Should my brand make NFTs?

Posted on by Perfectporridge in Social Signals: Weekly Newsletter

The amount of disruption happening right now in social media and the overall trend of technology innovation feels so good – Clubhouse, Fireside, Dispo, Bars, Spaces, and too many others to name. I’m on more beta lists and random group texts about cool new social tech than in all recent years combined. It’s reminiscent of the energy we had at Meerkat’s launch, the introduction of Snapchat Spectacles, and the stupidity of the Yo ( the app that only sent the word “Yo” to your friends). You can feel opportunity and vision and potential for creativity expanding exponentially by the day. And I’m here for it.

So we’re a month out since I flagged that NFTs were poised to blow up, and in the last two weeks NFT buzz has been exploding. It’s time to get smart on them. Here’s a primer.

What are NFTs?

Non-fungible tokens are NFTs, which can be pronounced as “nifty” or “enn-eff-tee” (this is the new cultural clash of GIF pronounced as “gu-iff” or “jiff”). NFTs are digital assets that may represent any kind of unique a wide range of unique tangible and intangible items, from collectible sports cards to virtual real estate and even digital sneakers. These files are associated with an Ethereum token, kind of like a serial number, to prove ownership of the file. And lots of people have spent millions of dollars on them so far in 2021. CoinDesk reported people have spent $174 million on NFTs since 2017.

The trend may seem overly geeky and tied to that strange blockchain thing you’ve tried to ignore, but NFTs are entering the mainstream in an accelerated way. A GIF of a LeBron James dunk sold for $208,000. A Nyan Cat GIF sold for $600,000. Twitter co-founder and CEO Jack Dorsey’s first-ever tweet is sitting on a high bid of $2.5 million. Kings of Leon released their latest album via NFT. Taco Bell sold $1 NFTs. And Christie’s auction house sold its first purely digital artwork this week for a record $69 million, the highest price paid for an NFT. Just search Google News for NFT to see how this is exploding. 

Why are NFTs Big Right Now?

Here’s my POV: Apps like Robinhood, online communities like r/wallstreetbets, and the media news cycle that led to the “Meme Stocks” craze of Q1 combined to sharpen our awareness and acuity of how to participate in digital-first trends that were once labeled as too geeky or were too difficult to get into before. Many folks have been “living” in the digital world for 12 months, and thus a collection of digital objects makes sense. And many have disposable income for “playing” in these trends.

NBA Top Shot popularized and created accessibility for NFTs tied to collectibles we’re all familiar with – sports trading cards. The notion that some cards are worth more than others and that there’s a resale market is a layup of a metaphor. And the NBA’s name on the marketplace adds legitimacy and credibility to a crypto world that sometimes seems opaque.

For others, NFTs are another stick-it-to-the-man opportunity born out of cryptocurrency. It’s an opportunity to invest and make money outside of traditional ways. Many spent their last stimulus checks on Bitcoin, and for this next round, we should look for people to put their $1400 into NFTs.

And these huge auction headlines paired with sports and celeb and consumer brands all playing in the NFT space means this trend will continue to grow and snowball in the coming weeks and months.

Should my brand make NFTs?

Because anyone can now mint an NFT and make it available online for a few hundred dollars or less, we’re going to see a lot of experimentation, failures, and massive successes.

Not unlike any new and emerging technology trend, you need to start asking some foundational questions for your brand: Do we understand the trend well enough to engage? Why would our brand participate? Does this fit our brand voice? Could a competitor do a similar idea? Are we adding value to this community? Have we considered the environmental and long-term implications of what we’re proposing? Where is the $$ for the initial sale and resales going? What’s the PR story? What’s the PR risk?

NFT marketplaces are not necessarily brand safe. However, as mentioned above, NBA Top Shot is a fantastic reference, and the Rob Gronkowski’s is another. If professional sports can play in this space, and your brand is open to experimenting in an unproven space while taking cues from other big brands (and their legal departments), then it’s worth moving forward.

There are environmental implications to NFTs that also should be noted. The major marketplaces for NFT art, which include MakersPlace, Nifty Gateway, and SuperRare, conduct their sales through Ethereum, which maintains a secure record of cryptocurrency and NFT transactions through a process called mining. Mining requires a lot of computers running nonstop, and as an example, the carbon footprint of mining Bitcoin is around 37 million tons of CO₂ every year. There’s a plan to shift to a less carbon-intensive form of security, called proof-of-stake, via a blueprint called Ethereum 2.0.

If you ask a crypto fan, they will crypt-splain to you that credit card transactions require a lot of energy we never talk about. And the computing power running YouTube costs a lot of power nobody considers when they upload or watch videos. So they would argue that since NFTs and cryptocurrencies are intangible things, many people can’t comprehend their value and seem to assign a stricter lens on the energy consumption aspect. As a marketer, consider if your brand has a sustainability platform and if it can withstand scrutiny in this area.

One of the reasons we’re hearing so much about NFTs is the massive auction prices for what are essentially GIFs. So brands need to prepare for the best-case scenario and ask, “If our NFT sells for six figures, where does that money go?” And don’t forget if an NFT is purchased, the owner has the fights to resell, distribute or license the asset. But the NFT creator also can stipulate they receive royalties off of future transactions. So being planful about the $$$ is important. This isn’t a one-and-done idea space.

