Marketers need to break down the NFT bandwagon

When it comes to NFTs, SKMG co-founder and partner Andrew Knowles suggests there's more at play than overpriced JPEGs.

After two years Cannes Lions is finally making a comeback, in person, in the Riviera, bringing with it the slew of anticipation as to what the world’s greatest advertising minds will have to show off. The irony is that many of the winning ideas in Cannes this year may not have anything to do with a physical presence – yep – this is another metaverse article. Specifically, it’s about NFTs. 

Before you audibly groan, stick with me. The discourse around NFTs and what they mean for the future of our online engagement, at least in the media and marketing space, has been mired by debate over whether exchanges of inordinate sums of money for a jpeg are fad or real option for wealth generation. That, or you’re dismissed at the mere mention of an NFT because it’s, “too confusing”.   

I’m not about to profess to be an expert in this field, honestly I’ve only just started to scratch the surface after a few months of research, but when the likes of the venerable Mark Ritson calls NFTs “idiot magnets” while plating up something as derivative as a series of photos of himself on the toilet – thinking he’s proven some sort of point when they don’t sell – it makes me nervous that even some of our industry’s greatest commentators are sending the wrong message. The intention of this article isn’t to lecture, it’s to pose a question: are we missing an opportunity by not making more of an effort to understand the NFT space?  

At their core, NFTs are simply a token of ownership, one held on the blockchain, that cannot be tampered with, that shows a complete record of all those who owned it before. Whether that token is attached to art, music, a receipt, it doesn’t matter. What that means is while the current trend of collector-style images being flipped in a saturated market may or may not be a bubble, it has nothing to do with whether NFTs themselves are here to stay. The truth is, they are. 

In 2021, Opensea – the main marketplace for trading NFTs – registered over US$14 billion in trading volume, a huge increase on its 2020 number of US$21.7 million. But if we ignore the metric of dollar value for a second, there’s something much bigger at play, something that could offer an enormous opportunity to communicators, marketers and advertisers alike. What is it? Simple. Our market is increasingly looking for a sense of community in brands. The past two years supercharged that mentality, it lead to the rise of the microinfluencer. It’s also what NFTs – even those images traded on Opensea – have been able to create in spades.  

If you’re unfamiliar with Discord, it’s an invite-only online chat platform designed to offer a community space for businesses, schools, gamers, artists, whoever really. More importantly, it’s key to understanding what’s driving the value of images we’re seeing sold for huge prices. If you do happen to be in the market to trade collectible art pieces, a critical indicator of whether the product is someone else’s get rich quick scam or your own genuine investment prospect isn’t necessarily the floor price, rarity or quality of the art; it’s the strength and engagement of the community behind it on Discord.  

Discord itself isn’t perfect – it can be very confusing for a newcomer and is rife for rethinking by some intelligent minds – but what matters is that where one NFT collection may have 10,000 unique pieces to launch, the Discord may have 100,000 members across multiple chat threads. Many of these participants are vying to be admitted to the whitelist (an opportunity to buy the piece direct from the artist before it goes to resale). Largely, those granted whitelist privileges are selected based on community engagement, participation and adhering to the group’s guidelines. Trust me, the response is enormous. 

The famous portrait photographer Platon has tried his hand at NFTs and been very successful – his portrait of Edward Snowden sold for over $1 million – but in conversation on the subject he is the first to pose a similar train of thought: right now the discourse around NFTs is fixated on dollar value, a single metric that obscures their potential. They’re an immutable sign of ownership, a key to a community, an invitation to engage with creative storytelling that demands attention.  

Platon’s own collection, Eye Love You Eye Hate You, is an early indicator of the true storytelling potential of NFTs. Using a drum scanner, he distilled his portraits of the world’s most culturally and politically powerful figures to single beautiful images of their irises dilating. The kicker is that the purchaser doesn’t know who the iris belongs to until after they purchase. That stunning azure ring you just bought could belong to Prince or Vladimir Putin. Platon then engages with his community of owners to facilitate debate around the notions of identity, morality and more. He also promises to bring the owners together in a symphonic conclusion once all pieces are released – TBC what that actually means.  

What matters here is the collection is not a money bid. The pieces are priced affordably and Platon himself is the first to admit that if people actually knew what they were buying beforehand the initial value would skyrocket. That’s not the point. He’s using NFTs and the notion of ownership to create engagement, to tell the story of his own work and land the message that whether it’s Kobe Bryant or Donald Trump, when you’re have a camera in the face of someone so close you can feel their breath, they’re just people.  

