Learnings from successful NFT projects
July 24, 2023
We know by now that NFTs offer so much more than profile picture artwork. The possibilities that these digital assets present to businesses in terms of new and innovative marketing activations, community development and even alternative income streams cannot be ignored. We take a look at some of the recent brand use cases for NFTs and the key lessons learnt so that you can take heed for your own business strategy.
It’s no secret that one of the best business use cases for NFTs is to build a loyal and engaged community. If you’re part of an already well-established brand, that job will be a lot easier. Even then, it’s important to note that it’s not simply a case of ‘create an NFT and the people will come.’
Because the tech is still so new to a mass consumer audience, the buy-in is a lot harder and requires a lot more groundwork than you may anticipate. The more effort you put into building up your existing community and earning their trust, the easier it will be to convince them to move across to a virtual asset-based loyalty program.
For mass adoption to truly take hold, the concepts need to be made clear to understand. Why would people invest interest and possibly funds in a branded project without fully understanding the point?
Enter: Dior. The luxury fashion house recently dropped a new line of men’s sneakers designed by menswear artistic director, Kim Jones, that come with accompanying NFTs minted on Ethereum. Sure, fashion NFTs have been done before, but what really made headlines was the marketing behind the collection. The core messaging behind this campaign was the idea of owning a ‘digital twin’ of your sneakers.
The term ‘NFTs’ has been done away with completely, with the official Dior site going further to explain that the “Encrypted key” that comes with each purchase (and connected to an NFC chip embedded in the shoes) gives access to a secure platform where you can find “the shoes’ certificate of authenticity, additional information on the different stages of the manufacturing process, and even announcements for future sneaker launches.”
This move away from blockchain terminology serves as a leading example of successfully circumnavigating the complexities explaining the tech behind a project, focusing instead on the actual consumer benefits – marketing 101, really.
Much of the premise surrounding everyday consumers minting a brand’s NFT is to become part of a VIP group. As such, it makes sense that NFT communities are treated as membership clubs where owners can network, get involved and reap exclusive benefits that come with the utility.
We’ve already seen big-name brands like Starbucks launch Web3 loyalty programs, using gamification to get feedback and then reward members with exclusive deals and experiences beyond a free coffee. Even individual creators are getting in on the action, rallying their communities to be active participants in activations and taking a cut of royalties for their efforts.
Artists Tyler Hobbs and Dandelion Wist collaborated on a generative NFT project late last year, dubbed QQL. Anyone could test the QQL algorithm to generate their own artwork, but only Mint Pass holders could actually add an NFT to the final collection. If their particular NFT is resold, then the minter earns a small share of royalties alongside the artists themselves.
The gamification strategy encouraging participation and creative expression certainly paid off, raising nearly USD $17 during mint.
And speaking of original creators – writers, artists and musicians are successfully using NFTs to build community and enjoy direct royalty earnings from mints and resales of assets that they solely own the rights to. Kings of Leon generated more than USD $2 million in sales of their last album, When You See Yourself, which was launched as an NFT. Different tiered NFTs afforded holders different privileges including bonus material and VIP show tickets to one show a year, for life (thus maintaining value). Grimes also made a cool USD $6 million from her 2021 NFT collection, which comprised images and video set to original songs.
When you consider that 90% of music streams go to the top 1% of artists, and the fact that artists would need 10.4 million streams a year on Spotify to be earning a minimum wage living, you can also see why NFTs are viable income streams, particularly for independent artists with smaller, but still loyal, followings.
If you’re a newer project or one still navigating utility (you aren’t alone) it pays to align with more established brands to benefit from reputation association. In turn, those established brands – essentially Web2 native businesses with decades of brand legacy and customer loyalty behind them, can enter the NFT space with experienced Web3 partners.
A notable example is the Tiffany x CryptoPunks collection, NFTiffs. Releasing 250 NFTs with corresponding CryptoPunks-themed jewellery, Tiffany & Co.’s debut project sold out with a total value of more than $12.5 million collected in just 20 minutes. The CryptoPunks brand benefited from exposure to a more mainstream audience, while the jewellery house made a strong entry into the NFT space with an already iconic project.
When carefully considered for the right purpose and audience, NFTs can be powerful marketing and community building tools. The true test of long-term success comes down to a watertight strategy that promises ongoing value for and involvement from holders, carefully considered collaborations and clear, accessible messaging.
Words: Rebecca Haddad