In 2018, the New York Times released an article titled “Who would spend $140,000 on a Crypto Kitty?” which reported on a nascent gaming technology that used Ethereum and allowed users to breed digital pets.
Fast forward to today, brands like Coca-Cola, Gucci, and Nike have made this technology a part of their digital strategy and released digital collectibles and wearables for their users in the Metaverse.
Yes, we’re talking about non-fungible tokens. Some tout NFTs as the biggest technological revolution after cryptocurrencies like Bitcoin while others write them off as another fancy term that web3 proponents use to add credibility to the web3 space.
The reality lies somewhere in between that spectrum — Adidas used NFTs to make $22 million in just one afternoon but Porsche failed phenomenally at their NFT initiative. Why?
Porsche seemingly did not study their audience, understand their needs, or build utility into their NFTs that their audience would care about. They also failed to add any personalized experiences to their NFT that could potentially attract buyers, leading to their NFT’s failure.
This shows that the real value of NFTs for users doesn’t lie only in profitability. It lies in the fact that when used in the right way, NFTs can help brands provide new experiences to their customers and attract new audiences and strengthen relationships with their existing customers.
In other words, like search engine optimization (SEO) and other marketing strategies, NFT marketing is a new, powerful tool in your growth toolbox. However, like any marketing tactic, it can’t be a one-off gimmick. You must invest in it to engage a customer from the moment they purchase your NFT to build a lifelong relationship.
So, in this blog, we’ll explore what NFT marketing is, how it’s helping brands forge better relationships with their customers, and how you can go about crafting an NFT marketing strategy for your brand.
What is an NFT?
NFT stands for non-fungible token. To understand this term better, let’s first look at what fungibility means.
If something you own is fungible, it can easily be replaced by an identical item as they both have the same value. For example, you can replace a $100 bill with another $100 bill and still buy something worth $100.
Non-fungibility means the opposite — you can’t replace one item with another even if they’re identical.
The Adidas sneakers worn by Ronaldo have more value than an identical pair of the same Adidas sneakers. They cannot be replaced and are therefore non-fungible.
There’s only one authentic Mona Lisa. That print you bought online simply can’t replace the real thing. So it too is non-fungible.
And if you were to create a digital representation of the Mona Lisa or Ronaldo’s Adidas sneakers (or the ordinary pair) on the blockchain, you’d have a non-fungible token or NFT.
An NFT contains all the information that makes an asset unique, like the date of creation, ownership details, attributes, etc. and is stored on the blockchain.
It also contains a unique identifier which is used to verify ownership, provenance, and authenticity of an asset. This creates scarcity and allows creators to establish the value of their work based on its limited availability and unique characteristics.
These attributes have contributed to their popularity and driven their adoption in various domains.
What is NFT Marketing?
NFT marketing refers to the strategic use of NFTs in marketing campaigns. It leverages the unique properties of NFTs like scarcity, verifiability, and ownership to drive engagement and foster a deeper connection with customers.
Contrary to popular belief, NFT marketing doesn’t always have to involve a big NFT sale or require customers to spend money. Brands can also give away NFTs as part of their marketing strategy and create a sense of community among their customers.
Here’s why NFT marketing has gained significant popularity in recent times:
Creates a sense of exclusivity
NFTs serve as digital memberships or tickets, granting holders access to exclusive content, events, or experiences. This not only creates a sense of exclusivity but also fosters a stronger connection between the brand and its customers.
For instance, the Kings of Leon band released their latest album as an NFT. Whoever owns the NFT could unlock special perks like front-row seats to their concerts, hangouts with the band, exclusive lounge access, and a concierge to take care of their needs.
Boosts Customer Loyalty
NFTs take the concept of a loyalty program to a whole new level. Instead of earning points, customers can earn unique digital assets in the form of NFTs. These can be collected, traded, or sold and represent anything from exclusive digital art to access to special events or experiences. They can also be tied to specific products or services, giving them a tangible value beyond the digital realm.
For example, Starbucks’ Odyssey program rewards customers with digital stamps for reaching certain milestones. These NFTs can be collected and traded, and they also grant access to exclusive benefits and experiences. This adds a new dimension to the Starbucks loyalty program, turning it into a gamified experience where customers are incentivized to engage regularly.
Amplifies Brand Reach
When people own NFTs from your brand or even hear that you’re conducting a new NFT campaign, they share their experiences on online forums or create content around it. As a result, your brand reach is amplified and your visibility grows.
In March 2021, Taco Bell created and sold digital art NFTs featuring their iconic menu items. The campaign created significant hype and sparked the creation of funny tweets which boosted its brand awareness among consumers.
