What NFTs mean for brands
Nico Bryan, 3 March 2022
Since Facebook announced its transition to Meta in October 2021, there has been a tidal surge of brands hoping to traverse the unfamiliar waters of the Metaverse, in the hope of gaining a foothold in this novel frontier. Naturally, this watershed moment has gained great traction: news outlets and brand consultancies alike are all having their say on the myriad opportunities the Metaverse offers brands. Indeed, ‘the smartest business owners,’ writes Gene Marks for the Guardian, ‘are keeping an eye on how to profit’ from the Metaverse.
But as more companies rapidly wade in on the fun of the Sandbox, many brands might feel like hopeless, or even uncool, onlookers. Unable to understand, mint and sell digital assets, or unprepared to pump thousands of dollars into a virtual office in Decentraland, how can brands gets involved with the Metaverse?
“To assume NFTS are purely for retail purposes, however, would further underestimate their potential.”
Well, look no further than the mysterious and humble Non-Fungible Token (NFT). For many of you, the NFT will be etched into your brain – another seemingly inescapable element of the Metaverse ecosystem. For others, you might have only heard about these so-called ‘NFTs’ in passing – often absurd bits of digital art, selling at often ludicrous prices, to often immensely wealthy individuals. You might also wonder why a screenshot doesn’t do the same job.
But, as a result of changing consumer behaviours, the reality is that these virtual assets are very promising for brands.
Let’s start by looking at NBA TopShot, a collection of NFTs of the NBA’s best moments. Simply by converting and commodifying footage, the NBA has made an additional revenue stream, introduced an exciting and engaging customer experience, and built a community around these collectible NFTs. And, finally, should an owner of an NFT choose to sell their video of Lebron James, ‘smart contracts’ ensure that NBA TopShot will receive royalties from the sale. It’s a blockchain certified slam dunk.
“It’s a blockchain certified slam dunk.”
To assume NFTS are purely for retail purposes, however, would further underestimate their potential. NFTs can act as membership cards to metaverses; they can be used as tickets for events; they can be used as gifts to clients; they can help to ignite internal engagement and loyalty among staff.
So where does branding stand in all of this? After all, anyone can mint an NFT. Well, it’s important to recognise that creating a coherent, cohesive, and imagination-capturing collection of NFTs is not purely a technical undertaking. Rather, NFTs are a fertile opportunity to grow distinctive offshoots of brands. To build a blossoming collection of NFTs requires many of the core principles used in conventional branding, namely positioning, naming, ID and TOV.
Take the most lucrative NFT collection, The Bored Ape Yacht Club, for instance. When Gwyneth Paltrow decided to purchase a BAYC token in January, she wasn’t simply investing in a digital picture of an ape. Nor was she merely securing herself as a trailblazer in this virtual world, as a celebrity on the pulse of popular culture. She was also buying into the unique, distinctive, and disruptive BAYC brand: its look, feel, the values it espouses and what it represents. Indeed, it’s partially the BAYC’s branding which has been their bedrock for further IP and licensing agreements. As the BAYC demonstrates, launching a successful collection of NFTs is not merely a mechanical matter, but one of brand growth.
This said, the obvious next concern revolves around how brands can truly ‘own’ and protect their IP in the legal minefield of the Metaverse. Indeed, such has been the meteoric rise of the Metaverse, the law is still playing catch up against opportunistic attempts to bypass IP. In June 2021, Hermes took legal action against Mason Rothschild for his collection of Birkin bag inspired NFTs, which sold for upwards of two thousand dollars. And, importantly, this isn’t happening in isolation: even when looking up brands such as ‘Mr Men’ on OpenSea you will find a web page awash with NFTs of those iconic illustrations (none of which are official). So, though it might be easier for those branding giants to protect their IP in the digital realm, it would be naïve for any company heading into the metaverse to not consider the IP implications. Either way, you shouldn’t let this stop you.
An ambitious brand should be curious about the next opportunity. If the Metaverse is to become the next iteration of human interaction, connection and transaction, it is true that brands do not have the luxury of waiting for this tumultuous turbulence to subside before taking the leap into the Metaverse. But that doesn’t mean brands should instantly start doing VR meetings in a virtual office, either. For many entering the Metaverse, it’s a matter of ‘owning’ your brand and digital IP. For companies looking to dip their toe into this new world, NFTs are a nifty solution.
- https://www.theguardian.com/business/2022/feb/20/metaverse-profit-small-business-big-brands
- https://www.forbes.com/uk/advisor/investing/nft-non-fungible-token/
- https://nbatopshot.com/search?orderBy=PRICE_USD_DESC