The Business of NFTs: How Brands Can Leverage Non-Fungible Tokens for Marketing, Engagement, and Revenue

Non-fungible tokens (NFTs) have become one of the hottest trends in technology, art, and digital culture over the past couple of years. For the uninitiated, NFTs are unique blockchain-based digital assets that represent ownership of digital content like art, music, videos, tweets, memes, and more.
Unlike cryptocurrencies, NFTs are not interchangeable or fungible. Each NFT token represents something singular and unique. This attribute makes them ideal for certifying scarce digital goods.
The NFT market exploded in 2021, with over $41 billion in trading volume. High-profile NFT art sales like Beeple's $69 million Christie's auction grabbed headlines. But NFT use cases span far beyond digital art collectibles.
Brands and businesses across industries are exploring how NFT technology can transform digital engagement, communities, and business models. As culture shifts further towards digital lifestyles and ownership, NFTs present vast opportunities for brands to shape their future.
This in-depth guide examines the emerging business of NFTs and how leading brands are leveraging non-fungible tokens across marketing, engagement, and revenue streams, including NFT Marketplace Development.

NFTs: The Next Frontier of Digital Ownership
To understand the opportunities NFTs create for brands, we must first examine why they provide such compelling digital ownership experiences for consumers and fans.
Scarcity and Value
Much of digital content's value has been degraded by infinite replicability. But NFTs introduce digital scarcity and verifiable ownership of one-of-a-kind assets. This inspires digital items with increased value as collectibles and status symbols.
Self-Expression and Identity
In virtual worlds and digital lives, NFTs enable more personalized self-expression. Just as clothing and accessories shape identity, unique digital goods become ways to shape virtual identities.
Social Signaling
Rare and exclusive NFTs become social signals that confer status both online and in real life. Owning certain NFTs gains access to communities and status.
Digital History and Lore
The blockchain records an NFT's origins and all subsequent transactions. This creates rich histories and lore around specific NFTs as they change hands over time.
Interoperability and Utility
With cross-platform standards, NFTs can integrate across various virtual worlds, from games to social media. And they can unlock utilities like special access and privileges across ecosystems.
Authenticity and Proof
NFTs verify authenticity and proof of ownership for digital goods. This provides lasting value to collectors and fans, knowing their digital items are legitimately unique.
For these reasons, NFTs create the kind of enduring digital value that brands can leverage for marketing and engagement.
Let's explore some leading examples of NFT Marketplace Development.

1. Marketing and Promotion Opportunities

NFTs enable brands to generate buzz, reach new audiences, and creatively promote products and campaigns:

• Brand Building Through NFT Art Drops

Commissioning and releasing unique NFT art is an emerging brand-building strategy. Luxury brand Balenciaga collaborated with artist Refik Anadol to create an NFT artwork auctioned at Christie's which visualized the brand's creative ethos. This generated press and reinforced their avant-garde position.
Taco Bell partnered with Reshape to auction off NFT taco-themed collectibles, propelling their brand into new conversations around digital art and culture. Brands like Charmin and Pringles have also created conceptual NFT art pieces that went viral. Art drops capture attention while showcasing creative brand identities.

• New Product Launches

Brands leverage NFT art and collectibles to generate interest around new product launches. Coca-Cola auctioned an NFT series to promote their Zero Sugar line, aligned with themes of New Generation Culture. BMW held an NFT sale unveiling a futuristic concept car. Such campaigns build intrigue and allow brands to flex their creative muscles.

• Targeted NFT Sponsorships

Crypto native brands like Crypto.com and FTX have sponsored NFT projects to reach their desired audience. But this tactic also works for mass brands. Purina sponsored an NFT collection featuring digital pets to engage pet owners. Brand sponsorships target niche communities.

• Airdrops for User Acquisition

Marketing-focused NFT projects distribute free tokenized art to build awareness and acquire users. Brands like Budweiser and Pizza Hut have capitalized by buying out entire editions to gift to fans and customers. Airdrops convert recipients into brand ambassadors who appreciate free NFT value.

