Brand Loyalty 2.0: Why NFTs are the future of digital marketing

The Internet has come a long way since the first mainstream in the 1990s. We’ve moved on from the early days of the World Wide Web (Web 1.0) where users can only access content in today’s more interactive and user-centric Web 2.0. And now, we are on the threshold of a new era of the Internet known as “Web 3” – a decentralized web powered by blockchain technology.

At Web 1, marketing efforts focused on creating awareness and driving traffic to the website. With the advent of Web2 and social media, marketing has become more about engaging and building relationships with customers. Web3 is taking us into a new era of marketing, where honesty, trust, transparency and ownership are paramount.

NFT (Non-Functional Token) is one of the key technologies to strengthen this new decentralized web. NFTs are unique digital assets, meaning they cannot be replicated or replaced for other assets. It makes them perfect for digital art, event tickets, sports collectibles and much more.

Major brands are already experimenting with NFT. Adidas has launched an NFT campaign with Bored Ape Yacht Club, PUNKS Comic, and gmoney. The NBA Top Shot, a platform for buying and selling digital collections of highlighted moments from NBA games, has grown exponentially since its launch in 2020. And the social media platform Twitter is allowing users to use verified NFT as their profile picture.

As Web3 collects steam, it is clear that NFTs will play a major role in the future of digital marketing. Brands at the forefront of this change are exploring how to use the underlying NFT technology to connect with their customers in new and authentic ways. That said, the magic is not in the NFT. How NFT is used makes it special.

Brands that nailed their NFTs 7

2021 was the year of NFTs mainstream. And while there were some high-profile flops, there were also some brands that nailed them with NFT launches.

The most successful NFT has a few things in common. For one, they are on-brand, which means consumers will now see how NFT fits into larger brand ecosystems and stories. They also target the existing community of brands, as they are the ones who are most likely excited and can invest in a brand-related NFT. And finally, these are authentic and rare, two qualities that are essential for any NFT regardless of future resale opportunities.

With these features in mind, let’s take a look at the three brands that NFTs have done right.

The first is Nike, which has partnered with RTFKT Studios on a project called Cryptokicks. The project was about collectible digital sneakers, and it didn’t move away from their established model based on the lack of real-world. What made it different was that NFT owners would share future royalties from secondary sales with Nike and RTFKT. It’s a whole new “fan-owner” model that we couldn’t even imagine five years ago.

Nike fans were clearly excited about the project, as evidenced by the fact that thousands of NFTs sold out quickly.

– and at a rate of up to about half a million dollars. How could they make it happen? The simple project was on-brand and targeted existing fans, so many will hold these limited edition sneakers exactly as they do Nike sneakers in the real world, i.e., as a valuable asset to show off to their friends.

The second brand is Time Magazine, which launched its first NFT project in March with a three-part collection of digitized magazine covers over the past few decades. This is a beautiful on-brand project that has given fans the opportunity to own a unique digital slice Time History NFT holders can unlock free subscriptions Time And other benefits are key to enjoying their product. Time Growing revenue from this NFT drop last year raised more than $ 10 million.

Finally, La Prairie is Switzerland’s Beyond Space and world-renowned digital artist Carla Chan. The project involved sustainable and generative digital art that draws from live demographic and environmental data from 31 of the world’s most populous cities. The project stems from La Prairie’s brand commitment in both industry and the environment.

These three brands have two things in common: they have found a way to use NFT that is true to their brand identity and brings value to existing fans.

Brand NFTs 2.0: It’s about true utility

NFT 1.0 has largely ignored the usefulness of publicity and speculation. NFT 2.0, inspired by the major brands, will go far beyond the expected investment in collectibles, skins and shoes. It will go much further than vouchers or redemption or gated content.

The basic benefits of a discounted subscription are insufficient to drive meaningful acceptance. The same goes for event tickets. The idea that communities of super fans are going through the walls for discount subscriptions or event tickets is fantastic. In order to truly launch an NFT in the future, it must provide practical utility that is worth the investment of time or money.

And when it comes to the top 1% of loyal or super fans of your brand, NFTs that focus only on basic utilities are a completely wrong starting point. NFT 2.0 will carry royalties, rights and returns, such as a percentage of sales. They will encourage users to hold on to NFT in the long run by partnering with the brand. Brand fans are a powerful way to transform brand owners.

And NFT drops will be authentic for your customers’ preferred brands and products They will bring them closer to their brand by enabling unique, rare and valuable connections and interactions. For example, a customer may purchase an NFT that gives them initial access to new products or even a voice in the company’s decision.

The key for companies is to design an NFT 2.0 strategy that focuses on creating shared value and bringing customers closer to the brand, purpose or product they already believe in.

Bring customers closer

As brands have evolved from Web 2.0 to Web3, they need to adopt new technologies to stay competitive. Increasingly, projects have begun to build an open source bridge between Web 2.0 and Web 3 to allow companies to connect to their existing sites, systems and data tokens, smart contracts and other blockchain technologies.

Brands need the ability to recognize and respond to NFTs in their user wallet, from enabling initial product access to revenue sharing, to take advantage of some of the uses mentioned above. By recognizing and responding to any NFT in any user’s wallet, brands can connect with their customers in new and innovative ways.

With the ability to recognize and respond to NFTs in real time through a brand website or loyalty program, brands can leverage NFTs as a new connecting bridge between high-value customers and the brand products and services of their choice.

For example, superfans of a particular sports team may be given exclusive access to merchandise or VIP experience due to the team holding NFT. Similarly, customers of a luxury fashion brand can get initial access to new collections or be invited to special events while holding the brand’s NFT. Going further, customers can be given the opportunity to share the revenue generated by holding the brand’s NFT.

We are extremely excited about NFT’s underlying technology and the possibilities that exist for this next wave of innovation. And when one of our partners or brands asks if they should be excluded – we mean:

It’s not about the drop.

It’s not about utilities.

It’s not about shiny new things.

It’s about deep brand connection.

With your most valuable fans.

About the author: Brent Annals is a serial entrepreneur, technology enthusiast and CMO of Smart Token Labs, which connects brands with the NFT ecosystem. Brent has led partnerships and branding for major technology companies, including Facebook and Uber.

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