NFTs in marketing
nftmarket and non-fungible tokens (NFTs) are being fueled not least by media-savvy sales such as Jack Dorsey's $2.9 million NFT tweet or the sale of the Beeple NFT for $69 million, and are increasingly being discussed in companies as a hot topic in online marketing. This is because NFT marketing opens up new options for interacting with individual target groups and customers. The team at our full-service agency has looked into the trend and provides a compact description of how NFTs can be used in marketing.
What are NFTs?
The abbreviation NFTs stands for Non-Fungible Tokens a one-to-one digital token that is neither exchangeable nor divisible and defines the usage rights to digital or even physical assets.
Through the use of NFTs, digital assets can be protected from copying or sharing and allow them to be purchased. By purchasing on the nftmarket, the buyer in most cases receives a reference, for example a URL, which leads to the digital content, but does not provide the actual online file.
NFTs are based on a so-called blockchain, which uses the same technology as cryptocurrencies. The mediated reference is stored with a firmly defined verification number within the framework of a blockchain. However, unlike cryptocurrencies, NFTs are unique, non-exchangeable, and one-of-a-kind. Cryptocurrencies, on the other hand, hold options to acquire shares.
What is NFT Minting?
The term "minting" refers to the minting of online artwork. In this process, an originator can turn a digital file into a crypto collectible and thus mine and sell it. Once stored on the blockchain, it is no longer possible to convert or delete the digital object.
Why is the demand for NFTs on the rise?
In addition to the digital scarcity of assets on the web3, individual usage rights and the emotions associated with them also play a primary role in NFTs.
It's about the origin of the digital collectible and the story behind it, which can now also be acquired dematerialized on the Internet thanks to the age of digitization.
Non-fungible tokens can be used wherever individual objects in PC games, art, music and much more are assigned to an asset and made tamper-proof.
In this context, you might get the impression that NFTs are completely new, but blockchain-based technology dates back to 2012.
Not only investors and artists have discovered the Non-Fungible Tokens for themselves, but also more and more companies rely on NFT marketing.
How can NFTs be used in marketing?
- Branding: companies use NFTs around their communication and company branding. In this context, for example, customers, fans and followers of the company can be rewarded with NFTs in online marketing. Create a suitable community in which discounts, shipping or even digital products are linked to a value via Non-Fungible Tokens. Using this approach, you can increase the attention of your target group, retain existing customers in the long term, and thus strengthen your overall branding.
- Target group development: A specific customer group in particular responds to digital collectibles and the associated NFT marketing. In countries like the U.S., about 25% of Generation Y (born in the early 1980s to late 1990s) already invest in non-fungible tokens today.
- Social Media & E-commerce: Instagram's parent company Meta announced in 2022 to embed NFTs on Instagram and provide the Digital Collectibles feature. This will allow creators and artists to use NFTs. Until now, a select group of digital creators have been allowed to mint and sell NFTs directly from the social media Platform to imprint and sell it. In the e-commerce space, the first non-fungible token was introduced by the Händlerbund in Germany back in 2021.
- Metaverse: In the so-called metaverse (digital space with interplay of virtual, extended and physical world), companies can present new products and secure usage rights via non-fungible tokens. Customers can also be offered unique, digital goods via NFTs using avatars.
In our follow-up blog post, you will learn all the important information about NFTs on Facebook and Instagram.