Metaverse Brand Marketing Guide

NFT is a non-fungible token with the characteristics of being indivisible, irreplaceable, and unique. Along with the popularity of the metaverse concept, NFTs with metaverse genes have also become popular overseas, and international brands have entered the NFT marketing market.

However, China's NFT market is still in its early stages of exploration, and many domestic brands are still waiting and watching - what positive impacts will NFT bring to brands? How to do NFT marketing? What potential risks should be considered?

Table of contents:

• NFT marketing value: four functions + eight ways to play
• NFT frontier forms: directions that NFT marketing can explore
• NFT Marketing Tips: Domestic Market Environment and Trends
• NFT Basics: What NFTs Mean and What They Mainly Do

1. NFT marketing value: four functions + eight ways to play

1. Unleash consumers’ enthusiasm for participation

NFTs are like blind boxes, combining collectibility and scarcity. When brands bind products with NFTs, consumers' enthusiasm for participation will be fully released. According to a survey by Advertising Age, a well-known American advertising magazine, 30% of consumers explicitly stated that they "hope to receive NFT as a gift when purchasing goods."

(1) Reward the earliest purchaser

Overseas Case: AMC Cinemas in the United States launched the first NFTs marketing campaign to reward movie ticket buyers: the first 86,000 premium members who purchased and watched the new movie "Spider-Man: No Way Out" will receive a Spider-Man theme series NFT reward designed by AMC and Sony Pictures Entertainment. On the night of the sale, AMC's online ticket sales surged and traffic reached an all-time high.

Domestic case: Audi and well-known artist Cheng Ran used the new Audi A8L 60 TFSIe as inspiration to create a series of NFT works "Fantasy Highway" depicting pioneering future scenes. The first 100 car owners will be randomly drawn to win the “Fantasy Highway” series NFT. Audi fans left messages saying "This NFT work is really good, I want this one", "It's a dream collaboration, this coin is going to fly", "A unique art exclusive", "This gift for the car owner is very noble", and some netizens even asked to transfer the NFT.

(2) Reward those who purchase the most

Overseas Case: How did Gary Vaynerchuk, a five-time New York Times bestseller and technology investor, sell 1 million copies of his new book in 24 hours? Any buyer who purchases 12 books within 24 hours can receive a VeeFriends from his first NFT series. The Wall Street Journal pointed out that the series is worth more than $500 million. Attracted by the huge prospects, the average purchase amount per person was 36 books, and the most purchased was 1,008 books.

Domestic case: Oreo launched the world’s first white Oreo, combining it with the classic black model to create a “Chinese ink painting style”. "The Most Fun Little Cookie" pioneered the use of blockchain technology, simultaneously issuing a digital ink scroll on the chain based on an offline ink art exhibition, and deconstructing the digital ink scroll into 5,000 NFOs (Non-fungible OREO). Consumers can get more chances to win "Oreo cookies that never expire" by making multiple purchases or sharing with multiple friends. By cleverly combining the “machete” social fission with the NFT pioneering hotspot, Oreo has pushed consumers’ enthusiasm for participating in activities to a climax.

There are many other ways to use NFT to stimulate enthusiasm for participation. In addition to the two most common methods of "rewarding consumers who purchase the earliest or the most", brands can also use NFT marketing to guide users to share on WeChat Moments, actively download apps, and extend the time fans stay in the Douyin live broadcast room, etc. You are welcome to share your ideas with everyone in the comment section.

2. Enhance emotional communication with consumers

NFTs also act like badge souvenirs, creating emotional experiences and exclusive memories for consumers who participate in brand events. According to an Advertising Age survey, 38% of consumers who are aware of NFTs said they prefer to use NFTs to commemorate the happy moments they had from an event rather than physical souvenirs. Consumers hope to find some way to commemorate the highlights of important holidays or major events. When NFTs capture, share and touch these moments without limits, brands can strengthen their emotional connection with consumers.

(1) NFT Festival Marketing Commemoration

Overseas case: To commemorate the 200th anniversary of the birth of brand founder Louis Vuitton, LV launched a themed commemorative game "Louis: The Game". The game’s adventure theme of collecting 200 birthday candles from around the world allows players to learn about the brand’s growth history. Players can collect 30 NFT rewards in the game, 10 of which are from the famous digital artist Beeple. The game's exquisite graphics, dreamy scenes, and beautiful background music immerse players in the experience. NFT engraves the player's "soul-healing journey" into an exclusive memory, which invisibly strengthens the player's infinite yearning for the luxury brand LV.

