What is a NFT: Breaking Down The Hot New Trend
You’ve probably heard the term NFT thrown around by a friend or online, but do you know what it really means? This new fad is a little complex, starting with what NFT stands for, but it could grow into an entirely new digital landscape that brands and digital marketers should be familiar with. So, let’s get into it.
What is a NFT? Here's The Lowdown on Digital's Hottest New Trend
NFT=non-fungible token...super helpful, we know
If you’re anything like us, the term non-fungible token probably didn’t make this new trend crystal clear. Essentially, non-fungible refers to something that is original or cannot be replaced. Similar to a piece of artwork, there is only one original, although copies or reproductions may exist. An example of something that is fungible would be money - you can exchange one dollar for another, and they hold the same value and act as the same.
Where do these little NFT’s come from? Great question. They are created using blockchain technology, which you may be familiar with in terms of bitcoin or dogecoin. However, while bitcoin is fungible and interchangeable, NFTs are not able to be traded equally as currency (hence our new favorite term non-fungible.)
NFTs come in many digital forms
What are they, you ask? They can take many forms including music, drawings, gifs, and much more. While these types of things already exist and have existed on the internet for years, NFTs designate the original. Currently, a lot of the hype on NFTs has been around obtaining and collecting digital “art” in its various forms.
NFTs of drawings, images, videos, and music have been sold for hundreds of thousands of dollars already. The founder of Twitter, Jack Dorsey, recently sold his first tweet for $2.9 million. And if you are wondering, yes, most internet users can save or copy these items fairly easily, but again, this is about getting your hands on the original. NFTs also open the door to allow a revenue stream for creators, many of whom have put their artwork out in the world and have received nothing back. Take a while to look through Pinterest, Soundcloud, and many other platforms, and you’ll see the wealth of creations that are out there for free. NFTs allow an artist to sell their original and bring in revenue.
What does this have to do with my brand or digital marketing efforts?
While the intersection of NFTs, brands, and digital marketing is still a bit foggy, consumers have shown that they are interested and willing to spend on them. Broadly, valuing digital creation can increase a brand’s ability to tell its story and provide an entirely new way to connect with and engage audiences.
A recent study showed that 83% of millennials choose to do business with brands that align with their values, up over 10% from earlier in 2020. This puts more responsibility on the shoulder of brands, and therefore digital marketers, to tell the story of their brand and draw the consumer in through more than selling a product. NFTs can open the door to showing the consumer who a brand is and what they stand for. This could look like engaging an artist to create NFT artwork for a brand, running contests with NFTs as the prize, or even buying and reselling NFTs for a brand-aligned charity. The options are endless, but what is certain is that brands out there will start exploring and getting creative with their use of NFTs.
Who’s already gotten into the NFT game?
Thus far, some major brands and celebrities are already exploring how to use NFTs for business, including Taco Bell, Kings of Leon, and Tom Brady. Taco Bell created and sold gifs as NFTs for a new product launch, the Kings of Leon released their album “When You See Yourself” in NFT format (along with on typical streaming platforms) and only created a finite number of NFTs that consumers could buy. Tom Brady recently announced he would be starting an NFT company around professional autographs.
Putting a pin on the NFT craze
While NFTs may sound like exactly that, don’t overlook the interest and engagement that they have brought to the digital landscape thus far. While you may not have a practical use for an NFT within your business or digital marketing efforts, we recommend continuing to keep up with them and start to think about how you can incorporate them into your long-term planning.