By Christos Makridis
Now public companies are using NFTs to deepen their relationships with their most intense customers—a real-world use case that may surprise critics and delight executives.
While the sale of non-fungible tokens (NFTs) ebbed and flowed, surging in 2021 and stabilizing in 2022 and then falling in the past month, many companies value them not as investments but as marketing tools.
Take Gary Vaynerchuk, who used the tokens as both entry tickets and a stream of benefits to attendees of his VeeCon 2022 in Minneapolis. Holders of a VeeFriends series 1 NFT not only used it to get in the front door but were also awarded original artwork, access to Gary Vaynerchuk, and surprise gifts. This also provided data to Vaynerchuk that allows him to distinguish between casual conference-goers and superfans.
NFTs have transformed marketing at Vaynerchuk’s media empire. Five years ago, “VaynerMedia was really focused on helping partners think through influencer strategies,” said VaynerNFT President Avery Akkineni. “Instead of working with one big influencer, you might work with 20 smaller ones, but now other companies have caught up.”
The more you know about your customers, especially your most intense customers, the more you sharpen your competitive edge. And only NFTs can provide that level of precise data about your most engaged consumers.
Brands are beginning to see that NFTs offer more sophisticated ways of reaching and engaging consumers. Now, VaynerMedia is focused heavily on becoming early adopters of web3 for their partner brands. “We are putting them in contact with really cool NFT projects… there is still an opportunity for brands to partner with them so 1+1 can equal 11,” said Akkineni.
Consider VaynerMedia’s partnership with Johnnie Walker, the legendary liquor purveyor. VeeFriends Gift Goat holders received a special and limited edition version of Johnnie Walker’s blue label whiskey. By selling NFTs, brands are able to invite consumers into a journey across different price points – and reward them accordingly based on their level of engagement. That journey, in turn, can create a “fear of missing out,” or FOMO, that leads to greater marketing impact and visibility in the community.
Or take Rally, a platform for buying and selling equity in collectibles. It has pioneered new applications of NFTs by using them to fractionalize well-known assets so that anyone can be a part investor. Whereas collectibles and fine art are too expensive for most consumers, NFTs allow individuals to hold shares in the same asset.
Rally surprised attendees at VeeCon 2022 by announcing that all participants would receive fractionalized ownership over a new VeeFriends NFT. “We find the stuff that has a history of returns and is investment worthy… we think about the things people care about now – the giant generational brands,” said Rob Petrozzo, Co-founder and Chief Product Officer for Rally. “Young people look at these as more interesting than just a ticker symbol… we’ve tried to make affordable and fractionalized NFTs, and do it in a way that you care about and can relate with,” he said.
By enabling fractionalization, Rally also helps create additional liquidity in markets that are usually thin. The market for a specific piece of fine art may only have a few bidders, which creates significant market power and volatile valuations. “Our secondary market was set up in such a way so that the market determines what that resale value should be,” Petrozzo said.
The value of buying an NFT does not get accrued at the end of the single purchase, instead a stream of benefits follows. Ticketing and discounts are two of the clearest use cases. “The next step we’re working on now is monetizing the collections so that there are consumers who want to be part of events with the actual items,” said Petrozzo.
Nadine Abdel Ghaffar, the Founder and Curator of Art D’Égypte, also shared substantial news at VeeCon with the drop of its Forever Is Now NFT collection. For the first time, NFT holders will have access to an international art exhibition held at the Pyramids of Giza, the oldest and last remaining wonder of the “seven wonders of the ancient world.”
For now, the marketing benefits of NFTs seem a little like putting up a web page in 1995: grabbing a bit of nerd acclaim while the world looks on uncomprehendingly. But, soon web addresses became valuable real estate, assets. The knowledge that NFTs can generate about customers, web3 enthusiasts at VeeCon say, will likewise become sought after assets.