Part 1: The State of NFT Technology and Current Adoption in Marketing

4
VP, Programmatic Solutions
at
Sharethrough
4
minutes
Technical Level
June 7, 2022
4
minutes
Technical Level
June 7, 2022
Emil Torma
VP Programmatic Solutions
This article examines the exciting world of NFTs and looks into what their current use cases are as well as how brands and marketers are already using the technology to their advantage.

An Overview of NFT Technology and Recent Adoption in Marketing

The Digital advertising industry has been at the forefront of technology since its inception at the start of the 21st century, with some of the biggest tech companies today driving innovation in the space. Because of this precedent, each time a new and exciting technology appears in the digital space, many will question and even assume that the new technology will have a relevant application in the advertising industry. This can be observed with recent developments of NFTs which overnight became an attention-grabbing sensation in the crypto and digital art space and subsequently a product which marketers and brands started utilizing for branding awareness. In this post I will be examining the exciting world of NFTs and looking into what their current use cases are as well as how brands and marketers have already used this exciting technology to their advantage.  

What are NFTs?

The NFT acronym stands for “non-fungible token” and can be best described as computer files combined with proof of ownership and authenticity. For the latter, think of a digital version of a deed or receipt. Just like cryptocurrencies, they exist on a blockchain which you could consider as a fraud-resistant digital public ledger. Like our current monetary currencies, cryptocurrencies are fixed in value (1 bitcoin always equals 1 bitcoin) however by contrast NFTs have a unique value which is set by the highest bidder. 

Conception and Rise in Popularity of NFTs

Much like with the internet in the early 90s when it was just starting to take shape, the blockchain/crypto technology along with Web 3.0 are still in their infancy. Products like websites, email, file hosting servers and many more were all developed with the internet as the backbone and NFTs could be considered the first real product using the blockchain/crypto technology as its backbone. 

The current NFT popularity can best be described as hype-driven digital art auctions. It involves digital artists who want to sell their work as NFTs and who sign up to a crypto marketplace allowing them to create digital tokens by uploading and validating their information on a blockchain. Afterwards they can list and auction off their piece of art on an NFT marketplace.

The initial batch of NFTs attracted hype from artists and collectors (and potentially investors), but also criticism that it may be the latest overvalued market bubble waiting to burst. Some NFT’s were sold for millions with the highest NFT art sale thus far is a work called “Beeple – Everydays: The First 5000 Days,” selling for $69,346,250 (38,525 Eth). This NFT art craze combined with the hype surrounding the metaverse is currently attracting a lot of media attention, however there may be a more relevant and functional use for NFT technology outside of the art scene and in the real world. 

NFT Adoption by Brand and Marketers

As NFT adoption and hype surrounding them began to swirl, brands and marketers were one of its first adopters for the technology.

Authentic Digital Collectables

Initial efforts by brands were designated to leverage NFT technology to create authentic digital collectables for fans and customers. The most successful product of this kind being the NBA Top Shot platform which sells authentic video highlights from NBA games, much like selling physical trading cards in the past. Other brands like Nike started offering exclusive and unique digital sneakers using NFTs which can sell for substantial amounts of money (up to $20,000 dollars per shoe). While still promoting the brand, these NFT products have become genuine revenue streams and aren’t specifically tied to advertising. 

NFTs Designed by Brands Themselves

A slightly alternative approach involved brands tying their strong brand awareness advertising with the coolness factor of new NFT technology hype. This was initially launched by Taco Bell and McDonalds, both of whom created a well-timed campaign and sold exclusive pieces of digital animated art related to their fast-food restaurants in NFT format. These campaigns created buzz for their brands and for the NFT medium while it was still a novelty. 

Loyalty Programs

Other strategies employed by brands include NFT powered loyalty programs which allow brands to identify and track engaged brand super users as well as NFT digital access passes which link owners to specific brand communities.

Current Adoption and Application of NFT Technology

While the idea of collectors paying ridiculous amounts of money for digital works of art that can be copied and shared online for free may seem absurd to some, these early NFTs art adopters have decided to make a bet on the future potential and value of this technology, which in turn attracted the world's attention. Resellers and those looking for a quick profit aside, those buying NFT art today are betting that the technology will have a more functional and valuable place in the Metaverse and the Web 3.0 ecosystem. Prior to NFTs, an original digital piece of content could not be identified and authenticated online easily. However, by creating an NFT, the creators are adding tamper proof blockchain authentication to their content, which validates authenticity and potentially creates scarcity.

Brands have also taken notice of this technology and have deployed it primarily by using their already strong brand awareness to generate NFT art, or by using it for digitally attributable loyalty programs. We also see a few examples such as NBA Top Shot where brands have developed new products and revenue streams generating millions of dollars.

We are only beginning to scratch the surface of what this exciting technology is capable of in the digital advertising space. In the next post, we will dive deeper into potential future use cases and potential of NFTs in the digital advertising space.

This article examines the exciting world of NFTs and looks into what their current use cases are as well as how brands and marketers are already using the technology to their advantage.