• Social Contests and Activations

NFTs enable social contests and campaigns that incentivize user-generated content. Coca-Cola leveraged the hype by giving away branded NFTs for creating digital wardrobes featuring Coke. Contests and participatory campaigns foster organic brand engagement through NFT rewards.

As these examples showcase, NFTs open creative avenues to generate brand exposure, engage digitally savvy audiences, and spark viral conversations.

2. Building Communities and Relationships With NFT Utilities

Beyond marketing, NFTs' programmable utilities enable brands to build communities and strengthen relationships with fans and customers. Let's explore some cutting-edge examples.

• NFT Member Access Passes

Brands can issue NFTs as exclusive access passes, just like backstage passes at concerts. NFT ownership then unlocks privileges and immersive experiences. Adidas launched a set of NFTs that granted owners access to a private Discord server for brand events and product input.

• Experiential NFT Rewards

As metaverse worlds expand, NFTs will unlock diverse virtual experiences. For example, Budweiser auctioned off NFT trophies that enabled owners to tour 10 different breweries. Dream experiences create lasting affinity between fans and brands.

• Gamified Brand Engagement

Gamification mechanisms like points and status tiers promote ongoing brand engagement. Fashion label The Dematerialised incorporated NFTs into an interactive eco-conscious game, rewarding points were redeemable for access to limited-edition apparel. Adding gaming gives NFT utility.

• DAO Governance and Crowdsourcing

Through decentralized autonomous organizations (DAOs), brands can grant NFT holders governance over community-owned assets and decision-making power over initiatives. This engages fans and decentralizes aspects of the businesses. Fast food chain Wendy's is experimenting with a DAO.

• Metaverse Identity and Avatar Connections

As social and gaming metaverses evolve, branded NFT avatars, virtual clothing, and digital accessories offer identity, self-expression, and access. Nike's virtual sneakers grant owners access to exclusive virtual spaces, demonstrating the potential for branded experiences within NFT Marketplace Development. Brands become part of consumers' virtual lives.

What these examples indicate is that NFT ownership should meaningfully connect holders with brands, communities, and experiences. This cultivated loyalty and engagement long after the initial NFT hype.

 3. Unlocking New Revenue Streams and Business Models

For many brands, the greatest business potential of NFTs lies in unlocking new digital revenue streams:

• Primary and Secondary Sales

The most obvious model is to simply sell NFTs directly to customers as digital products and collectibles. Luxury brands like Gucci have sold NFT wearables for avatars. However, the value grows when brands incorporate secondary sales and royalties.

• Recurring Royalties

Smart contracts allow NFT creators to earn a percentage every time their NFT is resold. This creates ongoing revenue. Brands like Nike and Budweiser embed royalties into NFT sales, earning revenue perpetually through secondary trades.

• NFT Rental and Licensing

While NFTs confer ownership, brands can also rent them out temporarily. Fashion label The Fabricant earns revenue by renting its digital clothing NFTs to metaverse users. Brands could also license their NFT IP for third parties to develop experiences around.

• Experiential Services

As mentioned earlier, NFTs can unlock special access and experiences. These could include virtual events, in-person tours, or any other service. Brands can charge incremental fees for gated experiences tied to NFT ownership.

• Branded Marketplaces

To facilitate sales and transactions, brands can operate curated NFT marketplaces. This provides a hub for customers while also generating marketplace revenue through auctions, bids, and trading fees. Adidas plans to launch an NFT and metaverse marketplace.

• Fundraising and Investment

Brands leveraging an NFT community war chest model issue tokens that are appreciated based on the brand's financial performance. Holders collectively invest in the brand's growth. This raises capital while aligning incentives between a brand and its biggest supporters.

• Crowdfunding and Fan Financing

Similar to the community war chest model, brands could use NFTs to crowdfund specific initiatives where fans collectively finance causes and campaigns. This taps into passionate brand supporters to democratize fundraising.

• Gaming and Augmented Reality

Gaming, AR, and VR present additional NFT revenue models as these virtual worlds expand. Selling branded NFT upgrades, accessories, and experiences to metaverse users could emerge as a major market for brands. The opportunities remain wide and open-ended.
As we envision the next iteration of digital economies, brands have only begun scratching the surface of potential NFT-enabled business models. Those who move early will shape how the metaverse takes form and capture its many revenue streams.