Domestic case: This year’s Alipay “Collect Five Blessings” campaign used digital collectibles as a medium to apply the traditional symbol of “tiger” to creative New Year marketing. Alipay has partnered with 21 museums across the country, and users can redeem their extra blessing cards for digital collections of "tiger relics" in the Fuqi Store, commemorating the Year of the Tiger in a unique way. Through the integration and innovation of the artistic essence of 5,000 years of tradition and the future-oriented blockchain technology, Alipay's Five Blessings Collection activity once again impressed users and took another step towards becoming a "contemporary Spring Festival traditional custom."

(2) NFT event marketing commemoration

Overseas case: The National Football League NFL will provide free NFTs to viewers at this year's Super Bowl. The NFT is like a unique electronic ticket, corresponding to each viewer's region, rank and seat. As NFL Vice President Bobby Gallo said, "Collecting tickets has always been something fans love to do, and providing customized Super Bowl NFTs can enhance the fan experience." NFT tickets combine the functions of traditional tickets with artistic collection and commemorative value. In the future, brands can create NFTs containing key information such as event time, location, theme, celebrity artists, etc. for art exhibitions, fashion shows, pop-up stores, sporting events, etc., to help participants commemorate meaningful events in a more collectible form.

Domestic case: Yili launched the "Champions Shining 2022" digital collection for the first time during the Beijing Winter Olympics, including 7 special editions and 1 hidden edition. The special edition is limited to 2022 copies worldwide, and the hidden edition is the world's first NFT that is open to personal customization. It is limited to 17 copies worldwide and is an extremely scarce collection. The digital collection not only brings Yili's Olympic quality and innovative spirit to more young consumers, but also helps the brand establish a longer-lasting and closer emotional connection with consumers. Sponsoring brands can use NFTs to record important historic moments on the field, such as the Chinese women's football team's stunning comeback goal and Gu Ailing's championship win by breaking her personal limit, because long-term held digital collections will remain forever in the digital world and will not disappear with the end of the game or the reduction of advertising.

3. Create an ideal brand image

NFTs also provide companies with new marketing tools to shape an ideal brand image in the minds of young consumers.

(1) Helping brands become younger

According to research by Statista, an authoritative data platform in the United States, the majority of NFT investment users in the United States are millennials and Generation Z. Although the domestic NFT market model is different from that of overseas markets, market players are mainly young people. According to The Paper, Pan Bo, founder of ODin NFT platform, once introduced that “the largest number of people participating in NFT transactions in China are those born after 1995, followed by those born between 1990 and 1995, and then those born in the 1980s, and there are very few those born in the 1970s and 2000s.” With the help of NFT marketing, brands not only attract a new generation of audiences, but also help build a young brand image, because it shows that the brand is at the forefront of trends and has a common language with Generation Z and young millennials.

Domestic case: Young consumers have become the backbone of the domestic home improvement market, and the national time-honored brand Red Star Macalline is facing the challenge of a brand leap from the post-60s to the post-90s. If you want to communicate with young consumers in multiple dimensions, NFT is one of the best carriers. At the end of last year, the brand released the first NFT digital collection "Love Home Ferris Wheel" in the domestic home furnishing industry. Consumers can receive it for free by clicking on the official account article. The 999 limited edition collections were sold out in less than 2 hours after it was released. The issuance of this NFT has undoubtedly enhanced the brand's youthful and trendy image, allowing more young people to pay attention to and support Red Star Macalline. When international brands such as LV and Nike use NFT to narrow the distance with young people, domestic brands can also refer to it and plan their youth strategies in a diversified way in advance to achieve the goal of brand rejuvenation.

(2) Enhance the public welfare of the brand

Young consumers particularly value whether brands can express their opinions on issues they care about, and are more favorable to brands that take the initiative to assume social responsibility. By holding NFT charity auctions, sponsoring artists, and other forms, brands not only renew the way companies do charity, but also use the NFT technology chain to make the brand's goodwill more transparent, secure, and efficient in the wave of social welfare.

Overseas case: Budweiser launched a randomly generated "Budweiser Royale" NFT series to support emerging musicians. The collection features 11,000 NFTs based on 22 artists, and each token will be randomly generated upon purchase. Users who win the ultra-rare NFT can connect with the artist via video and enjoy the concert on Discord.

Domestic case: Tencent and the Dunhuang Research Institute jointly released the first public welfare NFT in the cultural and museum field. Users who participate in the Dunhuang cultural Q&A interaction in the "Cloud Tour Dunhuang" applet will have the opportunity to win the Dunhuang "Digital Patron" collector's edition NFT: a panoramic digital card with Cave 156 of Mogao Grottoes. For each correct answer, Tencent Charity will randomly make a matching donation to support the digital protection of Dunhuang Mogao Grottoes.