An Overview of NFT Technology and Recent Adoption in Marketing

The Digital advertising industry has been at the forefront of technology since its inception at the start of the 21st century, with some of the biggest tech companies today driving innovation in the space. Because of this precedent, each time a new and exciting technology appears in the digital space, many will question and even assume that the new technology will have a relevant application in the advertising industry. This can be observed with recent developments of NFTs which overnight became an attention-grabbing sensation in the crypto and digital art space and subsequently a product which marketers and brands started utilizing for branding awareness. In this post I will be examining the exciting world of NFTs and looking into what their current use cases are as well as how brands and marketers have already used this exciting technology to their advantage.  

What are NFTs?

The NFT acronym stands for “non-fungible token” and can be best described as computer files combined with proof of ownership and authenticity. For the latter, think of a digital version of a deed or receipt. Just like cryptocurrencies, they exist on a blockchain which you could consider as a fraud-resistant digital public ledger. Like our current monetary currencies, cryptocurrencies are fixed in value (1 bitcoin always equals 1 bitcoin) however by contrast NFTs have a unique value which is set by the highest bidder. 

Conception and Rise in Popularity of NFTs

Much like with the internet in the early 90s when it was just starting to take shape, the blockchain/crypto technology along with Web 3.0 are still in their infancy. Products like websites, email, file hosting servers and many more were all developed with the internet as the backbone and NFTs could be considered the first real product using the blockchain/crypto technology as its backbone. 

The current NFT popularity can best be described as hype-driven digital art auctions. It involves digital artists who want to sell their work as NFTs and who sign up to a crypto marketplace allowing them to create digital tokens by uploading and validating their information on a blockchain. Afterwards they can list and auction off their piece of art on an NFT marketplace.

The initial batch of NFTs attracted hype from artists and collectors (and potentially investors), but also criticism that it may be the latest overvalued market bubble waiting to burst. Some NFT’s were sold for millions with the highest NFT art sale thus far is a work called “Beeple – Everydays: The First 5000 Days,” selling for $69,346,250 (38,525 Eth). This NFT art craze combined with the hype surrounding the metaverse is currently attracting a lot of media attention, however there may be a more relevant and functional use for NFT technology outside of the art scene and in the real world. 

NFT Adoption by Brand and Marketers

As NFT adoption and hype surrounding them began to swirl, brands and marketers were one of its first adopters for the technology.

Authentic Digital Collectables

Initial efforts by brands were designated to leverage NFT technology to create authentic digital collectables for fans and customers. The most successful product of this kind being the NBA Top Shot platform which sells authentic video highlights from NBA games, much like selling physical trading cards in the past. Other brands like Nike started offering exclusive and unique digital sneakers using NFTs which can sell for substantial amounts of money (up to $20,000 dollars per shoe). While still promoting the brand, these NFT products have become genuine revenue streams and aren’t specifically tied to advertising. 

NFTs Designed by Brands Themselves

A slightly alternative approach involved brands tying their strong brand awareness advertising with the coolness factor of new NFT technology hype. This was initially launched by Taco Bell and McDonalds, both of whom created a well-timed campaign and sold exclusive pieces of digital animated art related to their fast-food restaurants in NFT format. These campaigns created buzz for their brands and for the NFT medium while it was still a novelty. 

Loyalty Programs

Other strategies employed by brands include NFT powered loyalty programs which allow brands to identify and track engaged brand super users as well as NFT digital access passes which link owners to specific brand communities.

Current Adoption and Application of NFT Technology

While the idea of collectors paying ridiculous amounts of money for digital works of art that can be copied and shared online for free may seem absurd to some, these early NFTs art adopters have decided to make a bet on the future potential and value of this technology, which in turn attracted the world's attention. Resellers and those looking for a quick profit aside, those buying NFT art today are betting that the technology will have a more functional and valuable place in the Metaverse and the Web 3.0 ecosystem. Prior to NFTs, an original digital piece of content could not be identified and authenticated online easily. However, by creating an NFT, the creators are adding tamper proof blockchain authentication to their content, which validates authenticity and potentially creates scarcity.

Brands have also taken notice of this technology and have deployed it primarily by using their already strong brand awareness to generate NFT art, or by using it for digitally attributable loyalty programs. We also see a few examples such as NBA Top Shot where brands have developed new products and revenue streams generating millions of dollars.

We are only beginning to scratch the surface of what this exciting technology is capable of in the digital advertising space. In the next post, we will dive deeper into potential future use cases and potential of NFTs in the digital advertising space.

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About Behind Headlines: 180 Seconds in Ad Tech—

Behind Headlines: 180 Seconds in Ad Tech is a short 3-minute podcast exploring the news in the digital advertising industry. Ad tech is a fast-growing industry with many updates happening daily. As it can be hard for most to keep up with the latest news, the Sharethrough team wanted to create an audio series compiling notable mentions each week.

This article examines the exciting world of NFTs and looks into what their current use cases are as well as how brands and marketers are already using the technology to their advantage.

