Collectibles are inescapable in marketing at the moment. Nonfungible tokens (NFTs), unduplicable digital assets that use blockchain technology to certify ownership of a piece of media like a photo or video, have experienced a sustained surge of interest from brands in 2021. And while NFTs are the buzziest iteration of collectibles, representing an aspect of the so-called “metaverse,” there are analogs in real-world goods, with a proliferation of branded merchandise and limited-edition product collaborations targeted at superfan consumers.
For marketers, experimenting with collectibles remains a PR-driven tactic, but also one that tries to read the tea leaves on what the next generation of consumers — a group of digital natives readily familiar with channels like gaming — will want to see from brands.
“We had a time when people were interested in buying physical goods. It was a scheme that gave them a sense of status … millennials really changed a game and said, ‘Hey, actually, we want to spend more money on experiences,'” said Emma Chiu, global director of Wunderman Thompson Intelligence. “Now it’s shifting again to virtual possessions. It’s not necessarily having a digital version of a physical good, it’s a combination of these physical goods and these experiences put together into this virtual realm”.
One question hanging over tactics like NFTs, in particular, is if they have legs past the short term. Since NFTs first hit the mainstream earlier this year, skeptics have been waiting for the bubble to burst and raised concerns about their environmental impact. Yet, brand activations haven’t cooled: McDonald’s, State Farm, American Eagle, and Toys R Us are among the many to foray into the red-hot market in recent weeks. At the same time, lofty ideas around a metaverse — shared spaces that bridge aspects of the real world with virtual ones — have dominated executive chatter on earnings calls and even informed major platform realignments. It’s a concept that appears here to say, whether or not general consumers actually want it.
NFTs are still perhaps a bigger roll of the dice than marketers are accustomed to making, speaking to the broader uncertainty hanging over companies that are trying to connect with increasingly ad-averse audiences. They also aren’t especially popular: A recent report from Forrester Research found that 45% of surveyed online adults in the U.S. had never even heard of the format, while 28% stated they don’t understand what NFTs are.
Diversity is even more scarce. One in five online U.S. male respondents indicated they already own at least one NFT versus 7% of female respondents who reported the same. Thirty-seven percent of male respondents expressed eagerness to acquire one compared to just 16% of female respondents. Despite recognition gaps, the collectibles hype machine is running at full force, leading to high valuations and a chance for marketers to flex their IP muscles in a way that could eventually win over new consumers and draw deeper connections with existing fans.
“There is this bigger demand around collectibles and ownership, whether it’s digital or physical, that you see being of the moment,” said Mike Proulx, research director at Forrester and a co-author of the NFT report. “When you look at the chatter in the community online and Twitter, most of the conversations are around collectibles today”.
CMOS are not yet making NFTs or other collectibles a significant line item in the budget, according to Proulx. Most cracks at the technology are intended to generate headlines and some positive word-of-mouth.
“The initial drivers are the shiny object syndrome,” said Proulx. “When it comes to NFTs, we don’t see it as a seismic shift in the marketing mix, per se”.
If NFTs prove sticky, however, more nuanced approaches could be required to make collectibles seem less like a marketing gimmick.
Proulx views NFT strategies as currently settling into one of two camps: stunt drops and NFTs that leverage IP in a more meaningful fashion, offering consumers an asset that could be linked to other content or value-adds. For insiders, brand-driven output has largely fallen into the former category.
“I haven’t been personally impressed with some of the things I’ve seen thus far,” said Darren Mann, president of Aria Exchange, an NFT trading platform that is part of media company Aria Network. “I don’t think some of the gimmicky drops are going to have sustainability”.
There are some standout examples of NFTs deployed for a purpose. Bacardi and agency BBDO New York in October partnered with music producer Boi-1da on a collection of music-themed NFTs that dole out a cut of royalties to the assets’ owners. To promote the latest installment in “The Matrix” franchise, Warner Bros. is creating 100,000 digital avatars with the platform Nifty’s and selling them for $50 apiece starting Nov. 30. Owners can make different choices for their avatar, like taking the red or blue pill from the movies, and participate in challenges themed around the film’s plugged-in universe.