After an approximately two-year hiatus, blockchain has returned to the advertising world.
Not in its earlier iteration as a back-office play for bringing more transparency to media buying, but as a force for creativity -- specifically in the form of non-fungible-tokens (aka NFTs), which have exploded into mainstream consciousness over the past few months.
Taco Bell and Pizza Hut are among the big names that have already scored with their NFT activations, and many other marketers are doubtless evaluating whether they too should dip their toes in.
Yet, despite the surfeit of explainer articles floating around, there are some basic facts that don’t seem to surface all that often but are useful to know before embarking on any NFT activation.
Like everything with crypto, each of the following points can be further qualified but they should provide the NFT-curious marketer a jumping-off point for further exploration.
If you’re not already in the crypto game, acquiring NFTs is kind of a chore
Acquiring NFTs can be a uniquely awkward experience if you’re not already familiar with the crypto space.
Why? Because unlike shopping on Amazon or eBay or Lululemon, you can’t use your credit card, your debit card or PayPal to complete your purchase. Instead, you have to pay in Ether, the currency of the Ethereum blockchain.
Don’t have any Ether? No problem! You just need to set up an account with a crypto exchange like Coinbase or Kraken, deposit cash and buy some.
But the saga isn’t over yet. Once you’ve bought your Ether, you have to move it off the exchange into a crypto “wallet” like MetaMask that’s capable of interacting with the sites that deal in NFTs like OpenSea and Rarible.
Truthfully, once you’ve done it, it’s not that hard -- but it is something to keep in mind as many consumers simply won’t have the patience or interest to actually acquire your NFTs.
Obviously, this is demographic-dependent with some audiences being more amenable than others. (To note, there are some NFT marketplaces like NBA Top Shot and Nifty Gateway that accept credit cards. However, these aren’t platforms that marketers can simply launch their projects on.
You can give them away … sort of
If you’re thinking about an NFT giveaway as a way around the whole Ether-buying, crypto wallet thing, think again. While the NFT world’s OG project – CryptoPunks – was launched as a giveaway, the term means something slightly different in the crypto space.
The reason has to do with how the Ethereum blockchain works. Every transaction that happens on the blockchain has to be processed by “miners” who are securing the network. And because the blockchain can only process a total of about 15 transactions per second, it’s not particularly efficient. In fact, it’s so inefficient that in order for the miners to pay attention to any particular transaction, you have to pay a “gas” fee. The gas price fluctuates depending on how busy the network is, but paying $50 or more (in Ether) for an NFT transfer would not be outrageous.
Meaning, even if you are trying to give something away, someone has to pay the gas fee. It could be the consumer or it could be the brand distributing its NFTs via an “airdrop.”
In fairness to Ethereum, if you’re transferring an NFT worth millions of dollars, that $50 gas fee -- which doesn’t change based on the dollar value of the NFT -- becomes quite reasonable.
If no one wants your NFTs, everyone will see
Unlike the average activation or stunt that fails to launch, a failed NFT activation is visible to all in real-time and in breathtaking detail.
For instance, let’s say you announce a new collection of NFTs that you’re debuting on OpenSea (the biggest NFT marketplace). And let’s say it’s a day later and none have been sold, or, if you’re giving them away, acquired.
Well, right at the top of your collection, you’ll see how many “owners” there are for your NFTs along with how many transactions have taken place.
In some circumstances, especially if none of the NFTs have been acquired yet, there may be an option for deleting a collection depending on the platform and how you’re minting the NFTs. But there’s definitely an opportunity for awkwardness if the plan doesn’t go to plan.
One way to mitigate this sort of fail is to take a hard look at whether your NFT is compelling enough to stand out in what is now a very glutted market.
Historical artifacts (think Jack Dorsey’s first tweet), top memes (Disaster Girl photo) and interesting firsts (CryptoPunks) tend to play well.
While not every brand has this sort of material at its fingertips, bringing an element of sustainable meaning to the activation can help boost your odds.
The actual NFT is only part of the experience
Part of the fun of acquiring an NFT is having pride of ownership of a unique digital asset. (Though the nature of this ownership and the rights involved have been questioned). But the real experience often comes from the community around the various projects.
Think Telegram channels and Discord servers where fans discuss their favorite NFT projects, trade info on how various NFTs were generated (auto-generated art is big in the NFT space) and ask each other the eternal crypto question – “Wen Lambo?”
In a sense, the community aspect of NFTs may represent the most fertile area for brands, providing a natural channel for engaging audiences in a fun and new-ish way.
While this kind of longer-term community building is more effortful than doing a splashy one-off NFT activation, it’s a great avenue for exploration. Especially at a time when reaching people is harder than ever.