4. Explore the benefits of brand diversification

Although most international brands currently choose to donate the proceeds from NFT sales to charities, this behavior can be interpreted as brands testing the industrialization of NFTs, including the possibility that brands will directly sell virtual main products in the future and use the brand's unique assets or advantages to create NFTs.

(1) NFT-ification of the main business

Overseas Cases: The unique French luxury brand Balenciaga has deeply explored Balenciaga's classic works and created four sets of NFT fashions for the four fans' favorite Fortnite game characters, accurately presenting the appearance and texture of Balenciaga's iconic fabrics, and also functionalized the fashions. For example, the Speed ​​3.0 sneakers can be transformed into a hoe prop in the game, and the Hourglass bag can be transformed into a glider prop.

Balenciaga has added new sources of brand revenue by launching NFT fashion and opening retail stores in the game. At the same time, the brand has also collaborated with Fortnite in the real world to launch a limited edition physical clothing series, directing the joint effect from the virtual world back to the real world and forming a closed consumption loop.

Domestic cases: The domestic NFT market has not yet seen any brands NFT-ify their main business, but local digital fashion brands based on the metaverse world have been born. Meta Street Market is a new virtual digital fashion brand under Shiyuexingcheng, which fills the market gap of China's virtual digital original brands. The transaction price of NFT virtual digital sneakers sold on overseas platforms has exceeded 30,000 yuan, becoming a sought-after object among young circles.

(2) NFTization of brand assets

Overseas Cases: Time magazine’s iconic red-framed cover has witnessed every important moment in human history and has become its most important brand asset. Last April, TIME magazine auctioned three classic text-only magazine covers from different periods on the NFT platform SuperRare. The themes were "Is God Dead?", "Is Truth Dead?" and "Is Fiat Dead?", leading people to think about the impact of digital currency on fiat currency. The three NFTs were eventually sold at an auction price of $443,000. Although consumers are faced with digital collectibles supported by novel blockchain technology, the strong brand credibility and popularity of Time magazine itself make consumers feel at ease and willing to pay a high price.

Domestic case: On the occasion of its sixth anniversary, Nayuki, the "world's first tea stock", not only officially announced the IP character NAYUKI from the metaverse as its brand ambassador, but also launched the NFT digital art series "Creating Beauty" around IP brand assets. Although this NFT series does not have investment attributes, it is still recognized by domestic consumers for its extremely high collection value and commemorative significance. Only 7 models were released worldwide, and only 300 copies were sold online in the form of blind boxes, but they were all sold out within one second of the sale.

In addition, the NFT payment code skin launched by Alipay is also a classic example of a brand's innovative combination of NFT and brand assets. It was sold out as soon as it went online.

Brand assets themselves have unique characteristics, and NFTs built around brand assets have more desirable scarcity and uniqueness. Therefore, big brands that can inspire loyal followers can create unique new forms of communication with consumers by NFTizing their brand assets.

2. NFT Frontier Forms

1. NFT marketing can explore new directions

By leveraging the four major functions of NFT marketing and related gameplay, brands can enhance their connections with consumers at different touchpoints, gain brand popularity and topics, enhance brand image, and convert commercial benefits. At the same time, brands can refer to some cutting-edge forms in the NFT field, actively explore the long-term construction of brand assets, enter the digital world with NFT marketing, and enhance consumer stickiness to the brand.

(1) Programmable interactive NFT

The interesting thing about programmable interactive NFTs is that brands and consumers can co-create NFT works and share the economic benefits of the works through digital crowd-creation interactive algorithm technology. "Metaverse Fireworks" launched by Hongdong Shuzang during the Spring Festival beautifully combines the traditional culture with thousands of years of history with the latest scientific and technological technologies. Through the programmability of smart contracts, consumers can purchase individual Metaverse fireworks through blind boxes for viewing and collection, or combine multiple fireworks to obtain new, rarer, and higher-level fireworks. Ultimately, all held fireworks will be combined into a new large-scale digital art work, "Fireworks Universe". The co-creation of NFT works allows consumers to transform from passive recipients of brands to active participants of brands. The brand becomes a stage for consumers to express themselves, and the profit-sharing mechanism allows consumers to upgrade from active participants to "brand partners", effectively improving consumer brand favorability and stickiness.

