NFTs & Web3: What does 2023 mean for brand marketers?
As an evangelist for NFTs and a crypto investor, 2022 has been a tough year.
In less than nine months, the market for non-fungible tokens (NFTs) fell by 97%, according to Dune Analytics. Crypto didn’t fare much better. At the beginning of January 2022, Bitcoin appreciated to more than $46,000. The same coin is worth only about $16,800 at the time of writing, which is a 63% decline.
But these numbers don’t tell the whole story, or suggest a much brighter future. Marketers and consumers are educating themselves about the potential of NFTs and Web3, which I predict will lead to a new wave renaissance for brands later in 2023.
Early NFTs
Let’s get some rough numbers out of the way before I start spewing hopeium. NFT collectible creator RTFKT generated $3 million in NFT sales in just 6 minutes at its peak, leading to Nike acquiring it in 2021. The big slide started in May 2022. For example, the Nike x RTFKT Monolith Collection worth $500 million in April (based on buying activity), but was valued at just $10,500 as of November. Even celebrities got caught up in the buzz. Justin Bieber spent $1.3 million on the Bored Ape #3001 collection in January, which is currently valued at $95,000, a 93% drop in value.
The reason for this massive drop, aside from the realization that the market was overhyped, was that the majority of NFTs on the market had virtually no utility. Once the early adopters pulled their investments out of the market and left the rest of us holding the virtual bag, it forced consumers and brands alike to reevaluate the market opportunity.
While everyone is equally tired going forward, I believe that mindset will lead to smarter investments that reignite the consumer imagination and create new value for everyone involved.
NFT 2.0: Content, community and trade
However, there is hope based on new releases of NFTs from forward-thinking brands. AMC and The History Channel has developed new NFT products that go beyond mere content resources to influence and inspiration. By purchasing NFTs from these brands, owners can gain increased status and brand influence.
They are also invited to provide input into future show storylines and gain additional benefits such as access to actors and directors through ownership.
Finally, the NFT owners are able to partner with the brands to create their own assets that also add value to the brands.
An even greater value to NFTs and their associated marketplaces are the communities built and curated by owners and brands. Buying an NFT often includes VIP access to online communities (think Discord or Telegram) and events where owners can communicate with each other and collaborate with other creators, artists and celebrities. This two-way communication allows brands to learn from their biggest fans and help inform future content. Of course, access can include physical and virtual events in the metaverse. Based on engagement, brands can identify and reward influencers with products, access and exposure that further fuel their marketing.
Perhaps one of the most exciting opportunities for NFTs in 2023 and beyond is the potential for real income. Brands can create (if not co-create) merchandise, limited-edition collectibles, fund new projects, and even charitable gifts that are sustained over time, as charitable contributions can be built into NFT sales.
The concept of “twinning” is also gaining momentum and should become a separate vocabulary by the end of 2023, with brands organically creating virtual twins of offline products (such as Puma Fashion Week) or vice versa with McLaren Solus GT (who developed a real hypercar based on a video game version).
Last but not least, NFTs provide a unique opportunity to build momentum for customer participation and engagement in the metaverse. NFTs can act as VIP tickets, providing utility in virtual worlds in the form of skins, weapons, clothing or accessories.
Web3: Don’t forget me!
With crypto and the metaverse stealing headlines, it’s easy to forget that the underlying infrastructure plays a critical role in the development of NFTs and other Web3 technologies. There are three primary areas of opportunity within the Web3 universe: augmented reality, investment, and omnichannel expansion.
The first and most exciting Web3 trend for 2023 and beyond is the concept of brands engaging consumers in phygital number (intersection of physical and digital) world. There are a number of other terms that describe the possibility of mixed real and virtual world experiences, including augmented reality and the simulverse. What matters most is understanding the possibilities of hybrid events, such as Solana Spaces Gallery demonstrated earlier this year.
The other possibility is the tokenization of hybrid collectibles. Luxury fashion brand Gucci launched Super Gucci in early 2022, providing opportunities for fans to purchase hybrid collectibles that live in both the physical and virtual worlds. The virtual version of the products tracks natural provenance and allows for monetization as NFTs.
The third opportunity is in the extension of omnichannel marketing. Web3 offers a variety of channels, assets and communities to marketers, ranging from NFTs and the metaverse to augmented reality and gaming. Each of these channels includes multiple platforms, many of which are linked to other channels such as chat rooms and physical events. The primary hurdle marketers face is targeting and tracking across platforms and channels, which will be a focus for many brands and adtech players in 2023.
Even if you invested in crypto and NFTs at peak prices in the last 9 to 12 months, there are still myriad opportunities to recoup your money by building compelling experiences for customers and influencers in 2023 via NFT- are and Web3-enabling technologies. The only limitations are your imagination, and of course, cash on hand.
Hopefully, you still have the budget to explore your own Web3 marketing strategies in 2023.
Kent Lewis is Head of Marketing for Anvil/Deksia, where he is responsible for the overall strategic direction of marketing, including evolving messaging and integration of our combined entity. Kent’s industry recognition includes Marketer of the Year by the AMA Oregon Chapter and Top 100 Digital Marketing Influencers by BuzzSumo.
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