NFTs in Advertising — Temporary Fad or Here to Stay?

If you’ve spent any amount of time on the internet recently, chances are you’ve come across crypto, NFTs, and other blockchain applications — even if you still don’t quite understand them.

Without going too deep into the details, an NFT (short for non-fungible token) is a unique, irreplaceable digital asset that can take the form of images, videos, drawings, music, paintings, or technically anything digital, and lets you claim sole ownership of it on the blockchain. 

Most of the buzz around NFTs involves people making big money out of selling their digital-art-turned-NFTs. But it’s also transformed the landscape of business  — including how companies do advertising.

From Coachella passes to the producers of the iconic Barbie dolls, it seems like a barrage of companies have found their own use-cases for NFTs. What’s remarkable, though, is that this wave has been taking over all kinds of companies, from the long-time corporations such as Budweiser to luxury fashion brands such as Louis Vuitton. 

But crypto seems like a far cry from the world of advertising. So why would companies dabble in such technology?

1. Brand building

The multifaceted nature of NFTs gives brands the creative freedom to express themselves through the art form they choose. They could sell an art piece, a video game or an experience. It also helps that NFTs usually gain a lot of traction which helps companies build brand awareness as well. Not only does coming out with their own NFTs make companies appear “innovative” or “trendy”, but it also emphasizes the persona they are trying to build. 

If platforms like Twitter or Tiktok have given brands a voice or personality, NFTs give them the chance to be a part of creating their users’ digital experiences. Whether it’s an NFT of an Adidas hoodie or an exclusive song from your favorite artist, it has introduced a radical way of engaging with your audience. 

2. Profitability

A cool thing about NFTs is that you can enable a feature that lets you take a percentage of the sale every time your NFT is sold to someone else. The potential for profitability is undoubtedly enticing for companies to take a shot at the NFT space. Budweiser came out with an NFT collection that sold out in minutes. Dolce & Gabbana brought in more than $6 million in a hybrid physical/NFT sale of their exquisite, one-of-a-kind Collezione Genesi. 

Furthermore, with more and more brands starting to sign deals to operate within the metaverse, this could potentially be signaling that NFTs are indeed where the money’s at. 

3. Relevancy

Think in terms of the technology adoption lifecycle: as the first few companies — the early adopters — made the first move to leverage NFTs in their marketing, it’s only inevitable that more and more companies would soon follow. Given how much traction anything NFT or crypto-related tends to get online, it gives brands some relevance and the people bullish on crypto will be more likely to engage with them. In the attention economy, that small bit of relevancy is already valuable on its own even if the NFT flops. 

4. Experimentation

As we all know, reward doesn’t come easy without a little risk. 

It’s possible that most of the brands coming out with their own NFTs are simply bandwagoning on the wave, expecting large returns for simply being a player in the space. But not all companies that have come out with NFTs have been able to rack in millions, like others have. 

However, a business needs to innovate to stay alive. Disruptions like the current boom in NFTs are wildly unpredictable and only occur once in a while, so it’s only natural for companies to want to get in on this window of opportunity. It’s also given them a chance to step out of the box and try out new things. In return, they can understand what works with their customers and what doesn’t. Thus, for the sake of experimentation, companies would want to try to make the most out of this opportunity.

So… are NFTs here to stay?

While it’s hard to provide a definitive answer for this, we would place our bets that NFTs are here to stay — at least until the next big thing comes along.

Creating NFTs is definitely a step up from the usual video and print ads we all are familiar with, especially if brands continue to receive hype and positive response from the public. On the other hand, you could speculate that the NFT craze is just a bubble and once the market becomes oversaturated, people will simply forget about them in a fleeting 5 to 10 years. However, as the tech world increasingly moves into decentralization, Web3, the metaverse, and all that jazz, it’s very likely that we are in the midst of a massively transformative paradigm shift and NFTs could play an increasingly large role in that.