NFTs: from the bubble bursts the opportunity – ID, Blockchain

As the speculative bubble surrounding NFT assets continues to deflate, we stand at the precipice of a transformative era in the marketing realm, one where the utility of NFTs may emerge as a pivotal focus. Brands are poised to leverage this technology to create practical, loyalty-driven applications that could set new benchmarks in consumer engagement.

In 2021, an NFT representing Jack Dorsey’s first tweet fetched a staggering $2.9 million. Fast forward to recent developments, and the owner attempted to auction it for $48 million, only to receive a top bid of $280. This stark disparity raises significant questions: Is this a mere anomaly signaling the end of excesses, or are we witnessing the dawn of a thoughtful evolution in NFT utility as brands pivot toward practical applications?

Stakeholders in the NFT Landscape
The NFT space attracts a diverse range of participants, categorized broadly as follows:

• Early Adopters: Much like Bitcoin pioneers, these initial investors saw intrinsic value in NFTs, often without a clear understanding of long-term implications.
• Speculators: Drawn by potential profits, these investors entered the market in 2021 with the primary aim of flipping assets for quick gains.
• Long-term Investors: This group has been systematically acquiring NFTs with the expectation of sustained value appreciation.
• General Public: Many are realizing that the window for buying low and selling high may be closing, especially in light of recent market dynamics.

One intriguing aspect lies in the behavior of early Ethereum (ETH) investors, who acquired ETH at minimal cost during its initial offerings. For these holders, trading a few ETH for a Bored Ape Yacht Club NFT may feel less impactful than for newer investors who bought ETH at inflated prices. Conversely, many speculators, driven by rapid profit motives, engaged in speculative trading on platforms such as OpenSea, resulting in a rising trend of failed secondary sales due to unrealistic price expectations.

Current Landscape and Future Directions
The meteoric rise of NFTs, from pixelated images of apes to multi-million-dollar assets, prompts a reevaluation of their viability as a sustainable business model. The entrance of high-net-worth individuals in 2021 highlighted the perceived value of being early to market, but as we’ve seen, market correction is inevitable.

Corporations like Asics, Coca-Cola, Taco Bell, McDonald’s, and the NFL have begun exploring the NFT space strategically, often linking their initiatives with charitable causes. However, while brand recognition garners initial interest, the ultimate goal will be to forge real value propositions for consumers.

Less recognized brands face a monumental challenge: how to identify meaningful opportunities and create perceived value through their NFT offerings. They must consider whether digital art is the sole NFT application or just the beginning of a broader marketing transformation that redefines how they connect, engage, and foster loyalty among their audiences.

The Path Forward
NFTs represent a broad spectrum of possibilities extending far beyond digital art. Potential applications include:

• Unlockable Digital Experiences: Offering exclusive access to content, events, or benefits.
• “Members Only” Access: Providing special privileges and merchandise for NFT holders.
• Ownership of Physical Goods: Bridging the gap between digital and tangible assets.
• Marketing Opportunities: Creating innovative promotions to enhance brand visibility and engagement.
• Enhanced Community Engagement: Building deeper emotional connections through unique NFT experiences.

For the NFT market to thrive, stakeholders must recognize the intrinsic value in the assets being developed. Marketing tactics must evolve to meet these new challenges, requiring thoughtful content strategies, targeted messaging, and active engagement on social media platforms and channels like Discord. The potential to forge long-lasting brand loyalty and customer advocacy through effective NFT strategies is unparalleled.

Ultimately, as brands navigate this landscape, the challenge lies in identifying the framework for success while crafting suitable NFT assets. By prioritizing utility and value creation, businesses can harness the true power of NFTs, positioning themselves to emerge as leaders in this dynamic digital economy.

About the Authors
Corey Padveen is a partner at T2 Marketing International, editor-at-large for iGB, and author of “Marketing to Millennials for Dummies.” He also contributed to “Digital Marketing All-in-One for Dummies.”
Stephen Padveen boasts over 30 years of experience in developing and executing marketing strategies for globally recognized brands across diverse sectors including gaming, entertainment, and retail. His expertise spans traditional, online, social media, and influencer marketing.