April 20, 2021

NFTs: What Are They, And How Can the Trend Be Leveraged?

Likeable Team

What do Taco Bell, Shawn Mendes, Bratz dolls, and Elon Musk have in common? We’ll answer for you: All four have recently connected with their audiences by minting and selling non-fungible tokens. In recent months, conversations about NFTs have taken over social media, but many people are still unclear about what they are, why they matter, and how to enter the world of cryptocurrency. Here’s a look into just some of the ways your brand can use NFTs to reach, inspire, and attract new audiences—and here’s why this isn’t just another niche internet trend.

What are NFTs, anyway? And why are they everywhere?

Put simply, NFTs can be… anything. Usually, they’re digital assets—songs, GIFs, images—but when someone purchases an NFT, what they’re really buying is a proof of ownership that exists on a blockchain. Charmin, for example, sold seven virtual toilet paper rolls as NFTs in March. Anyone can access or download these graphics, but only seven people can claim ownership, and that ownership can be verified.

The first NFTs were released in 2017, but the phenomenon really started taking off in 2020. According to a NonFungible report, the total value of NFT sales tripled to over $250 million, and in the first quarter of 2021, that number increased by 2,627%. Artists and influencers like Grimes, Kings of Leon, and Logan Paul helped popularize NFTs, and one $69 million purchase back in March seemed to capture the entire internet’s attention. But ultimately, it’s no surprise that the crypto economy is booming right now: with NFTs come digital scarcity, exclusivity, and the opportunity to invest in something that could become a collectible. And simultaneously, they let artists and brands monetize and share their work in new, exciting ways—many of which are still being explored.

So, why should we care?

Enthusiasts believe that NFTs could be the future, and artists and companies have already started ideating ways to bring their work onto the blockchain. Musician Post Malone, for instance, sold tokens that will allow buyers to play beer pong against him. Some experts say that NFTs could come to represent real estate deeds, and others believe it’s just a matter of time before major fashion brands break into the market. Because anything can be an NFT, the possibilities are endless.

Specifically, however, NFTs are ideal for artists, content creators, and collectors, because they help prevent fraud and ensure work isn’t stolen. When a tweet goes viral, it can easily be replicated; when a painting is sold, there isn’t always a way to prove authenticity. Meanwhile, as NFTs are auctioned and resold, creators can keep track of their owners (and their increasing or decreasing value). Another gamechanger? Every time an NFT is resold, its original creator receives a cut of the proceeds. This is something that could fundamentally change the way artists profit off of their own work.

How can brands take advantage of NFTs?

Brands can profit off of NFTs, too, and not just financially. In March, Taco Bell sold a collection of NFTs for the equivalent of just $1.79, but some of these digital tacos ultimately resold for over $6,000. Taco Bell doesn’t just receive 0.01% of the profits with each resale—the company also receives recognition as its NFTs go on and off the market. There’s also a certain sense of luxury or hype associated with a brand that can sell digital artwork for thousands of dollars.

Convinced? Here are just a few ways to jump into the crypto-world.

  • Collaborate with artists and influencers. Avatar tech company Genies has already partnered with figures like Logan Paul and soccer player Mesut Özil to create digital outfits and accessories that can exist on Instagram and Twitter. With so many creators eager to join the NFT craze, there are sure to be boundless opportunities for partnerships, especially if your brand is selling a product that can be turned into a digital avatar.
  • Mint memes, GIFs, and social media posts as NFTs. When we say anything can be an NFT, we mean anything. Twitter CEO Jack Dorsey sold his first-ever tweet as an NFT for $2.9 million, and companies like Denny’s have also minted and sold tweets. The website Variables makes it easy to buy and sell tweets as NFTs—and investigate which brands, companies, and celebrities are already minting their tweets, and to how much success.
  • Team up with charities and nonprofits. Remember that $6,000 Taco Bell NFT? The fast food giant didn’t actually keep the money: All the proceeds went to the company’s Live Más Scholarship through the Taco Bell Foundation. Similarly, Charmin donated money from its sales to a humanitarian aid nonprofit. NFTs can be a great way to get your brand’s name out there while supporting an important cause.
  • Tie NFTs to unique experiences. Musicians and sports teams, especially, are thinking about minting tokenized tickets. Kings of Leon recently sold 18 “golden tickets,” which include digital art along with real-world VIP perks, like front-row concert seats and unlimited merchandise. According to the company that developed the band’s tokens, this is just one extreme way that NFTs can enable direct relationships with fans.

NFTs are popular for many of the same reasons we love social media: They can be used for self-expression, documentation, and even community. (This spring, the marketplace Nifty actually plans on launching a social media platform centered around NFTs.) As more people start to mint, buy, and sell their own tokens, we’ll surely discover exciting new ways to leverage the phenomenon and reach tech-savvy, trendy audiences. If nothing else, the buzz just proves that the lines between our on and offline lives are becoming thinner and blurrier every day—and that knowledge, in and of itself, could change social strategy forever.

Tags: Best Practices, Big Brands, Instagram, Strategy, Tools, Trends, Twitter

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