Many of you have been seeing the buzz about NFTs. That buzz has crept into the world of digital marketing. Unfortunately, the buzz is disconnected from awareness and understanding. Most people reject what they don’t know (me included). A six months deep-dive convinced me that the future of digital marketing includes NFTs. Do not sleep on this technology. This article attempts to explain why NFTs should receive your attention.
For starters, both NFT and email marketing can be retention-based channels. Obviously both can do a lot more, but for the purpose of this article, we will focus on the overlapping similarities between email and NFTs.
What is an NFT?
NFT stands for Non-Fungible Token. That is a big word for “this is unique.” The fine artists have always created 1 of 1 unique pieces of art. You can make a copy of the Mona Lisa, but you cannot make an exact copy of it. The Mona Lisa is a distinct 1 of 1 painting. NFTs allow you to replace the artwork of the Mona Lisa with anything that can be represented digitally (which are easier to carry.) NFTs are however more than the 1 of 1 scarcity, they are also utility.
Image Source: https://pixabay.com/vectors/the-mona-lisa-leonardo-devinci-vinci-3124131/
What is Utility?
Utility is central to the discussion of NFTs. What additional value do I get from owning this NFT? The most obvious utility is membership.
Distributed Ownership
Through the blockchain (another big word which basically means very secure ledger or spreadsheet), we can certify which NFTs are owned by you and contained in your digital wallet. This distributed ownership is fundamental to Web3. As a marketer, you could create one-hundred-thousand NFTs and distribute them to your most loyal customers. These NFTs could be membership to your loyalty program or a specific offer.
Offer Customization
You identify customers based on the NFT in their wallet whether in person or a digital property. No PII is exchanged or stored. You are still able to track and customize your offers based on the arbitrary wallet and NFT IDs. There are no credentials, cookies or some proprietary identifier. The nature of the technology allows you to determine whether the offer is only redeemable by your customer, or if it is sharable.
Push
Push a coupon to anyone that holds your membership NFT. The recipient consents to receiving the NFT. Now at checkout, the coupon holder can transfer it back to the brand for their discount by simply associating their wallet. The brand can also expire the NFTs in a customer’s wallet, so an offer is not left available forever.
How does this work?
One of the reasons that email has been so successful is that it is neutral. No one owns or controls email. NFTs have that same independence. They are built on the blockchain, which is neutral. Think about the blockchain like a global database or ledger stored on computers around the world.
Both Email and NFTs require consent
NFTs can be purchased or given away. Either way, the new owner consents to receiving the NFT in their digital wallet. Everything on the blockchain is consent driven. Consent is uniform, consistent and stored in one place. NFT owners can also remove consent without the need for any additional tech. In contrast, email consent is an add-on instead of consent by design requiring forms, servers and data storage.
"Web3 will drive a new "opt-in" era for marketers and consumers alike with new business models we are just scratching the surface of. Few consumers want to be "sold to" but nevertheless most consumers are interested in being introduced to relevant, useful, offers and opportunities provided by creators, brands and institutions they like, trust and feel an affinity with."
- Shamir Ozery, Head of Web3, Algorand Foundation
Loyalty
NFTs and blockchain add additional functionality with loyalty points. Think about a frequent flier program. You have a Frequent Flier ID and accumulate miles (points) redeemed for free flights. The blockchain and NFTs include this “points” functionality without any additional technology spend. For the nerds, those loyalty points would be built on Layer 2 blockchain technology. Some of the brightest minds in digital marketing are thinking about NFTs and loyalty. Rajesh Jain, founder and managing partner of Netcore Cloud said:
"We think of NFTs as Extreme Retention. It can be thought of as an NFT which opens a world of privileged experiences for the Best Customers – so they can keep coming back for more and bring their friends, maximising their category spend with the brand. Extreme Retention is about replacing profit killers with profit creators. It provides a roadmap for marketers to reimagine marketing for the Web3/Metaverse Era, and position themselves not just as CMOs but as Chief Profitability Officers, a title which will be much in demand during the coming slowdown and likely recession."
- Rajesh Jain, Founder & Managing Partner, Netcore Cloud
Usability and Tools
At this stage of evolution, the usability of the blockchain requires a PhD. Tools are non-existent. Industry adoption and investment will change that through custom brand wallets, or NFT inboxes. Early embracers of this technology will shape the landscape positioning themselves as key influencers and paving the way for digital marketers in the future.
Power consumption
There are green alternatives to the heavy power consumption long associated with crypto currencies. It is called proof of stake. This starts with the concept that all crypto value is already known and should just be assigned. This approach makes it so some blockchains are not only carbon neutral but carbon negative. A lot of criticism has been lodged toward blockchains like Bitcoin. These blockchains require an excessive amount of energy to be mined. This activity is called Proof of Work. It runs mathematical algorithms to find anomalies. Those identified anomalies have value and consume a lot of power. Proof of work is not sustainable for marketing applications.
Email is still king, but…
Are NFTs the next coming of email? No one knows. They will be part of the marketing landscape. An early understanding of the NFT technology positions the email marketer to take every advantage of that opportunity brought about by this change. At this stage, awareness is enough for most email marketers. Read articles, join a community (maybe) and be prepared to guide your organizations into NFTs when appropriate. The world of email is changing as are the demands that are being placed on the email marketer. Because there is so much money represented by email marketing, no one believes that it will go away, but it will change, and with that change comes opportunity.
Editor's Note: Enjoy this post? Join us for the OI-members-only discussion on this post, led by author Paul Shriner (AudiencePoint), on Thursday, August 25, 2022, starting at 12:00 Noon ET. Not an OI member? Reach out to OI GM Jeanne Jennings to request a guest pass (limited quantity; first come, first served).