How Brands Can Leverage NFTs to Build Brand Love, Marketing & Advertising News, ET BrandEquity

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When a new concept is suddenly ubiquitous and part of the consumer lexicon, it is sure to sooner or later rank high in brand war rooms. The latest buzzword — “NFT” (non-fungible tokens) — is everywhere today: in news articles, in debates, in memes. As brands jump on this bandwagon, it’s time to dig deeper into what the NFT revolution means, in terms of potential opportunities.

Vishakha Singh, Vice President of WazirX NFT Market, believes brands should strike when the NFT iron is hot. “NFTs – a powerful medium on Blockchain – offer brands the opportunity to capitalize on their unique strengths, engage with their fans, and potentially generate revenue,” she says. All of this while staying ahead of the curve and keeping pace with innovations in commerce and technology.

Singh adds that these digital tokens provide consumers with a unique opportunity to pull back the curtain on their favorite brands. Conversely, brands can also demonstrate to consumers that they are listening and that they are ready to adapt to their expectations. However, to fully leverage the potential of NFTs to engage the consumer, brands need to create a far-reaching consumer experience.

To draw a parallel, NFTs will be to brands what Harley Davidson jackets are to motorcycle brands. Although they are not directly part of the basic product, the motorcycle, they enjoy a place of pride among passionate motorcyclists and have become symbols of the brand’s love.

here to stay
Kavita Shenoy, founder and CEO of Voiro, believes that NFTs are no longer just the flavor of the season. “While still a nascent market for most brands, NFTs globally represented a market of over $40 billion in 2021. While largely driven by art, 2021 also saw several brands, including names like Coca-Cola, are getting into the NFT space, she says.

When it comes to popularity, NFTs, much like cryptocurrency, show no signs of slowing down. Shenoy believes brands will be experimenting with NFTs in the near future. In the short term, however, there are ways for brands to attract disproportionate attention.

Do more
Marketers and brand owners believe that before these tokens can be used as tools to increase brand love, they must transcend the vanity proposition.

Anshul Ailawadi, business manager, youth and English cluster at Viacom18 Media, says that for it to be a lasting tool in a brand’s business arsenal, marketers will need to nuance NFT offerings with a proposition of usefulness. “Positioning them as collectibles is just one way to use NFTs as a marketing tool. What will keep consumers engaged is adding some utility to NFT tokens. would bridge the gap between the virtual and the physical and allow brands to offer true phygital engagement to consumers,” he adds.

For example, MTV launched a collection of NFT tokens under the name “Fully Faltoo”. These are digital works of art available to consumers. Over time, the brand can add incentives for owning Fully Faltoo NFTs – behind-the-scenes access to on-court events or exclusive discounts on merchandise, for example.

Shubham Chauhan, founder of Kappa, agrees that brands need to take a long view when it comes to deploying NFTs as marketing tools. “A lot of brands are following the trend without a long-term vision for NFT holders. Today, making an NFT itself is a marketing strategy. They treat NFTs as a marketing campaign, instead of a marketing activity. value creation for NFT holders,” he observes.

His partner and co-founder at Kappa, Prashanto Das, adds that there are pitfalls in embracing a new trend in marketing. And it can hold some marks on the fence, before finally taking the plunge. “There is a generational gap between the current owners of the brand and what the future holds. To bridge this gap, while a small ecosystem of tech companies are building commercial solutions, there is not enough momentum yet. Early adopters work closely with select brands to discover value, while risk-averse brands play the waiting game,” says Das.

Roadblocks
In addition to brand hesitation, marketing via NFTs also faces infrastructural hurdles – legal and technological – and regulatory challenges. For example, the 2022 annual budget recognized the validity of digital assets but also bracketed them under heavy taxation. Additionally, copyright laws applicable to NFTs cannot simply be extrapolated from existing laws.

Vijay Singh, who runs Setvi, a company that specializes in creating monetization and engagement opportunities for brands and celebrities in the metaverse, says the question of who owns an existing piece of content will become important. Over time, contracts will also need to address the intricate details of ownership and licensing, as needed.

This adds to the challenge of creating a sustainable lifecycle to market these tokens. “The challenge for brands will be to continue to use NFTs in marketing as they become mainstream while finding ways to turn that attention into longer-term value that actually benefits them over multiple years,” Shenoy points out.

Look forward
The benefits, however, could also come in the form of revenue generation. The merchandising arms of several companies provide an engaging touchpoint for consumers to show their love for the brand, while also serving as an important source of revenue.

The question then becomes whether NFT marketing can repeat this feat in the age of Web 3.0. Ailawadi believes that if companies are in it for the long haul, they will look to go beyond the optical and vanity aspect of collectibles. This is where NFT pricing strategies will become crucial.

Another important factor will be to preserve the credibility of NFTs as valuable assets, in which positive public perception will play a major role. “With no signs of stopping, recent NFT marketing trends have not only been about money, but also about marketing themselves in the right way, so that their public perception is managed properly,” adds Japneet Singh. , founder of Options Designs.

Nonetheless, businesses continue to cram into the trendy “metaverse,” where digital assets such as virtual land and avatar clothing can be purchased for cryptocurrency as NFTs. JPMorgan and HSBC are among the companies that opened virtual locations in NFT-based worlds this year, while YouTube and Instagram also have NFT projects…

Last week, Tanishq launched her new “Romance of Polki” bridal collection in the metaverse, allowing guests to have a 3D experience of the launch and jewelry as well as try on a highlight piece using QR codes from their mobile. The week before Tanishq, it was M&M that auctioned off four NFTs based on its iconic Thar SUV, which fetched Rs 26 lakh…

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