In recent years, blockchain technology has taken the business world by storm. From cryptocurrencies to smart contracts, businesses of all sizes are constantly finding new and innovative ways to use this exciting technology. One application of blockchain that is particularly well-suited for businesses of any size, including small and medium-sized businesses (SMBs), is non-fungible tokens or NFTs.
For the past couple of years, brands have been using NFTs in different ways as a new marketing tool and as revenue-generating assets. This post covers five ways SMBs can use NFTs to help them build brand awareness.
What are NFTs and how do they work?
A Non-fungible token, or NFT, is a type of crypto asset that is unique and cannot be replaced by another token of the same type. NFTs are minted or created through smart contracts recorded on an Ethereum blockchain. The unique features of an NFT make this type of asset perfect to represent ownership of any item or asset, be it a physical item or a virtual one.
Each NFT is associated with a unique identifier called uniqueID and different types of metadata that assign and manage ownership and transferability, among other things. Like all crypto assets, including cryptocurrencies, these tokens can be bought and sold in major crypto exchanges like the ones found here, and in specialized NFT marketplaces such as OpenSea.
NFTs work similarly to cryptocurrencies in the sense that ownership and transactions of NFTs are recorded and verified on a decentralized digital ledger thanks to blockchain technology. However, there are two key differences between NFTs and crypto:
- First, whereas you can trade and exchange fractions of cryptos (you could buy 0.0001 bitcoin, for example), NFTs are indivisible, so you can only buy or trade a whole NFT in each transaction. This also implies that an NFT can only have a single owner at a time.
- Second, no two NFTs are the same, whereas one crypto unit is as good as the next. This is precisely what it means to be non-fungible: you cannot replace one NFT with another, even if they both have similar values.
These two differences make each NFTs both unique and collectible. Additionally, NFTs are built upon smart contracts, which are sets of rules written in code that govern the transfer and ownership of tokens and can also be used to give NFTs unique attributes that make them useful outside the virtual world. These contracts are stored on the blockchain, making them immutable and irreversible.
What makes NFTs special?
NFTs are special because of the unique characteristics that make them perfect for representing assets of any type. These tokens are secure, transparent, and easy to use, making them ideal for applications in nearly any field. Additionally, NFTs can be used to create unique digital assets that can be used in marketing campaigns and as a source of revenue.
People are going wild about NFTs. Last year alone saw a 10x increase in NFT sales in the third quarter and another increase, albeit much smaller, in the fourth quarter, bringing NFT sales to a total of $25 billion worldwide, according to Reuters.
Besides the fact that some NFT artists and influencers have profited immensely from their tokens, NFTs are so hot right now because they are transforming the internet. A new paradigm is taking shape in which everyday internet users like you and I can now own a part of the internet the same way you own a pair of sneakers or your house.
NFTs are also transforming business models left and right, and brands and marketers are taking notice, as you'll see in the next section.
How brands are using NFTs for marketing
Like smart contracts, NFTs have seemingly endless applications, but their different uses in marketing are top on our list. Some of the most interesting ways brands are using NFTs in their marketing efforts include:
- Expanding the brand's reach by diving into different markets like the different metaverses.
- Driving and managing pre-orders by offering virtual tokenized versions of real upcoming products that still haven't launched.
- Protecting brand image by tracking and managing product authenticity and helping customers easily tell originals from cheap ripoffs.
- Promoting events, both in-person and online.
- Building brand awareness through different means like the ones I'll talk about below.
While these are some of the more prominent use cases for NFTs in marketing, brands are constantly coming up with new ways to exploit these assets' power and ride the NFT wave to wherever it may take them.
Five ways to use NFTs to boost brand awareness
As I mentioned above, one of the key ways brands use NFTs today is to increase awareness. This is particularly important to small businesses and startups that lack the resources and reach of larger corporations. So, without further ado, here are five ways to boost awareness through NFTs.
1. NFT referral programs
Referral programs are a tried and true way to get your brand in front of a wider audience and to multiply the audience you already have. It's a way to encourage your current clients to spread the word and become ambassadors for your brand in exchange for some form of compensation.
Using tokens as incentives can improve the efficacy of your referral program. Unlike cash bonuses, You can make token rewards as flexible as you want them to be and may use them to grant your customers access to unique perks or discounts or to enter raffles and contests.
Besides being a new and exciting way to give back to your customers, owning branded NFTs creates a sense of community that you won't get by giving out cash prizes. This has the added benefit of promoting loyalty to your brand.
2. Use NFTs as access or admission tokens for your brand's events.
Tokenizing events is a good way to make use of NFTs in marketing while at the same time potentially providing a secondary source of revenue. To explain how this works, let's look at a real use case.
A Belarusian-American entrepreneur and influencer named Gary Vee uses NFTs to promote his personal brand by selling a collection of NFTs that double as access tokens and admission tokens. The access tokens promise the owner different levels of interaction with Vee himself, while the admission tokens allow the owner to attend a series of events and workshops Vee organizes.
Besides generating a lot of attention for the sole fact of distributing admission tokens in the form of minted digital images, the fact that these images are part of a collectible series makes them highly desirable, so those who initially bought them can then sell them for a profit.
3. Partner with NFT artists to create branded digital collections.
Businesses are increasingly turning to this method, which is comparable to traditional influencer marketing in many ways. You may get a lot of exposure for your brand by working with well-known NFT creators to produce a set of branded limited edition NFTs. Some NFT artists are so well-known that their work goes viral on its own.
One famous example is RTFKT's partnership with NFT artist FEWOCiOUS to create a virtual branded sneaker as an NFT that sold for $3 million. This put the spotlight on the RTFKT® brand, coming into millions of people's radars.
4. Run NFT contests and giveaways.
Everyone loves free stuff, even more so if that stuff can end up being worth several million dollars. This is why giveaways and contests always attract a crowd, making them excellent vehicles for building brand awareness. But if you want to generate even more buzz than with a normal contest or giveaway, give out special NFTs as the prize.
If you think this is strange, consider that major international brands are already doing it. For example, Marriott Bonvoy® minted three travel-related NFTs and set up a raffle to give them away during the Art Basel modern art show.
Besides the NFT, the prize also included a large number of points in the Marriott Bonvoy loyalty program that are redeemable for hotel stays, travel experiences, merchandise, and more. This highlights that you can combine your normal contest or giveaway prizes with NFTs to make it more effective for brand awareness.
5. Use NFTs as souvenirs or merchandise at events.
Instead of holding an event solely to give away NFTs, you can also use NFTs as a way to associate your brand with an important event that drives a large crowd. Considering that an NFT can represent ownership of any type of asset, you can create any kind of souvenirs for an event and mint them as NFTs that attendees can purchase or acquire in some other way.
The best part is that this isn't limited to in-person events but can be used for online events such as Webinars, online workshops, etc., and you could give the NFTs as a souvenir to attendees that stay until the end.
Conclusion
Non-fungible tokens (NFTs) are a new form of digital asset that brands can use to increase awareness. NFTs have many different uses, from rewards for your referral program to giving them out at events and contests so people will collect them. You could also partner with an artist or company that specializes in creating branded collections, or you could create your own non-fungible token in different ways and to different ends. If you haven't done so already, the time is already overdue, so start minting now and get your brand in everyone’s mind.
About the Author
Jordan Bishop is the founder of Yore Oyster and How I Travel, two sites to help you optimize your finances while living an international life. He recently published his first book, Unperfect, an exploration of problem solving.
