One of the hottest topics so far this year has been the rise of NFTs.
NFTs – or non-fungible tokens – can best be described as a digital token that be sold and traded on a blockchain.
Headlines about NFTs usually revolve around digital artworks being sold for a ridiculous sum of money, or sporting highlights being traded among investors.
We’re also now starting to see opportunities for brands to leverage the new technology. Coca-Cola enjoyed some success earlier this year when it shared a range of NFTs.
Another surprise to go with our NFTs. A real-life, retro Coca-Cola fridge! Made in Italy. Custom-made and stocked with ice-cold Coca-Cola to be shared with friends. https://t.co/SIJ0HnNfdu#smegusa #NFTcommunity #OpenSeaNFT pic.twitter.com/onCnYveOJw
— Coca-Cola (@CocaCola) July 30, 2021
According to Labrys CEO Lachlan Feeney, the rise of NFTs is not so much about these digital tokens, rather the technology they are traded on – blockchain.
“NFTs have actually been around for some time now, but have landed in a big way this year with businesses, and marketers in particular, for their ability to create value for digital assets – we call this the monetisation of culture,” Feeney told B&T.
“NFTs are really the tip of the iceberg for blockchain’s potential and are far from a passing craze.”
Blockchain technology has grown in popularity due to its ability to serve as a an incorruptible digital ledger, which can trace and report the entire lifecycle of a digital asset.
Feeney points to this as a reason for the immense success of cryptocurrencies such as Bitcoin.
Visa buys in
Visa attracted plenty of attention in August when it purchased CryptoPunk 7610 (one of the most popular NFTs) for around $US150,000.
For Feeney, Visa’s decision to get involved in the NFT game shows brands are taking the space seriously.
“Visa’s purchase of CryptoPunk 7610 is a huge statement in terms of brand credibility amongst the digital communities that engage with these assets,” he said.
“It’s one of the highest profile examples to date of a brand embedding itself into a digital community in a way that until now has been illusive. Brands have long understood the marketing power that comes from collectables and NFTs are ushering in a new digital era for this marketing strategy.
“The fact that Visa’s investment was reported to be around $US150,000 is a statement in itself as to the cultural influence these assets are going to have in our immediate future, and the opportunities they present for marketers.”
Going deeper
With skyrocketing prices and flashy digital designs, NFTs certainly represent the ‘sexy’ side of blockchain.
And while Visa and Coca-Cola are showing us that brands can get involved here, for most marketers, the true value of blockchain technologies will likely be far less exciting.
“So much of what is driving the rapid adoption of blockchain technology is trust and transparency,” Feeney said.
“That’s both in the data itself in terms of legitimacy and accuracy, but also in the way that it’s collected, stored and used.”
He pointed to the example of the Brave browser (an alternative to Chrome and Firefox) and its use of the ‘Basic Attention Token’, which is designed to pay publishers for their content and users for their attention.
While ads are blocked on Brave, users can choose whether they are visible and can be paid in Basic Attention Tokens (which can then be cashed out) for their engagement.
“The system is very privacy focussed and is a response from the blockchain industry to hand ownership of data back to the user, whereas currently user data has been viewed by the tech providers as a kind of payment for using the service,” said Feeney.
It’s just one example of how blockchain technology can put data ownership back in the hand’s of users.
“The blockchain approach is very much, you own your data, and if you want to submit that record to a public, decentralised blockchain, that sits in the public realm rather than a company server, we’ll pay you to access information that you own,” Feeney said.
“It flips the entrenched paradigm.”
As more brands and organisations start to move towards these sorts of systems, Feeney believes digital advertising’s data-hungry reputation can be reversed.
“These are completely new parameters for the marketing industry to operate in, and go some way towards addressing the reputational impacts that the industry has sometimes suffered from bad personalised marketing efforts,” he said.