Engages Users and Builds a Community
The advent of NFTs has opened up new possibilities for event organizers to engage with their attendees. One such innovation is the Proof-of-Attendance-Protocol (POAP), which allows event organizers to issue unique NFTs to attendees as proof of their attendance.
But POAP NFTs are more than just digital souvenirs. They can also unlock benefits or experiences for the holder.
Metamask hosted a party in Decentraland to celebrate reaching 10 million users. They issued POAP NFTs which served as a digital memento of the event, and they also helped foster a sense of community among their users.
Unlocks Unique Experiences
NFTs can be used to create a “Digital Twin” of a physical product or asset. This is a one-to-one digital representation of a real-world item, stored on the blockchain as an NFT. The digital twin can be used to verify authenticity, track ownership, and even unlock additional digital benefits.
When a customer purchases a pair of limited-edition Nike CryptoKicks sneakers, they also receive an NFT that serves as a Digital Twin of the sneakers. This NFT would not only verify the authenticity of the physical sneakers but also represent ownership of a digital version of the sneakers.
The digital version could be used in various online platforms, such as video games, virtual reality environments, or social media platforms with digital avatars.
Best NFT Marketing Strategies From Big Brands
Here are some of the best NFT marketing strategies you can steal from the playbooks of big web2 and web3 brands.
The popular social media platform, Reddit, entered the NFT space in July 2022 with the “Collectible Avatars” NFT collection on the Polygon blockchain. These were initially given out via free airdrops and early sales of digital collectibles priced up to $100 and were later sold for hundreds of dollars on the secondary market.
Reddit did this to acquire more crypto users into their brand ecosystem by incentivizing them with freebies and it worked exceptionally well for them —
The brand added over 3 million users within the first three months of the launch and onboarded more than 9.7 million users in the last 10 months.
Dolce & Gabbana
D&G entered the Metaverse space with their “Collezione Genesi” FW 2021 NFT collection. The brand’s NFT marketing strategy stood out right off the bat for the following reasons:
- Like many other luxury brands, they offer a curated approach to selling NFTs. The bidding for their “Collezione Genesi” is open only to approved bidders in crypto or fiat. This exclusivity creates a sense of scarcity and prestige around their NFT offerings.
- Dolce & Gabbana also used their NFTs as access tokens to what they refer to as the “D&G Family.” Buyers of their NFTs gain access to physical and virtual experiences, including catwalks and front-row seats. This strategy adds value to the NFTs beyond their aesthetic appeal, offering unique and exclusive opportunities to the purchasers.
- D&G allows users to buy a physical version of their digital assets. Since there’s an appeal of physical ownership, more consumers will start purchasing these NFTS.
As Ledger forayed into the NFT marketplace space, it introduced Market Pass — Genesis edition, a collection of 10,000 NFTs that serves multiple purposes:
- Access to limited edition hardware: Upon minting, holders of the Genesis Edition Pass will be able to redeem a limited edition black-on-black Nano X, which is Ledger’s top-of-the-line hardware wallet.
- Exclusive access to NFT art: Holders of the Genesis Edition Pass will have early access to generative digital artwork specifically designed and formatted for Ledger Stax’s screen.
- Privileged access to new Ledger hardware: One of the most exciting benefits for Genesis Edition Pass holders is privileged access to new Ledger hardware. So far, Genesis Pass holders have been given access to a limited edition of black-on-black Nano X devices.
The rationale behind the Ledger Market Pass — Genesis Edition seems to be twofold:
- Incentivizing participation: Ledger offers tangible benefits like access to limited edition hardware and privileged access to new products. This incentivizes users of popular NFT marketplaces like OpenSea and Rarible to check out their NFT marketplace.
- Leveraging Ledger’s reputation: Ledger is well-known for their secure hardware wallets. By tying the Genesis Edition Pass to their hardware products, they’re leveraging their reputation in the crypto space to add credibility and value to their NFT marketplace.
The “Ducks of a Feather” initiative was a unique NFT marketing campaign launched by Nike. When a customer purchased shoes from the Oregon Ducks edition of the Nike Air Max 3 collection they also got a corresponding NFT.
The NFTs attracted both sneaker enthusiasts and NFT proponents. It also capitalized on the collector mentality of Nike’s audience, encouraging them to trade their NFTs, which in turn generated royalties for the company.
Thus, the strategy was not only successful in terms of financial gain but also helped Nike grow their audience in the NFT market.
How to Define Your NFT Marketing Strategy
The interest in NFTs is growing — more than 12,000 NFTs sales occur every day with 6,000 of them being purchases from unique wallets. Plus, buyers spent more than $24 billion on NFT platforms in 2022.
At the same time, consumers are also worried that brands may start overpricing NFTs for profits and not create immersive experiences anymore.
