NFT
The rise of Non-Fungible Tokens (NFTs) has created a new frontier for brands looking to engage with consumers in a more meaningful way. However, as more and more brands enter the space, many are discovering that what they have committed to actually requires methodical, continuous effort and engagement that escalates with each milestone. Basically, brands are finding themselves in a type of ‘engagement Ponzi scheme’ that their marketing teams are not equipped to handle. Here’s why.
The challenge stems from two things:
- Many users ask for “utility” from NFTs, but what they actually mean is “entertainment” (which is a basic form of utility).
- Blockchains have not matured sufficiently — nor have the dApps built on them — to deliver either the sufficiently diverse utility or basic entertainment to meet the lofty expectations of users and keep them engaged long term.
If brands are not able to deliver enough entertainment, users will become dissatisfied and the NFT initiative fizzles from the drop in momentum.
At the same time, in order to meet the high expectations of users, brands are being forced to commit more and more resources to the NFT space. This is unsustainable in the mid- to long term.
There must be many cooks in the kitchen
When the topic of NFTs pops up internally at any global brand, a question emerges: Who owns it? I don’t mean the NFT, I mean who owns the responsibility of managing the NFT side of the business? Suddenly everyone looks at marketing, because Marketing has the capability to produce engaging content to connect with users. And what else should NFTs be classified as, other than a new way to engage with loyal users?
There are a few problems with this logic. Here’s the revolving door of stakeholders that end up being pulled into this discussion:
- NFTs are sold by the brand and marketing teams don’t manage sales — enter the sales team or “Chief Revenue Officer.”
- NFTs inevitably include intellectual property from the brand. Marketing teams don’t usually handle IP matters independently as that’s usually handled by the legal team.
- NFTs have a heavy social/community component to them. Pure marketing teams incorporate some of this function, but often they don’t fully own it. This is where the communications team and/or social team come into play.
- NFTs have a perpetuity product component to them and marketing teams don’t typically handle product development entirely (or at all). This is where a product team is needed.
Here’s what it boils down to. When a global brand enters the NFT space, it commits to an indefinite amount of engagement with NFT holders since these same holders have expectations for special access/content, etc. What this means is that brands have to become providers of utility to these users. In effect, these brands have to become active producers of (at a minimum) entertainment for NFT holders.
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Marketing teams at large corporations (even if they had full ownership of NFT initiatives) are not equipped solely to put out volumes of entertainment for users. It is a mistake to assume that users will be sufficiently entertained by the collectibility of the NFT — derived from IP-branded scarcity — and that minimal effort will be required by the brand itself after this initial ‘cash grab.’ This mindset usually means the NFT initiative is treated similarly to a short-term advertising campaign which is owned by the marketing team, neglecting the very serious (and complex) architecture and product requirements needed for a genuine long-term NFT engagement.
Ultimately, treating NFT drops with this short-term mindset fails because creating marketing assets for users is a complex process that requires a great deal of planning, design and execution. From a marketer’s perspective, it is essential to have a deep understanding of user demographics, as well as a thorough understanding of the brand’s values and messaging. This requires a significant amount of market, user and design research.
The production process also requires extensive coordination between different departments, such as design, development and copywriting to ensure that all elements align with the brand’s messaging and goals. Additionally, the production process often involves elaborate (and expensive) design requirements, such as creating high-quality visual assets, video production and animation, as well as ensuring that the final product is optimized for different devices and platforms. All this complexity makes it hard to scale and leverage marketing assets to supplement the utility or entertainment that NFT holders want.
The only way for brands to deliver enough entertainment from NFTs is to establish communal online areas where NFT holders can interact and entertain each other. This way, engagement can scale without overburdening the brand. Gaming is an ideal platform for this because it is the richest form of community-powered entertainment. By leveraging the power of gaming, brands can create immersive and engaging experiences that scale with the audience and will keep users coming back for more.
Many brands are still entering the market in the hope of making a quick profit. But without a solid plan for how to engage with users, they will quickly find themselves in a situation where they are overburdening their resources and underwhelming their users.
The key takeaway here is that brands need to think carefully about how they will manage users’ expectations while scaling the utility and entertainment required to keep them engaged. If they want to succeed, they need to focus on creating communal online spaces where users can interact with and entertain each other. Gaming is the ideal platform for this and could be instrumental in helping brands scale their engagement efforts in a sustainable way.
By focusing on community-powered entertainment, brands can create engaging experiences that will keep users coming back for more, while also avoiding the pitfalls of the ‘engagement Ponzi scheme.’
Mark Soares is the Founder of Blokhaus Inc, a Marketing & Communications agency in the Web3 and Blockchain category.
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.
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