Does Your Brand Need NFTs?
October 3, 2022
It was just last March when Beeple’s “Everydays: The First 5000 Days” sold for a record $69 million at a Christie’s Auction. Not only was that the most ever spent on an NFT, or piece of digital art, but for many, it was the first time they even heard the term, non-fungible token. Since then NFTs, also commonly referred to as digital tokens, have become noticeably more visible in mainstream media and perhaps give us more evidence that our society is continuing to move towards a digital world where we will purchase more digital goods that will live on a blockchain.
Whether it’s Facebook pivoting and re-branding as Meta, household names like Jimmy Fallon, Eminem, and Snoop Dogg, sporting their Bored Ape Yacht Club NFTs as their social media profile pictures, or colossal brands like Starbucks, Nike, Ticketmaster, and Budweiser shifting their status quo in the areas of customer experience, marketing, and brand engagement to include digital tokens & collectibles, the evidence of brands and influencers leveraging NFTs is getting harder to ignore.
So what does this mean for me?
Although you might not be representing a Fortune 500 company, creating NFTs for yourself, your business, or cause provides an opportunity for business owners, artists, and influencers to create another revenue-generating, marketing, and brand-building tool that can be the ultimate win-win for them and their community. Revenue aside, creating NFTs that supporters can acquire and own empowers them to take an even deeper interest in supporting that brand or business. Depending on the utility of the NFT and the way the smart contract that it is written on, fans could be financially incentivized to potentially become less of a passive supporter, and more of a proactive ambassador for the brand to help that asset grow in value.
Let’s think about it practically.
For the moment, let’s pretend you’re a musical artist that has built a loyal community of followers and fans through years of producing content on your YouTube channel. You decide it’s time to create and release your first album. Instead of going the traditional route of finding and signing with a record label who will produce and market your album, as well as take the majority of your proceeds, you decide to leverage the technology and create tokens, and release it in conjunction with an NFT project.
Naturally, you turn to your community of followers & supporters to reveal the news that you’re releasing a limited supply of 1000 NFTs for $1000 each. Not only will these NFTs come with the album, but they will serve as a special VIP rewards pass. As the owners of these tokens, holders receive special perks, or utility. This could include VIP status at live events, virtual or in person meet & greets, merchandise, other NFTs, and any other utility depending on how creative and generous you want to be. Even the crypto skeptics in the crowd would likely see the value and recognize the unique opportunity. How could a super-fan pass it up?
But wait, there’s more.
Using smart contracts and other web3 technologies allow us to innovate and (literally) rewrite the rules of this game. Why not go a step further and create more value for your community?
Let’s say you create another fifty premium NFTs to your collection. These “golden” tokens would come with all of the bells & whistles of the others, but since they’re super exclusive, they have another smart contract clause written into them.
One where holders receive a percentage of all the sales & stream revenue from this album. For this instance, we’ll assume the percentage is .002% per NFT.
At $5000 each, there is a potential of $250,000 generated just for those top-tier tokens. Perhaps even more interesting than a substantial influx of cash, a sell-out could potentially bring on fifty people that really want to see the album do well. Fifty unique perspectives, skill-sets, and networks that are not only supporting you, but are really incentivized to actively help contribute to your success.
If the launch is successful, you’ll likely be thrilled to give the ten percent to those fans who supported you in the early days, rather than giving the lion’s share to a record company for producing the same album.
Oh, and speaking of those record companies.
Should any original holder sell their token to someone else for any reason, you as the creator, get to set and keep a royalty for each transaction. Forever. Generally, smart contracts are set up for this to be anywhere between 3–12% but the reality of it going back to the original artist, business, creator is yet another attractive detail to consider.
Of course in business there are always countless variables that are out of any one person’s control, many of which contribute or deter the success of a marketing campaign or product launch. When it comes to a collection of NFTs, one thing that is in the creator’s control is the amount of value or utility that is added to benefit the holders of those tokens. Whether or not you deliver value is up to you, but your actions will be reflected on the blockchain.
After digesting this particular hypothetical, maybe you’re inclined to check out Royal.io, where you can currently acquire tokens to own partial royalties from artists such as The Chainsmokers and Nas. Or perhaps you’re envisioning and contextualizing the nuances of this contemporary marketing strategy and pontificating how you could use it to help your actual business.
With that, it might be prudent to share a reminder, especially to those who are navigating these web3 waters for the first time, that what happens on the blockchain, stays on the blockchain. For better or worse, it’s all there.
Despite what any NFT project creator is promising or declaring, the blockchain is a transparent ledger of what they’re actually doing, or not doing.
To revisit our aforementioned example, if you sold out of your token and were so unbelievably grateful that over time, you airdropped many gifts to your holders, it would show up on the blockchain for all to see. On the contrary, if you documented that you would allocate a portion of funds generated to x, y, z and instead of delivering on those promises, over time you moved that money to your personal wallet, the blockchain would reflect that.
As more and more talented and creative people learn about and utilize NFTs to help elevate their brand and create a stronger sense of community, the use cases will become increasingly more dynamic and symbiotic between the creators and the supporters. The use cases start, but certainly don’t end digitally. Yes, a Twitch streamer can deliver value by airdropping another NFT or shipping headphones to holders. But, a value add could be a free large pizza at your pizza franchise. It could be free coffee at your cafe on Fridays. The possibilities are endless and brands (along with reputations) will be made in conjunction with the blockchain and how they interact with these technologies.
Although you may not be a musical artist with a YouTube following, you may have a business with a loyal group of customers. You might be a health coach influencer with a list of engaged clients, or maybe you actually might really own a cafe. Whatever sphere you’re in, utilizing NFTs is the next Swiss-army knife of marketing and brand building, enabling you to you to not only crowdfund while you build and strengthen your community of supporters, but at the same time having the opportunity to reward and add value to them in a powerful, meaningful, and genuine way.
Gauss is launching a layer 1 ecosystem for creators, brands and their communities later this year. If you’re looking to learn more about what’s happening at Gauss, check out their YouTube channel to get caught up. For the latest announcements and updates, be sure to check out the Gauss Discord and sign up for the newsletter here.