick. How can brands leverage NFTs the right way?
Create Real Value
Just because anything can be minted doesn’t mean everything has value. From killer design to smart co-branding, make sure there’s a real source of equity, utility, and desirability. In Adidas’ Originals drop, buying a physical pair of kicks “burns” and upgrades the NFT version, creating both scarcity and an incentive for sales.
Make It an Experience
From limited-time-only drops and fan collaboration to unlock secret content and activation, make it a well-layered experience—just like any good campaign. Rook Perfumes’ four-month NFT experience not only involves a limited-edition fragrance but also lessons with a master perfumer, co-creation rights, and drop-in chats.
Think Through Sustainability
When crypto’s carbon footprint is increasingly under scrutiny, think of how you can address sustainability concerns. Brands like Kia are launching NFTs on platforms that support more sustainable blockchains, such as Tezos while brands like Prada dedicate NFT proceeds to offsets its environmental impact.
Speak to Your Audience
Make sure your audience demographic, interests, and brand positioning match what your NFT engagement offers. Otherwise, you may face serious backlash, such as else MeUndies, an environmentally conscious brand whose fans rebelled against its NFT announcement due to the campaign’s carbon footprint.
The bottom line: While NFTs are the shiny, sparkly “next big thing,” in terms of brand activation, first-mover novelty is already over. But that’s not to say NFTs are passé. Just like any good campaign, brands need to think clearly about what their marketing objectives are to know whether NFTs are right for them.
Is it to generate buzz? Think of how the right collabs can give you cachet. Is it to build ownable IP? Think of NFTs not as assets but as storylines and characters. Want to build your brand? Think of how NFTs can tell key components of your brand story, such as Evian’s Alps-themed art series.
Fitting NFTs into your overall marketing campaigns can help you engage with consumers in new and exciting ways. With a bit of strategy, you can avoid jumping on the bandwagon and instead deploy NFTs with the thought and purpose required to delight your consumers while providing value.
About Steven Soh
Steven has over 19 years of experience in helping regional and global clients develop their brand identities through to packaging design. He has worked with brands such as AXE, LUX, Pond’s, OMO, Bintang Beer, Tiger Beer, Johnnie Walker, United Spirits, Kellogg's, Singapore Airlines, International Olympics Committee, World Kitchen, 3M, Friesland Campina and Coca-Cola.