Are NFTs the Future of Branding?

Companies can get people excited about their products by turning different aspects of their brands into NFTs, called “tokenization,” and then putting them into circulation, sometimes at auctions or at fan giveaways. The tokens are virtual or tangible.

Non-fungible tokens (NFTs) are branding’s hot new currency. “An NFT is a digital certificate of authenticity,” according to AdAge. “It’s similar to taking a painting to an appraiser or a contract to a notary public, only it’s online.” NFTs’ range is what makes them so cool. SYFY writes that they can be “pretty much anything from a simple GIF to Magic the Gathering playing cards to fine art.”

For example, this February, the NBA introduced the NBA All-Star VIP Pass NFT Auction and Giveaway, where 30 of the NFTs that are up for grabs will “grant each owner a VIP pass for the ultimate fan experience at the next five NBA All-Stars.” NFTs and events like these also help companies earn revenue on what they’ve tokenized because they can get the profits from their NFTs’ sale and resale. And so, brands are finding creative ways to embrace this new frontier.

Fox recently tapped into the NFT’s popularity to give audiences a stake in its new show, Krapopolis. In 2021 show creator Dan Harmon whose other television projects include Community and Rick and Morty said that the new series would roll out in a year. Krapopolis “takes place in mythical ancient Greece and will center on a flawed family of humans, gods, and monsters that tries to run one of the world’s first cities without killing each other,” writes IndieWire.

While the show may be set millennia in the past, it’s venturing into branding’s future. According to comingsoon.net and Deadline, “Fox and Bento Box Entertainment are launching a marketplace for the new show including curating and selling digital goods, ‘ranging from NFTs of one-of-a-kind characters and background art and GIFs.’ [LHS1] ” This concept has the potential to change both the television and blockchain industries. Cinemablend writes that this branding strategy “will allow the show’s eventual superfans to have premier access and ownership of the series whenever it makes its way onto the tube in 2022, and it’ll be a watershed moment for NFTs — should it really prove to be A) a successful series and B) the future of entertainment as we know it.”

Pizza Hut Canada also joined the NFT frenzy by selling tokenized images of their product. Last year, the company “declared that starting on March 16, every day at lunchtime, it would release an 8-bit-style version of Pizza Hut favorite recipes for auction,” Mashed reported. “In other words, they’re selling digital pictures of pizza.” The company’s branding effort gained traction in almost no time. AdAge writes that “Pizza Hut listed the pizza art for sale at .0001 Ethereum, which is equivalent to 18 cents” and that a pepperoni pizza NFT, which sold for about that amount, “was quickly put back on the market by the new owner for five Ethereum, or $8,824.07.” Although Pizza Hut wasn’t the one putting that pepperoni NFT up for sale again, it could still earn from its appreciation due to built-in royalties. “The NFT royalties are automatic payouts to the author made on secondary sales,” Cyberscrilla explains. “Each time a secondary sale happens, the smart contract ensures that the terms of the NFT are fulfilled. If a royalty is specified, a cut of the profits goes to the artist who created them.”

And college athletes, such as the University of Oregon’s Ducks football team, are hoping to capitalize on innovative uses of NFTs as well. According to AdAge, “Sport venture company Division Street is opening an NFT marketplace to help University of Oregon student-athletes build their brands and connect with fans, boosters, and collectors.” It’s what accompanies these NFTs that is helping the project hit the ground running. Nice writes that “a series of 120 unique NFTs” come “with a physical pair of Oregon Ducks edition Nike Air Max 1s, which are personally signed by the man who designed the iconic sneaker.” The branding effort worked. “Well over $500,000 dollars were made,” writes USA Today’s Ducks Wire, “two-thirds of which will be split evenly among players on the roster.”

While major brands such as the Ducks, Pizza Hut, and Fox can enter the NFT market forcefully, the technology also democratizes branding by allowing smaller stakeholders such as artists to bypass the middleman. Forbes writes that “blockchain technology and NFTs afford artists and content creators a unique opportunity to monetize their wares. For example, artists no longer have to rely on galleries or auction houses to sell their art. Instead, the artist can sell it directly to the consumer as an NFT, which also lets them keep more of the profits.”