So, you need to strike a balance between creating excitement for your NFTs and creating value for your consumers to make them stick with your brand. Here’s how you can do this:
Get to Know Your Target Audience
The most successful NFT projects are more than just art. They have a unique value proposition, showcase what the brand stands for and create an emotional connection with the audience.
The first step to creating this connection is to understand who you’re selling to and what they desire.
For example, Nike knows that their customers crave exclusivity and uniqueness. So, they came up with skin vial tech as a part of their Crypto Kicks project, which enables users to evolve and upgrade their sneakers.
Nike also created a whole virtual ecosystem and invited users to experience this space while wearing their virtual sneakers. This created exclusivity and excitement.
If you’re a web2 brand, you have a ton of tools at your disposal to study user preferences and behavior and understand what they expect from your brand.
But how do you do the same as a web3 brand when your target audience uses both web2 and web3 platforms?
Raleon’s web3 user analytics helps with this. It combines on-chain and off-chain data to provide unique insights into your target audience.
It also gives you project-specific details and allows you to get granular with user data. You can then build user personas and modify your crypto marketing campaign to appeal to all of them.
Define the Utility of your NFTs
Once you’ve understood who your target audience is and what they want, you need to define the utility of your NFTs. This could be anything from unlocking different experiences for your users to giving them a stake in your project itself.
Here are some of the most common types of NFTs and utilities you can offer:
- Access NFTs: Grant NFT holders exclusive access to experiences or goods. The Stamps that are a part of the Starbucks Odyssey program is a great example of access NFTs as they enable users to unlock different experiences and get access to real-world experiences like special events hosted at Starbucks Reserve Roasteries.
- Engagement NFTs: Lets NFT holders connect with other users in an NFT community. For example, the NBA’s Top Shot project sells interactive collectibles of the most memorable basketball moments and is used to foster an engaged community of collectors who trade and discuss these unique moments.
- Social impact NFTs: If your brand has always led purpose-driven social impact projects, you can set up an NFT launch and donate the proceeds to NGOs or other relevant organizations to highlight your social responsibility. Tweak Labs did just this. It organized a mint and committed 100% of all its proceeds to non-profit organizations that work towards providing mental health resources to anyone who needs them.
- Ownership NFTs: Give users partial ownership of a project, item, or entity with NFTs. The DeGods DAO project on Solana which bought a basketball team by raising funds through its NFT mints is a great example of this type of NFT project.
Develop a Clear Strategy
Now, you’ll need to go to the drawing board to work out the important details of your project, like the timeline and milestones, and create a roadmap with key long-term and short-term goals.
This not only helps your team clearly define the next steps but also conveys how you’re going to provide long-term value.
Next, you need to work out a marketing plan and come up with a strategy. The kind of strategy you’ll employ depends on your project. But a general rule of thumb is to personalize your communication according to your audience persona to create maximum appeal.
Raleon’s in-app messaging feature helps with this. When a user visits your website, it shows a personalized pop-up message to engage them instantly.
For example, you can show different messages to users who come to your website by clicking on a link from a newsletter compared to those who come from one of your blogs. Or use on-chain data to personalize based on the behaviors and assets in that specific user’s wallet.
Design a gamified Experience
Creating gamified experiences with NFTs is a great marketing tactic and is highly beneficial for various reasons.
Firstly, they boost user engagement. By integrating game mechanics, such as rewards, challenges, and levels into the NFT experience, you can incentivize users to engage more with your platform.
This will result in more time spent, higher activity rates, and potentially more NFT sales.
Creating gamified experiences also provide avenues for personalization, competition, collaboration, and shared experiences, which in turn enhance community-building efforts on platforms like Discord and Telegram.
As a result, user retention rates improve, and in the long term, this leads to the creation of a more dedicated and passionate user base.
Raleon’s Embedded Quests help with creating a gamified experience. They enable you to create personalized journeys and rewards for each user and incentivize them to come back for more on the platform.
Analyze your Campaign
So far, you’ve set up a campaign and built a community around your NFT project. Now, you need to analyze it to understand whether or not you’re meeting your marketing goals and where you can improve.
This is where Raleon comes in. It helps with web3 analytics and attribution and helps you understand everything from where your audience came from to how your campaign performed by integrating on-chain and off-chain data.
Race to Relevance with NFT Marketing
Given their ability to create exclusivity and unlock new experiences, it’s easy to see that NFTs are here to stay. And many web2 and web3 brands are already leveraging them to acquire new users and retain their older ones.
So, to stay ahead of the curve and build a solid user base, you need to leverage NFTs and make them a part of your digital marketing strategy.
Raleon enables you to do this easily. It helps you find who your target audience is, build user personas, create personalized experiences, and understand what you can do to reach your content marketing goals better.
If you want to learn how Raleon can help your NFT marketing agency or in-house marketing team, click here to try it free.