An Overview of NFT Technology and Recent Adoption in Marketing

The Digital advertising industry has been at the forefront of technology since its inception at the start of the 21st century, with some of the biggest tech companies today driving innovation in the space. Because of this precedent, each time a new and exciting technology appears in the digital space, many will question and even assume that the new technology will have a relevant application in the advertising industry. This can be observed with recent developments of NFTs which overnight became an attention-grabbing sensation in the crypto and digital art space and subsequently a product which marketers and brands started utilizing for branding awareness. In this post I will be examining the exciting world of NFTs and looking into what their current use cases are as well as how brands and marketers have already used this exciting technology to their advantage.  

What are NFTs?

The NFT acronym stands for “non-fungible token” and can be best described as computer files combined with proof of ownership and authenticity. For the latter, think of a digital version of a deed or receipt. Just like cryptocurrencies, they exist on a blockchain which you could consider as a fraud-resistant digital public ledger. Like our current monetary currencies, cryptocurrencies are fixed in value (1 bitcoin always equals 1 bitcoin) however by contrast NFTs have a unique value which is set by the highest bidder. 

Conception and Rise in Popularity of NFTs

Much like with the internet in the early 90s when it was just starting to take shape, the blockchain/crypto technology along with Web 3.0 are still in their infancy. Products like websites, email, file hosting servers and many more were all developed with the internet as the backbone and NFTs could be considered the first real product using the blockchain/crypto technology as its backbone. 

The current NFT popularity can best be described as hype-driven digital art auctions. It involves digital artists who want to sell their work as NFTs and who sign up to a crypto marketplace allowing them to create digital tokens by uploading and validating their information on a blockchain. Afterwards they can list and auction off their piece of art on an NFT marketplace.

The initial batch of NFTs attracted hype from artists and collectors (and potentially investors), but also criticism that it may be the latest overvalued market bubble waiting to burst. Some NFT’s were sold for millions with the highest NFT art sale thus far is a work called “Beeple – Everydays: The First 5000 Days,” selling for $69,346,250 (38,525 Eth). This NFT art craze combined with the hype surrounding the metaverse is currently attracting a lot of media attention, however there may be a more relevant and functional use for NFT technology outside of the art scene and in the real world. 

NFT Adoption by Brand and Marketers

As NFT adoption and hype surrounding them began to swirl, brands and marketers were one of its first adopters for the technology.

Authentic Digital Collectables

Initial efforts by brands were designated to leverage NFT technology to create authentic digital collectables for fans and customers. The most successful product of this kind being the NBA Top Shot platform which sells authentic video highlights from NBA games, much like selling physical trading cards in the past. Other brands like Nike started offering exclusive and unique digital sneakers using NFTs which can sell for substantial amounts of money (up to $20,000 dollars per shoe). While still promoting the brand, these NFT products have become genuine revenue streams and aren’t specifically tied to advertising. 

NFTs Designed by Brands Themselves

A slightly alternative approach involved brands tying their strong brand awareness advertising with the coolness factor of new NFT technology hype. This was initially launched by Taco Bell and McDonalds, both of whom created a well-timed campaign and sold exclusive pieces of digital animated art related to their fast-food restaurants in NFT format. These campaigns created buzz for their brands and for the NFT medium while it was still a novelty. 

Loyalty Programs

Other strategies employed by brands include NFT powered loyalty programs which allow brands to identify and track engaged brand super users as well as NFT digital access passes which link owners to specific brand communities.

Current Adoption and Application of NFT Technology

While the idea of collectors paying ridiculous amounts of money for digital works of art that can be copied and shared online for free may seem absurd to some, these early NFTs art adopters have decided to make a bet on the future potential and value of this technology, which in turn attracted the world's attention. Resellers and those looking for a quick profit aside, those buying NFT art today are betting that the technology will have a more functional and valuable place in the Metaverse and the Web 3.0 ecosystem. Prior to NFTs, an original digital piece of content could not be identified and authenticated online easily. However, by creating an NFT, the creators are adding tamper proof blockchain authentication to their content, which validates authenticity and potentially creates scarcity.

Brands have also taken notice of this technology and have deployed it primarily by using their already strong brand awareness to generate NFT art, or by using it for digitally attributable loyalty programs. We also see a few examples such as NBA Top Shot where brands have developed new products and revenue streams generating millions of dollars.

We are only beginning to scratch the surface of what this exciting technology is capable of in the digital advertising space. In the next post, we will dive deeper into potential future use cases and potential of NFTs in the digital advertising space.

About Calibrate—

Founded in 2015, Calibrate is a yearly conference for new engineering managers hosted by seasoned engineering managers. The experience level of the speakers ranges from newcomers all the way through senior engineering leaders with over twenty years of experience in the field. Each speaker is greatly concerned about the craft of engineering management. Organized and hosted by Sharethrough, it was conducted yearly in September, from 2015-2019 in San Francisco, California.

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Emil Torma
VP Programmatic Solutions

About the Author

Technology and solutions focused, Emil has over 18 years of digital media experience and remains passionate about innovation and brand success to this day. Working at Sharethrough for the past 6 years, Emil has worked on managing the Canadian market expansion, European expansion and is currently engaged in driving sales engineering and business development opportunities for the company.

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