(2) NFT Games

NFT games can induce people's intrinsic motivations, effectively achieve changes in attitudes and behaviors, and to a great extent stimulate the activity and stickiness of consumers. The collectible game "NBA top shot" developed by the NBA in cooperation with blockchain company Dapper Labs is one of the most successful NFT games currently. Collectors can obtain authentic digital collections of NBA star highlights through gamification methods, such as opening instant pack blind boxes, challenge competitions, and high-level competitions. NBA top shot has developed a huge community that is more loyal to the NBA brand, increased game ratings and player ratings, and NBA commentators now say "This is a moment worthy of NBA TOP SHOT!" Brands can create truly sticky content through NFT games, transform the way players communicate, upgrade the relationship between players and brands, and ultimately transform them from ordinary gamers to promoters of brand community building.

(3) NFT virtual character model

The "Clone X" series is an NFT 3D virtual character project launched by the virtual art creation group RTFKT Studios (now acquired by Nike) in collaboration with Takashi Murakami. Similar to world-renowned NFT avatar projects such as Bored Ape and Phanta Bear, Clone X allows buyers to enjoy the social functions brought by NFT avatars, including a) low-key identity display and b) joining the target circle.

and 2) rights and interests functions, including a) real-world rights and interests such as obtaining discounts or gifts on goods and b) virtual-world rights and interests such as virtual-world concert tickets.

When issuing NFTs, brands can give NFTs functional benefits beyond “avatars” from the perspectives of brand assets, product selling points, and consumer demand, thereby enhancing the value of brand NFTs and increasing the popularity of the topic through public relations. For example, Nike airdropped its first mysterious box with the brand logo, MNLTH, to Clone X holders in February this year (floor price $18,000). The official team said that the way the contents of this airdrop will be revealed will be different from the past, making owners more excited about the birth of the contents, and Nike has once again successfully put itself on the popularity list amid heated discussions among fans.

But what is even more exciting about Clone X is its NFT Avatar concept: Clone X is a character model with a 3D skeleton system, which means that buyers can have a "metaverse" virtual substitute like Avatar. Clone X can be implanted with AI to interact with the owner and enhance the experience through VR devices, so buyers can use them in AR filters, Zoom or NFT games, making NFT+AI+VR a trinity.

In addition, since Clone X is compatible with multiple platforms, players can use their purchased Clone X images in metaverse worlds such as "Sandbox" and "Decentraland" at the same time. The Clone X project, which combines AR, VR, and AI and can span multiple metaverses, can provide a broader development space for brands to engage in cross-border collaborations in the virtual world, and to collaborate in the form of brand digital humans, and other marketing methods.

No matter how good NFT technology is, it is just an advanced technology. Imagination is the best bridge for brands to connect consumers with the digital world. I believe that time will give birth to more creative brand cases and bring us one step closer to the future.

3. NFT Marketing Tips

1. Domestic market environment and trends

(1) Domestic policy environment

Judging from the domestic regulatory attitude towards virtual currency and "mining" activities, the "wildly" growing NFT is bound to be burdened with controversy and regulatory shackles.

The country does not recognize the overseas NFT model. One of the manifestations is that users in mainland China cannot purchase NFTs from overseas platforms. This is why the Bing Dwen Dwen digital blind box officially authorized by the International Olympic Committee does not currently support purchases by users in China.

The second is that domestic regulatory authorities have defined NFT as a digital collectible, which aims to give full play to the NFT's digital property rights certification function, including 1) using RMB as a transaction currency to ensure value stability. 2) Emphasize the value of the work itself rather than the payment function. 3) Replace the decentralized public chain in overseas markets with a multi-centered alliance chain, and make it non-transferable from the source design.

Although the operating rules of the domestic NFT market are unique, the country is actively supporting the development of a de-financialized digital collectibles market. Since the beginning of 2022, the Baidu Index of digital collectibles has shown a rapid growth trend.

Official media such as Xinhua News Agency and CCTV.com and the Shanghai Securities News, a media required by the China Securities Regulatory Commission to disclose securities market information, have successively entered the field of digital collectibles, affirming the value of digital collectibles themselves based on blockchain technology, the asset value of digital collectibles as digital assets, and their collection value as a new type of collectibles in the digital age. The domestic digital collectibles market is ushering in spring.

(2) Domestic market environment

The NFT industry chain consists of alliance chains, issuance platforms and project issuers.

Alliance chain: provides blockchain technology support for NFT, such as Alibaba's Ant Chain, Tencent's Zhixin Chain, Baidu's Super Chain, JD's Zhizhen Chain, etc. The alliance chain has advantages in speculation control and energy consumption, and is more in line with the development requirements of the domestic NFT market.

