What do NFTs mean for the future of marketing?
If you’re a millennial or human being having lived at any time during the 90s or early 2000s you’ve heard of pogs, you’ve dined on a happy meal, and you are no doubt familiar with the Spice Girls. Perhaps you have even had Spice Girls bubble gum, containing collectible stickers in each packet - if not, you can imagine that such a thing did indeed exist.
Please take a moment to reacquaint yourself with pogs (remember slammers?) and the ever-coveted mcnugget Halloween buddies (or some variation of equally desirable happy meal toy - hello batmobile 👋).
OK now, what does any of this have to do with NFTs? Everything and nothing, it would appear.
Let’s start with the most obvious part of the answer, nothing.
Before I dig into the nothing, it should be noted that I can’t take credit for comparing the boom of NFTs to pogs. I first came across this explanation on the podcast Recode Daily, titled “The Amazon for NFTs.” It did, however, get me thinking about NFTs, their application in marketing today, and the future of marketing.
Let’s get started. If you have heard the term NFT a thousand times recently but aren’t quite clear on what that means, you aren’t alone. Let’s take a moment to get clear(er) on NFTs.
So what is an NFT exactly?
NFT stands for Non-Fungible Token. OK -what does that mean? Thanks to a great article from the Verge, there is a succinct explanation for all of this.
If you prefer an audio description, here’s a great 3-minute explainer from NPR.
Ok, how does all of this work?
According to Jessica Werb and Dr. Wang, in a great article from UBC, NFTs are “a piece of data recorded and traded on a blockchain.” Taking a step back here, blockchain, according to Dr. Wang is a big database, but unlike a traditional database with an administrator, once something is added to the blockchain database, it can’t be erased and altered. I recommend this UBC article from Jessica Werb and Dr. Wang if you are looking for a nice introductory breakdown of NFTs, blockchain and cryptocurrency.
For the sake of this article, I am less concerned with the mechanics of how NFTs work and more interested in the application. A very brief and oversimplified explanation would be that an NFT is similar to a cryptocurrency (but is non-fungible or unique) and traded on a blockchain. For an excellent in-depth beginner’s guide to NFTs, you’ll want to visit this article.
WTF is an NFT from Today, Explained is also a great resource.
Do people collect NFTs like they do other pieces of art?
I think it is safe to say that people are currently doing just that. One of the most popular places to collect NFTs is Open Sea, described as the world’s largest NFT marketplace.
Before I took the time to dig into NFTs I heard a lot about things like the Bored Ape Yacht Club, and like many people didn’t understand how these things were going for thousands of dollars.
However, I’ve also come across work from amazing creatives like Johana Kroft and so many other talented illustrators and artists who are feeling empowered in this space.
With all that said, it is not the “fine art” component I am so intrigued by when it comes to NFTs. After all, art is subjective. Lets’s recall when a piece from popular street artist Banksy sold for 1.4 million dollars and started to shred into pieces. That piece of shredded art has since been resold for 25.4 million dollars.
What I am intrigued by is how NFTs are being used in a way that feels pretty darn similar to the 90’s and early 2000s “collectibles” that showed up everywhere.
Please see spice girl ChupaChups lollipops below. Through my googling, I learned someone is selling a full set of Spice Girls individually wrapped lollipops on eBay for $50,000 cold hard cash (not actual cash - I’m sure visa or PayPal would do).
Recently I came across an article from Andrea Hernandez from Snaxshot, which expertly outlined the evolution of Web3 in the food and beverage space. In the article, Andrea discusses a number of emerging trends and companies. I’ll cover two below, but definitely suggest you read their article - it is fascinating.
One such example was from Leisure Project, a “hydration” product aimed at Gen Z. To me the most interesting part of Leisure Project was not so much the product itself and its claimed benefits (calm, balance and clarity), but the fact that you could mint your own “leisure creature” - an NFT that also appears to be a major part of the Leisure Project brand ethos.
The next example is from Bored Breakfast Club which sells real-life tangible coffee, but also, and more importantly, 5000 NFTs. From what I can gather, there are a limited number of NFTs that come in the form of unique breakfast scenes, and NFTs will give you access to new coffee releases.
On their website, Bored Breakfast Club states they are providing an “exclusive digital experience to members”
I can’t help but see two behavioural economic theories marketers have long known about, applied in a new and novel way.
Loss aversion theory: Loss aversion theory is the theory that losing is more painful than the joy of gaining. “Losses loom larger than gains” (Kahneman & Tversky, 1979). Put in a non scientifically or rigorously studied way, FOMO (Fear of missing out)
Scarcity (heuristic) When we perceive there to be a limited number of something, it becomes more valuable. Marketers are well aware of this. When was the last time you added something to a cart because you were told there were limited items available? I work in marketing and I still fall for this.
Behaviouraleconomics.com outlines a study in which a wristwatch was framed in two ways. In the first, it was described as exclusive with limited stock. The second was described as a new edition with many items in stock. The study asked participants to state how much they would pay for each watch and found participants would pay 50% more for the exclusive or “scarce” item.
To read more about loss aversion and scarcity visit behaviouraleconomics.com
NFTs and 90’s collectibles have everything in common
NFTs are unique and often released in a limited number.
Personally, to me, creatives listing their work on Open Sea is a different way of selling and obtaining art. For some, it will make sense, for others, it won’t.
What I’m referring to, however, is the evolution of the tangible collectable items that gave us a sense of urgency to buy, being updated for an online world. Pairing NFTs with products like Leisure Project or Bored Breakfast club feels a lot like the evolution of a limited edition mug you will get if you drink enough coffee at your local cafe, or a series of happy meal toys that are around for a LIMITED TIME and only while supplies last, or Spice Girls gum with a collectible sticker in each gum packet.
It is not lost on me that Pogs are coming back, now available in a digital game format. It is also not lost on me that pogs were once available in happy meals.
I know I keep bringing this back to pogs, stickers or any other 90’s collectible, but there are examples of this all around us. It isn’t something we necessarily grow out of or become more discerning about as we age. A lot of us buy clothes that are released in a limited edition colour, gravitate towards limited edition jewelry, or sign up for “exclusive” memberships to clubs and the like.
The point of all of this for us millennials, geriatric millennials (yes I had to differentiate) and olds, is that we were once obsessed (and still are) with “collecting”, or swayed by something “limited edition” we just remember a world in which life wasn’t digital.
According to Vogue Business, an NFT from Gucci, called Gucci Grail is releasing later this month. Further, Gucci is launching an experience for Gen Z in the Metaverse. Again, the promise here is “exclusivity.”
This article from Shopify offers a great breakdown of NFTS and eCommerce. It outlines a number of applications for NFTs - one that stood out to me was how NFTs might be used to gain brand loyalty. If you are interested in learning more, it is well worth the read.
In many ways, NFTs can be a number of things. They can be art to some, a collectible to another, a symbol of membership to someone else, and make absolutely no sense to the next person.
To be honest, I’m not excited about the Metaverse and I’d rather we put all of our energy into saving planet earth, rather than buying real estate in whatever the Metaverse is exactly. That said, not all hope is lost. While Creative Boom points out that Gen Z is deeply interested in the Metaverse, they are also yearning for “the analogue, the physical, the real.”
Digital technology is growing at a rapid rate and that will continue to come through in design trends (there is very much an aesthetic associated with Web 3), and influence the way online communities (hello TikTok, goodbye Instagram) are built and the marketing that follows.
I personally don’t own any NFTs and maybe my retirement plan will suffer because of that, but time will tell.
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