NFTs, Utility, and Marketing
How projects and brands are using utility and marketing in the NFT space.
A contribution for ONE37PM
During the prime days of the NFT bull run in 2021, selling a 1/1 art piece or a 10,000 collection was fundamentally more easy than it is today. Why? It was early and every new project that launched was another chance to potentially join the next BAYC or CryptoPunks.
But since then, demand has changed and after many collectors have watched their NFTs plummet, they have realized that utility is required for projects to last in the long term.
Furthermore, where marketing was seemingly minimal in the early days, today it is has become a contributing proponent for the success and take-off of a project. In this article, we will outline the importance of utility, in addition to the ways in which projects and brands utilize marketing in the space.
Interestingly, for NFTs, there is no clear definition of what utility is, often it is the success of one project that defines what utility is, whereby other projects follow and mirror the said ‘utility’.
There is certainly a ubiquitous buzz surrounding the word and in many cases, the utility that is promised is often not utility at all with many collectors accepting that a lot of projects will eventually go to 0. That being said, there are cases of real utility, where collections offer something pertinently different from the rest.
The Bored Ape Yacht Club created by Yuga Labs is the staple NFT collection, they have hit the mainstream and brought early minters exponential success. However, initially, their utility was very minimal when considering what is required to take a project off today.
In addition to this, it took over a week for the project to completely sell out. They first dropped the bathroom, a collaborative art space for token holders to contribute for fun.
However, serious value began to accrue through their airdrops which included the Bored ape kennel club as well as the Mutant ape yacht club. Extending the ape universe enabled new members to join the club while simultaneously sustaining the value of the collection.
With their roadmap 2.0, they have furthered the utility of holding a BAYC significantly. With plans for a DAO, a game, real-life events, a BAYC token, and more, they are presenting a number of different unique utilities that will only see the value of bored apes increase over time even more.
The Bored Ape Yacht Club did not need to hire professional marketers, nor did they have to implement a complex marketing campaign. Instead, they are an example of where a die-hard community took the project into their own hands.
Their community has extended the ecosystem by leveraging their IP and creating sub-collections such as beverage brands, streetwear, and animated stories, all of which have contributed to significant growth within the project.
However, this is limited to only some exceptional collections where everything aligns. On the contrary, for many projects, a lot more is required before they are able to fully bloom in the NFT space.
For many projects, creating an NFT collection is almost like creating a mini start-up where small groups of individuals work as a team to launch, create, communicate and deliver the NFT. In the case of a small team, the juggling of each of these roles is a tough task, especially when considering the volume of projects that are competing in the NFT world.
This is where marketing proves key, and the hype is just as important as any of the factors presented above. Irrespective of the art, or team, if a project is underpinned by hype, there is a high likelihood that they will succeed at drop, but this is not to say it will in the long term.
Take for instance Mekaverse, despite it being one of the most hyped projects for months, it quickly depleted in value with concerns about the artwork and insider trading. Evidently, what makes a good NFT project is a balance between each of these factors.
A number of elements are required for marketing to be successful, firstly you need the tools. Twitter, Discord, and a Website are all required to plant the seeds for a thriving community, and once a community emerges, a community manager is required to glue all of the elements together.
But it is not just the macro level that is required, the micro is perhaps even more important. What do I mean by this? Mainstream marketing will not work, native web 3 users can see right through it, you have to be engaged in the culture and understanding of the day-to-day NFT world.
Simply entering the space with no prior experience of the culture will only lead to doubt from the community, it is a very niche target audience that you are pitching to and if it doesn’t seem natural, it will quickly be found out.
Take for example the corporate brands that are now transitioning into the NFT space, they are not just marketing NFTs, they are marketing themselves.
Despite their large followings, they have not demonstrated what many consider the correct approach to building community. The community is labeling their efforts to learn the lingo as ‘cringe’ and some have gone as far as to say that it is disrespectful.
What is required is authentic learning, immersion, and practice, a solid understanding of the space and genuine engagement is key. These are the first steps to successful marketing and hence why many mainstream brands are employing native NFT users to their teams.
The pitfall for many corporate brands entering the space is industry knowledge.
Let’s consider White Castle, a prominent American hamburger chain restaurant. Just recently they announced their new ENS domain name “whitecastleofficial.eth”, they changed their Twitter profile to a Seahams NFT and have also collaborated with Che-Yu Wu, a generative art producer to bring a new collection to doodle labs.
Furthermore, White Castle has shown an understanding of the space, they have presented to their audience the NFTs that they own and they are collaborating with web3 natives that are well respected in the community. All of which demonstrate their intent to immerse into the community the right way, as opposed to simply entering and hoping to market themselves
Today, the biggest digital art institution, Artnet granted prominent NFT community member Andrew Wang the opportunity to take over their Twitter page and take a deep dive on all things NFTs. In a landmark move, they changed their profile picture to his iconic upside-down cool cat marking the NFT takeover.
During the 3 hour period, Andrew shared a number of things to their audience including his own NFT story, his thoughts on the cooperation between traditional and digital art, as well as listing some of his favorite creators in the NFT space.
The takeover was representative of something more than promotion, instead, it demonstrated a moment in which the traditional world embraced a digital and niche culture, putting trust into the hand of a creator, and showcasing the event to their 1.9 million followers.
Both of these cases illustrate two major corporate giants that have taken the time to understand the space, and educate their audience rather than entering the space simply for the sake of profiting, and this is the key difference.
The extent to which marketing has become increasingly more important can be highlighted through the growth of agencies, platforms in which teams offer services to NFT projects to assist with their launch, marketing, and development. One notable example is SHILLR, a one-stop consulting and marketing agency.
The team is comprised of well-known and respected members of the NFT community including My Rugema, Bernardo Cafe, Winny, Funghibull, ALT.EGO, and Takesprofit. Many of them hold Punks and have extensive experience in the space, both the good and bad making them very well-trusted community members.
Since they were established just 5 months ago, they have worked with a number of artists and projects, assisting them with all of their needs. Whether this is help with launching, the creative direction, webpage development, marketing, or consultancy, they are bringing artists and creators to the forefront of the community.
Furthermore, SHILLR has participated in a number of events from organizing the NYC NFT treasure hunt with POAP, attending the NFT London conference, and driving the SHILLR van around NYC and Miami, they have already begun to bridge the digital with reality in a number of cases.
SHILLR is an example of the changing times in the NFT space, as more people enter the world, and mainstream adoption becomes more of a reality, there needs to be something in place to enable the transition from web2 to web3, and SHILLR is doing just that.
What’s more, the team is heavily invested in the NFT space, so much so that they invest their profits back into the ecosystem through the purchasing of more NFTs. Again this reinforces their stance as a reputable and trusted service.
It is no question that NFTs have become increasingly more difficult to sell. In a competitive climate, both utility and marketing serve as important components if a project is to succeed.
Furthermore, for success, projects require a background in the space, experience, and more than a surface-level understanding. In recent weeks the corporate brands that have entered the space have demonstrated mixed approaches, some showing consideration for the space, and others not entirely. Nonetheless, the signs for potential mainstream adoption are becoming more evident.
Finally, as the space grows and the market becomes more competitive, we are seeing the introduction of agencies, helping to support creators with their NFT projects and again this is another indication of the growth of NFTs in the past year alone.