Distribution platform: Project distribution provides blockchain technology and traffic support, which is mainly divided into the following types. 1) Internet giants that own infrastructure, such as Alibaba’s Whale Tan and Tencent’s Huanhe. 2) An Internet digital content platform that provides copyright protection for digital content (Zhixin Chain protects Penguin articles) and monetizes digital content with NFTs (Visual China’s Meta Visual Platform). 3) Metaverse social game application development companies, such as Baidu Let’s Dog project.

Project issuers: 1) Internet digital content platforms and their upstream content issuers, such as digital content assetization, such as Kugou's single "How to Sigh" collector's edition digital collection, IP monetization, such as the "Cyberpunk Grey Wolf" digital print c) Cooperation with content promotion, such as the "Anti-Corruption Storm 5" digital collection in conjunction with movie promotion. 2) Domestic fast-moving consumer goods, beauty, retail and other brand owners cooperate with distribution platforms to issue digital collections. The types of cooperation are mainly divided into PGC and UGC.

(3) Domestic development trends

On January 4, 2022, the Digital RMB (pilot version) APP was launched. Trading digital collectibles through digital RMB will help prevent and supervise speculation, money laundering and other behaviors, and promote the formulation of domestic digital collectibles trading rules.

In addition, under the guidance of the government, the NFT industry is expected to gradually open up the secondary market, and cultural exchanges with official government backgrounds may take the lead in exploring the formulation of trading rules and standards for the secondary market for digital collections. With the development of blockchain technology, blockchain games and the metaverse will drive the expansion of the NFT industry, and more and more traditional companies will enter the NFT market in the future. The scale of China's NFT market is expected to reach 29.52 billion yuan in 2026, with great development potential.

However, there are also uncertainties in domestic NFT marketing, including:

1) Uncertainty in regulatory policies: With the promotion and popularity of NFT applications, the minting, issuance, sales, and circulation of NFTs will be subject to regulatory intervention in the future. The uncertainty of national supervision may affect the stability of NFT projects.

2) Speculative risks are widespread: irrational factors of market participants lead to speculation. The NFT marketing process needs to avoid speculation caused by the limited issuance and scarcity of NFTs, such as the recent chaos of blind boxes mentioned by CCTV Finance.

4. NFT Basics

1. NFT meaning and main functions

(1) NFT definition and characteristics

In a narrow sense, NFT generally refers to tokens issued based on the Ethereum standard ERC-721; in a broad sense, NFT is a blockchain-based digital asset ownership with characteristics such as indivisibility, irreplaceability, non-interchangeability, uniqueness, verifiability, circulation, and tradability.

In the real physical world, assets can generally be divided into homogeneous assets and non-homogeneous assets. Digital assets on the blockchain are also divided into homogeneous digital assets and non-homogeneous digital assets. The most common homogeneous digital assets include "virtual currencies" such as Bitcoin and Ethereum, while non-homogeneous digital assets include non-homogeneous tokens such as game projects and digital artworks.

(2) NFT value and function

Since the birth of NFT, the NFT value and corresponding functions generated based on its characteristics mainly include: 1) NFT can effectively protect intellectual property rights. Because NFTs are registered and stored on the distributed ledger of the blockchain, they are maintained by thousands of computers, and the NFT generation and transaction records are difficult to tamper with, so the interests of the original creators can be effectively protected through NFTs based on blockchain technology.

2) NFT can improve transaction efficiency and reduce transaction costs. Because the smart contracts embedded in NFTs can help creators easily prove the authenticity and ownership of NFTs, commodities with extremely high economic value, such as luxury wine brands, precious teas, and antique calligraphy and paintings, can use NFTs as asset identification (100% traceable real assets) and circulation certificates (reducing circulation costs). Users can directly withdraw physical objects with NFT or transfer goods in the form of transfer certificates.

3) NFT can improve asset liquidity and tradability. Because NFT can refer to any asset, some difficult-to-trade assets can be traded through NFT, so any digital photos, audio and video content can be converted into digital art works in the form of NFT, which is the main way for domestic and foreign brands to conduct NFT marketing.

If 2021 is the "first year of NFT" when "everything can be NFT", and the overseas cryptocurrency circle has set off a financial storm in the form of NFTs such as pictures, texts, videos, games, and artworks, then 2022 will be the year for brands to explore the initial bonus period of NFT marketing. The earlier the brand starts, the greater the creative space it will have. With the recurrence of the epidemic, people's work and life are increasingly shifting to the digital world, and the importance of digital assets will undoubtedly continue to increase.

NFT makes it possible to determine the value ownership, property rights confirmation, and virtual identity authentication of various digital items in the metaverse. I believe that with the standardized development of the domestic digital collection industry, NFT digital collections will become an effective carrier to help brands digitize and enhance the brand's value and influence in the digital world.