Another contributor to the value of an NFT is the product’s roadmap – the outline of what’s in store for those who hold an NFT. It’s important to not just view an NFT as a token of ownership, but a contract, which specifies exactly what the owner is entitled to at the time of buying, as well as the added value they may be entitled to in the future. It may be access to the artist’s studio, it might be exclusive access to a restaurant. The best pitch exclusive parties, networking events, playable game characters and even stakes in Crypto EFTs. Usually these are offered within a private, owners only Discord. When you consider owners of the Bored Ape Yacht Club include Justin Bieber, Jimmy Fallon, Steph Curry, Paris Hilton, Post Malone and more it almost – almost – makes sense as to why a certain type of person might spend millions on a Bored Ape to be part of the club. The Bored Ape Yacht Club NFT project – created only nine months ago – is currently worth around US$5 billion, giving it a higher valuation than Mazda, Wendy’s or Victoria’s Secret.  

Brands have already cottoned on to this. Retail’s gold rush toward NFTs has certainly begun – this month Gucci will launch a product with Superplastic, Adidas has already partnered with Bored Ape, hell, even the Australian Open tried its hand at collectible tennis balls. All of this is perfectly fine, but it obscures the larger point. As American journalist Rob Litterst wrote, much of this is geared toward a bid for self-preservation. Of course, it’s also a bid to cash in on the prospect of significant returns. What’s more, they are largely replicating the collectibles format that has already been trailblazed and become incredibly saturated. Don’t get me wrong, they will all likely generate significant value, but they don’t have their eyes on the future. 

A glimpse of what that future may look like can be found in NFT projects using their smart contracts to generate transparent value for communities. Interested marketers may pull cues from projects like Angel Alliance, which offers owners membership to a decentralised organisation raising funds to enable women-led ventures around the world. The funds are sourced through NFT sales and directed to ventures voted by the community. The purpose of this project is to shift the overall VC investment in women-led initiatives, which according to them, was just 2.3% of the total invested last year. Really makes Ritson’s offer to purchase a photo of himself on the toilet – entitling its owner to, wait for it, own a photo of Mark Ritson on the toilet – look like shit, huh? 

The possibilities for these communities are virtually endless. Another explosion in the application of NFTs has been the play-to-earn gaming sector. The economic rationale is yet to be perfected, but investors and players are able to collaborate by either lending or borrowing NFTs which function as playable characters, allowing participants to play games in which they earn money for playing.  

Just last week I discovered a good friend of mine has leveraged one of these play-to-earn platforms to create a business, or “guild”, named RIZE. RIZE is dedicated to building financial freedom for players in the developing world. I saw a message from one such player in Cabanatuan City in the Philippines, who thanked my friend for opening the doors to a platform that had funded her much-needed eye surgery and allowed her to support her family who had lost income due to the pandemic. The moral here is that NFT-driven communities are able to generate real value for real lives, in ways that are able to rewrite the socio-economic barriers that came before. 

Back to Cannes. What does this actually mean for how the award-winning campaigns might look and feel? I’m no creative, I’m a comms guy, I’m not going to predict what the geniuses will come up with in Cannes, and sure I’ve been thinking about how to leverage this tech for my clients’ comms strategies, but if I had any good ideas I’d hold my cards close. Instead let’s look at a past campaign that made a splash in France and reframe it as though it had used NFT technology.  

Remember Host/Havas’ Palau Pledge, the passport stamp given to tourists which forced them to sign a pledge to conserve the delicate Palau ecosystem? That alone was enough to take three Grand Prix in 2018. Now, imagine if it came with a token allowing tourists exclusive access to a community of travellers quantifying their environmental impact by posting images, participating in chat rooms, contributing travel tips and receiving rewards as they do in the form of vouchers or experiences to support local business. The community could even vote on environmental initiatives to direct tourism revenue toward. Over time that token could be handed down generations. Imagine being able to observe the positive impact your family has had on an ecosystem dating back to your great grandparents?  

The thing is, NFTs are only the tip of the iceberg when it comes to the direction Web3 is heading. This runs far, far deeper and has incredibly wide-reaching consequences not only for business but for human engagement on all levels. Sure, some of the applications of this tech may fall into the fad bucket. Yes, like the dotcom boom the way NFTs are used may and likely will look completely different even a year from now. Absolutely, the vast majority of approaches to integrating NFT technology in campaigns will be more bandwagon than bona fide hit. But if you take one thing from reading this, consider for even a second that this may be more than just another shiny toy for marketers to use. Do some research and don’t rule this out purely because an industry voice boasts to be, “basically an NFT moron” while calling them a “pointless fad” in the same breath – you might be kicking yourself you didn’t when you see the Grand Prix winners in June.  

Andrew Knowles is a co-founder and partner of SKMG.


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