More than GIFs

Beyond a NFT you can admire in your digital wallet or perhaps on a display in your home, many artists offer a tangible piece of art with the NFT piece of art. Kings of Leon offered digital artwork and “golden ticket” experiences along with their album. Taco Bell included free food for a year. Because you can prove ownership of NFTs, you can use them to unlock bespoke experiences tied to a verifiable code only the owner holds. So think beyond just posting a piece of art. This is where the real innovation and creativity going to happen in the coming weeks and months. We have a number of categories for engaging we’re sharing with clients right now. If you want to chat formally on this, hit me up!

Teething Problems

Your legal team who doesn’t understand blockchain will not understand NFTs. Your clients (or boss) who don’t understand cryptocurrency or meme stocks will not understand NFTs. The general public doesn’t really understand them, either.

Of course, that one person in your group of friends who is super into Elon Musk and Dogecoin will understand it, but they may not be your audience. In fact, Kings of Leon fans who were complete newcomers to cryptocurrency and NFTs voiced their confusion and disapproval in social and forced the band to reconsider their strategy.

So like any new technology and trend, there are going to be teething problems as the trend grows. Take a beat to educate yourself before you need to educate others. Read all the things. Get involved yourself with hands-on experience. Buy some Ether. Buy a NFT. Create one. Sell one.

Is this a fad or will it be a long-term trend to contend with? If you know me at all, you know that’s not a question I worry about. NFTs are the hottest thing of March 2021, so dismissing them offhand as a fad just seems short-sighted and boring. Instead, a modern marketer will see it as an opportunity to learn something new. Get smart. Experiment. And see if you can help NFTs find a place in the culture that’s worthwhile. Now that’s something I think about all the time.

Here’s what else I’m tracking this week…

https://www.youtube-nocookie.com/embed/Mh4f9AYRCZY?rel=0&autoplay=0&showinfo=0

Happy Anniversary, BBC Dad: Back before we all knew what it was like to be working from home and have our kids interrupt an important on-camera meeting, Professor Robert Kelly was explaining South Korean politics live on the BBC when his kids barged into the room and became a viral sensation. That was FOUR YEARS AGO this week.

Bardcore is the Latest Pandemic-Inspired Musical Trend: Move over sea shanties, the next viral musical trend is “Bardcore” – modern-day music re-written to sound like it came from the Middle Ages and paired with illustrations inspired by the Bayeux Tapestry. Watch: Foster the People’s “Pumped Up Kicks” and Lady Gaga’s “Bad Romance.”

What are Shower Onions? Your feeds may be full of shower onions this week thanks to a video where a woman showcases her new boyfriend’s extremely clean and organized bathroom, including a bowl of “shower onions” on the toilet tank. Of course the Food Network is weighing in as if the trend is serious: “Onions act as a natural deodorizer, meaning they can basically absorb smells, unpleasant and otherwise. This can be especially useful if you’ve got a bathroom without a window or air vent.” Gross.

How the mRNA Vaccine 💉 Works: Creator @hotvickkrishna created a must-watch TikTok that accurately describes how the COVID-19 vaccine works in a highly entertaining format.

Inside 5-Minute Crafts: Marker has an in-depth background on the 5-Minute Crafts phenomenon on YouTube, which is now at 71.5M subscribers and features videos with titles like 30 COOL HACKS AND CRAFTS To Make Your Life Easier, 15 TOY HACKS YOU’D WISH YOU’D KNOWN SOONER, and 42 HOLY GRAIL HACKS THAT WILL SAVE YOU A FORTUNE. Key quote: “Teaching you how to do these crafts doesn’t seem to be the point — the videos exist purely to make sure you can’t look away.”

Instavangelists: The whole economy of Instagram is based on our thinking about our selves, posting about our selves, working on our selves. And as many folks have left traditional religions, there’s a rise of so-called Instavangelists offering religion-free self-help, guidance, horoscopes and support through social media. Of course, not everyone is psyched about this change, but that’s the internet for you. Key quote: “Our screens may have shrunk, but we’re still drawn to spiritual counsel, especially when it doubles as entertainment.”

Patents of the Week: Although patent filings aren’t a guarantee that new technology will come to fruition, they give us a hint of where we may be headed next. This week: Google is helping you with those double-chin selfie videos and finding things for you as you sit bored at home; Apple wants to bring translucent displays to car windows; and Microsoft is exploring how much you can stress out a virtual assistant and is exploring presentation software that would be able to listen for cues in your speech to detect that you’ve gotten to the end of one slide, and move you automatically on to the next. Read more here.

Business Reads of the Week:How Harper’s Bazaar follows digital trends to retain its authority in fashion; This avocado armchair could be the future of AI; The Era of Audio Creators Has Arrived; The internet doesn’t have to be awful

Quick Hits:

See you on the internet!
Greg

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Published by Perfectporridge

Greg crafts creative strategies for brands rooted in consumer insights, creative technology, PR, social platforms, content strategy, and the cultures that knit them together.