By now, most marketers have heard the term non-fungible token (NFT) bandied about in connection to both art auctions and recent brand campaigns, but many may still be wondering how this hot new trend fits into advertising. What are NFTs, exactly? Why do brands value them? And how are they being used? We broke down the basics behind the technology that’s currently getting a lot of attention.
First, a definition. “Non-fungible” refers to something that’s unique and can’t be replicated, like a one-of-a-kind trading card. In contrast, bitcoins are fungible, meaning you can swap one for another and still have the same item. But like bitcoins, NFTs are made using blockchain technology, which carries a unique string of code that can’t be altered. An NFT acts as a certificate of ownership for anything digital, from music to a drawing to a brand logo, but much of the current hype revolves around selling NFTs as works of art. Some are being auctioned for millions of dollars, like the piece from a previously unknown digital creator named Mike Winkelmann, aka Beeple, that commanded $69 million at Christie’s and skyrocketed him to instant fame as one of the “top three most valuable living artists.”
General Mills recently dove into the NFT art hype by creating and auctioning 10 digital works to celebrate the return of its Chocolate Dunkaroos snacks, which were discontinued in 2012 then brought back amid the nostalgia wave millennials and Gen X members are feeling for ‘90s-era products and experiences. The illustrations, dubbed “new frosting tokens,” were auctioned in May on Rarible, an online marketplace for crypto assets.
Brands Jump Onboard
Classic brands like Coca-Cola are likewise marrying ultra-modern technology with nostalgic elements. The beverage brand’s non-fungible offering features three NFTs housed inside a fourth larger piece that looks like a retro Coca-Cola vending machine circa 1956. “NFTs have opened up a new way for brands to tell their story and build relationships with consumers,” said Aaron Levant, CEO of video shopping platform NTWRK. “Traditional brands are getting into the NFT space because it offers a completely new type of brand experience and engagement.”
Campbell’s soup recently honored the redesign of its beloved label, first made famous by Andy Warhol’s 1960s pop-art series, by pairing with another artist to deliver a digital creation. Sophia Chang’s 100-piece NFT collection, called “AmeriCANa—Sophia Chang X Campbell’s” kept the classic red and white lettering while slightly altering the logo. “We’ve been on a journey to reimagine this iconic brand and appeal to new generations of consumers who are cooking at home more than ever, while still honoring our rich history,” said Linda Lee, Campbell CEO.
DKNY, meanwhile, just revealed its fresh logo by auctioning it as the clothing brand’s first NFT. Inspired by an old New York City mural, the animated logo boasts Times Square lights, East River Parkway runners, bikers, voiceovers and soundtracks of classic New York sounds, as an ode to the city that never sleeps. “We’re excited for DKNY to launch our new logo through this art form,” said VP Jeffery Goldfarb. “The digital art highlights the brand’s strong bond with New York City in a way that is uniquely our own and pushes the brand into this digital space with our first NFT.” Other fashion houses, including Gucci, Louis Vuitton, Burberry and Ralph Lauren, have plans to release their own non-fungible tokens into the metaverse.
Though NFTs may be digital assets of the future, they’re not entirely free from controversy. The amount of computer processing required to complete each blockchain transaction is enormous. It’s estimated that production of a single NFT has a carbon footprint equal to one month of electricity used by a resident of the European Union. Growing awareness of this environmental toll has led to climate concerns regarding crypto technology, with some eco-conscious brands attempting to offset those emissions. Case in point: Elf Cosmetics, which recently turned nine of its most popular beauty products into crypto collectibles called “N.e.l.f.Ts.” The beauty brand partnered with sustainability platform Aerial to reduce its environmental footprint by crafting carbon-negative NFT offerings.
Other brands are donating auction proceeds to charity. Enter Procter & Gamble’s Charmin brand that crafted rolls of NFT toilet paper meant to be displayed in bathrooms next to real toilet-paper rolls. Following bidding on Rarible, all funds went to nonprofit group Direct Relief to help deliver emergency medical supplies to communities in need. Likewise, Stella Artois recently got creative by auctioning celebrity chef Marcus Samuelsson’s signature fried chicken recipe in the form of an NFT. The non-fungible token also included a one-of-a-kind video of Samuelsson disclosing cooking secrets. Proceeds benefitted the James Beard Foundation, which has provided aid to the culinary industry in the wake of pandemic-related job losses and restaurant closures.
While NFTs continue to draw the attention of art lovers, investors, tech enthusiasts, gamers and Saturday Night Live writers, marketers are keeping pace with their own brand offerings. We’ll be on the lookout for upcoming additions to the digital world!