By: Will Johnson and Scot Weintraub | Ad Age | Sep 13, 2021
Everyone is trying to figure out what to do about non-fungible tokens (NFTs). These modern tools, born out of the crypto boom, have been viewed as both a passing fad and a future tool for artistic compensation.
Recent research from The Harris Poll and R&CPMK found that about half of consumers familiar with NFTs (47%) are interested in brands offering them as a commercial product, providing new use cases for brand marketers to capitalize on the hyper-relevant digital tokens that occupy so much consumer mindshare. When leveraged correctly, NFTs offer several applications for driving increased revenue and awareness around brand products:
NFTs as an incentive for a larger purchase
Big-ticket items such as festival tickets, cars or trips can make most consumers hit pause and consider purchases. Unlike impulse buys - such as food, beverage or CPG products - these larger ticket items often require repeated exposures to creative campaigns or an extra incentive to push consumers over the line on a purchase.
Our research indicates that NFTs could offer marketers another tool for pushing customers through the funnel, with 30% of Americans stating they would like to receive an NFT as a gift with a purchase.
Indeed, the possibility of attaching an NFT to a purchase teases several value creation possibilities for brand marketers. For live events or travel, an expiring NFT offer could provide a sense of urgency to the purchase as an added incentive to buy now. NFTs could also offer a a seal of authenticity. For example, luxury brands such as Gucci are experimenting with NFTs tied to the purchase of their products. The NFT in this case serves as a luxury indicator, marking the occasion of the purchase and proving the authenticity of the brand to others or third-party buyers.
Whether driving immediacy for an upcoming purchase or as an addendum to prove the authenticity of a luxury item, incentive-based NFTs provide marketers innovative ways to leverage this new technology. By tying a unique token to a physical product or experience, it marks that purchase as special. And the specialized, unique value of NFTs can boost sales, create differentiation and ultimately increase the perceived consumer value of a product.
NFTs as commemorative memorabilia to deepen consumer connections
Much like apparel, figurines or trinkets, an NFT represents a myriad of options for marketers looking to create unique, commemorative items for specific events. Instead of tying an NFT to a purchase, marketers can use NFTs as a subsequent item to deepen consumer connection within a marketable moment in time as a token of appreciation.
In fact, 38% of consumers aware of NFTs in our survey stated that they prefer an NFT over physical memorabilia to commemorate their time at a sports or entertainment event. Memorable entertainment and sports events, which rank especially high on consumer passion indexes, have a unique opportunity to sell or give away NFTs to commemorate the occasion.
Sports leagues, teams and venues could distribute NFTs based on notable moments that took place during a game, such as a home run, game-winning goal or even a championship. Music venues could also craft NFTs representing the location, year and artist performing. Similarly, art festivals or exclusive cultural events could offer NFTs celebrating attendance.
Live Nation CEO Michael Rapino noted that NFTs are a major future-looking strategy for the company’s concerts and events, stating, “We envision Live Nation participating within the [NFT] marketplace by looking at some of our concert moments as magic moments that we could mint and attach to our ongoing ticketed festivals.”
Several sports teams, including Mark Cuban’s Dallas Mavericks, are also experimenting with NFTs to layer onto ticket sales. With so many moments to commemorate during an immersive live fan experience, NFTs present marketers with new ways of deepening consumer relationships by leveraging digital tokens that can capture those same moments and make them endlessly accessible to fans. In a not-too-distant future, fans may hear, “Thank you for coming, here’s an NFT.”
NFTs as additional revenue streams
As opposed to offering an NFT as strictly a purchase incentive or as memorabilia, they are also sellable products themselves—providing brands new ways of generating additional revenue beyond the initial purchase price. The tokens can represent almost anything, allowing brands to apply them liberally across different products.
Of consumers familiar with NFTs, 41% say they are likely to buy one, according to our research. And these potential buyers are most interested in purchasing the following types of NFTs:
34% would consider buying an NFT of a video game asset (e.g., characters, special armor)
33% would consider buying an NFT of artwork
30% would buy an NFT of a social media post
30% would buy an NFT of a video (e.g., event recording, interviews, blooper reels, etc.)
One of the most compelling applications is tying ancillary benefits to the purchase of an NFT. For example, the band Kings of Leon offered fans an NFT in exchange for a digital download and vinyl copy of its newest album, “When You See Yourself.” Taking the practice one step further, a higher value NFT gave the buyer lifetime front-row seats to Kings of Leon shows and special backstage passes. These benefits created new subproducts for the band, independent of album or ticket sales, that generated more than $2 million.
Entertainment, sports, the arts and cultural events are the industry categories where consumers are most likely to buy NFTs. For those consumers considering an NFT purchase, they were most likely to buy from a streaming platform (28%), an artist (27%), a blockchain trading platform (27%), a sports organization (19%) or at an in-person/virtual event (18%). For those innovative brands willing to experiment with ancillary NFT products, digital tokens offer fantastic ways for companies to increase their bottom lines.
As digital representations of the modern world with nearly zero creation costs, non-fungible tokens provide brand marketers limitless upside potential. They provide incentives for larger purchases by creating immediacy, additional value and marks of authenticity. And they can serve as unique memorabilia to deepen consumers’ connection to memorable moments, concerts or sporting events. Lastly, NFTs offer brands innovative ways to package digital products alongside physical ones to drive additional value. The only question that remains is, “What can you digitally dream up next?”
Read the full story at Ad Age.
