NFTs: How Brands are Engaging Customers with Blockchain’s Latest Innovation
In his groundbreaking 1935 essay “The Work of Art in the Age of Mechanical Reproduction”, critical theorist Walter Benjamin argued that advances in print technology initiated a cultural change in how society perceives and evaluates artwork. More specifically, he argued that the ability to mass reproduce masterworks diminished “the aura” of the original pieces, with aura here meaning the act of being in the temporal presence of work – the brush strokes, the medium used, and the time and place viewed.
Pretty esoteric stuff. But one has to wonder how Benjamin would react to the emergence of non-fungible tokens (NFTs) which also represents a radical change to how society perceivesart – in this case digital art –including how it is valued by the market, and, by extension, how brands, in addition to today’s artists, are using it to capitalize on the increasingly popular concept of digital asset ownership.
The Skinny on NFTs
NFTs are digital “works” – think an original film clip, piece of music, essay, drawing, funny meme, even a tweet – that’s ownership rights can be bartered, bought, or sold in online marketplaces. While the object d’art is freely viewable and even reproducible by most anyone, the actual ownership is embedded, as part of the piece, so everyone clearly knows who the certified owner of record is and why authenticity is never in question.Keep in mind that, unlike with traditional artwork, NFT creators and owners are not always the same entity.
These NFT assets are stored digitally, much like cryptocurrencies, as part of a digital wallet and as unique tokens on the blockchain. They come with embedded rights, the most important of which is ownership, as well as varying distribution and reproducibility rights depending on the creator’s agreement.
Celebrities, diehard fans (of means), speculators, and wealthy collectors have made “owning” these NFT assets a hip part of their portfolios. For instance, actor William Shatner, an early NFT enthusiast, created a unique series of digital “trading cards” each visually depicting memorable moments from his career.
Fans of the original Star Trek series bought ownership rights to individual cards – one of Shatner hugging fellow castmate Leonard Nimoy being an exceptionally prized one. Shatner’s digital card series sold out immediately. Now, on a secondary market, the “owners” are able to sell that ownership – essentially ownership “bragging rights” – to Johnny-come-late lies for a substantial profit.
NFTs and Brand Marketing
Right’s ownership of a popular work of digital art is trending as the method of choice for enhancing one’s status, which is one reason why celebrity digital art creators and collectors grab most of the headlines surrounding NFT transactions. But a growing number of brands have also jumped on the NFT bandwagon – to bolster both awareness and loyalty – ironically by giving these prized assets away.
How does that work?
Partnering with celebrities, influencers, or even just their own creative agencies, brands can create (or co-create) engaging digital art assets and bestow the ownership rights of these collectibles as part of promotional campaigns they market to their customer base. It’s a way of capitalizing on the collectors bug with those diehard fans looking to be even closer to the brand they love, but it can also attract new customers, who might connect with the artwork for any number of other reasons.
Creating a Custom-Branded, Experiential Collectible
In March, Taco Bell introduced NFT Taco Art – both brand iconic and original artwork – at what the fast food franchiser hailed as “the easily digestible price of our menu items” (e.g. $1) on Rarible, a cryptocurrency site where creators can showcase and sell digital NFTs. Taco Bell fans could suddenly own taco art (essentially just some animated gifs) of their favorite spicy dishes – with all which gets 0.01% in each subsequent sale going towards its Live Mas scholarship and Taco Bell Foundation.
Just as happened with the William Shatner NFT card release, 25 pieces of Taco Bell NFT art sold out almost immediately and have commanded hefty resale bids ever since. What’s in it for Taco Bell? In addition to some funds for its non-profits, it generated buzz and brand awareness among the young demographic currently following NFTs. Long term, as we all know, the adoption of NFTs by major brands like Taco Bell (Nike, The NBA, and Marvel are others) means mainstream audiences will be introduced to the concept.
What these means for brand marketers is a truly inexpensive way to leverage the cryptocurrency rage to create unique experiences for its customers. Sure, it will be a niche set of customers to begin with, but as the trend goes mainstream and the thrill of digital art ownership and investment catches on, we will see the development of next level art appreciation.