Need to Know: Non-Fungible Tokens (NFTs)
Just when your gran finally got the hang of what a job in social is all about, crypto has hit the marketing industry in an increasingly mainstream way with NFTs. These unique digital assets, stored on the blockchain, are catching on in the music industry and being used by brands like Nike and Gucci.
Senior Creative Technologist Sam Cox and Group Head of Strategy Harvey Cossell, discuss what NFTs are all about and whether brands should be paying attention.
WHAT’S IT ALL ABOUT?
“Non-fungible” essentially means unique – like the digital version of an original piece of artwork. You couldn’t trade said art for another painting and own the exact same thing. NFTs can be any type of digital asset, including but not limited to art, videos, music, gifs, games, 3D objects, text and memes. They are stored on the blockchain; as the blockchain is transparent, it’s easy for everyone to see who owns which token. So – bragging rights amongst fellow NFT enthusiasts.
There is a growing marketplace where people can buy and sell NFTs. Selecting the right marketplace for the right items is important. Some are exclusive and need invitations to start selling, while others are receptive to brand collaborations. Some of the most popular include SuperRare, Nifty and OpenSea.
HOW ARE BRANDS GETTING INVOLVED?
Sport: Quick off the mark
Sports brands have been some of the fastest movers in the NFT space. For example, the social savvy NBA sells short video clips of players’ top shots – and collectors have spent $330 million to date. A 1-1-1 Formula 1 car was the most expensive NFT sold in 2019 at $110,000, designed for the officially licensed blockchain game F1 Delta Time. Nike has moved early and reached the passionate sneakerhead community with digital “CryptoKicks”, creating scarcity by tying production to that of real sneakers. However, this is as much about trying to combat counterfeiting as it is about value.
Music & art: Today’s tactic
There’s been a recent rush on NFTs in music and art. Firstly, the digital artist known as Beeple sold an NFT of his work for $69 million at Christie’s (his most spenny effort before was a $100 print). Then Kings of Leon became the first band to release an album as an NFT, with three different tokens ranging from a special album package to live show perks like front-row seats for life. Grimes recently sold $6 million worth of digital artworks – a series of 10 pieces – after putting them up for auction. Expect a lot more in this space.
Fashion & gaming: The future
There is currently less activity in this space than you would perhaps expect. Recent examples include football star Mesut Ozil’s branded digital clothing range for fans to kit out their own avatars, in aid of charity. The gaming and fashion crossover is an obvious sector of opportunity for NFTs; with custom avatars increasingly popular and brands like Nike and even Lidl releasing digital fashion products on gaming platforms, it’s only a matter of time before unique digital fashion becomes as sought after as IRL. Particularly as The University of the Creative Arts has just launched the first MA in Digital Fashion.
NFTs are only gaining in popularity right now. Figuring out the market fit for your brand or product is key. Some brands’ assets naturally lend themselves to this digital space, while others might have to take a more innovative approach to getting involved.
Any approach needs to be thought through in regards to the format of the asset (is it a jpg or a 3D object, for example) and the NFT platform selected to host the drop.
The $69m Beeple drop has set an already hyped area into overdrive, with global news covering the event, driving NFTs straight into the mainstream. This will undoubtedly usher a new generation of platforms to enable NFTs to be viewed (think online NFT exhibition spaces) or worn (on avatar platforms) where people’s purchases can be shown off.
However, a word of warning: NFTs can have a heavy carbon footprint. Brands looking to get involved need to get clued up about how they can do so responsibly. It’s also currently an experimental area where only the most innovative brands are likely to get involved- but it’s one that’s showing some interesting early results.
Ultimately, this technology enables something that has been missing online. A verifiable method of digital ownership.
Want to know more about whether your brand should be considering NFTs? Get in touch: [email protected]