 4. Key Strategic Considerations for Brands Exploring NFTs

Hopefully, the opportunities described above capture your imagination about how NFTs can transform digital brand experiences and business models! However, brands must also carefully consider best practices when approaching this emerging space:

• Has Your Brand Story Earned NFT Demand?

Don't force an NFT strategy without reason. The most compelling brands entering Web3 have fundamentally cultish communities that will embrace NFTs as the next chapter of their growth story. Start by assessing your tribe and relevance.

• Audit Your Technology Maturity

Although turnkey NFT solutions exist, deriving full value requires internal blockchain expertise. Brands must honestly assess their tech chops before plunging into complex decentralization. Start small and partner rather than overengineering offerings.

• Build Thoughtfully With Artists and Creators

Collaborating with artists, musicians, and creators allows more thoughtful NFT offerings with compelling backstories. Avoid crass generative cash grabs. Instead, carefully craft communities and episodic narratives over long campaigns.

• Focus on Unlocking Real Utility

At their core, NFTs should unlock utility and benefits embedded directly into each token's smart contract logic. Don't forget this foundation. Offer holders access, governance, and experiences that stretch their imaginations.

• Promote Sustainable Blockchain Adoption

The environmental impact of NFTs built on Ethereum raises legitimate criticisms. Brands must educate and steer communities toward more sustainable alternatives like Tezos, Polygon, and other eco-friendlier chains.

• Learn the Legal Landmines

Pressing legal uncertainties around IP rights, likeness permissions, securities laws and more require careful navigation. Seek qualified legal counsel to preempt brand missteps. This space remains the Wild West.

• Monitor the Regulatory Headwinds

Similarly, possible crypto regulation looms as a headwind brands must monitor closely. From taxation to copyright laws, regulation could significantly impact NFT business models. But appropriately governed, NFTs should flourish.

• Commit to the Long Term

Avoid short-term cash grabs. Carefully architect NFT ecosystems aimed at building lasting engagement and retention. Done right, NFTs deepen relationships between brands, creators, and communities for decades rather than weeks.

• Envision How Web3 Will Shape Your Brand Category

Zoom out beyond near-term NFT campaigns. How might your entire brand category be reshaped as the next generation of consumers inhabits digital and virtual worlds? Capture the first mover advantage in redefining your niche for the metaverse.

Own the Digital Future With Your NFT Marketplace

What becomes abundantly clear is that NFTs and blockchain technology will fundamentally transform how brands engage communities and conduct business. Much as social media ushered in the era of user-generated content and influencers, NFTs herald the shift towards user-owned digital economies.
Savvy brands have an opportunity to shape this next paradigm rather than react to it. Web3 offers new canvases and revenue streams. At their core, NFTs enable more direct and meaningful connections between brands, creators, and consumers.
But this requires a thoughtful approach that puts utility, artistry, and sustainability on equal footing with financial gains. Done right, it liberates creativity while bringing tangible value to fans.
The brands who jump into this new arena without cynical quick cash grab motivations will become the enduring institutions of Web3. They will own the medium, own the culture and ultimately own the future.

Bring Your NFT Vision to Life with an Expert Marketplace Partner

If you're ready to explore how NFTs can transform your brand's engagement and business models, don't go it alone. Partnering with an experienced NFT marketplace development company is the fastest way to turn your Web3 vision into reality.
Specialist teams like ours have launched some of the most successful branded NFT projects and marketplaces using blockchain technology. We seamlessly guide you through technical complexities while co-creating solutions tailored to your community's needs.

Our end-to-end services encompass:

• Custom NFT marketplace buildout and deployment
• Smart contract programming for utility and royalties
• Mobile/Web app development to showcase your NFTs
• Creative direction and community-building strategies
• Legal compliance, security audits, and testing

We live and breathe web3 development. Leverage our expertise to capture first-mover advantage and dominate your niche in the emerging metaverse. Contact the RWaltz team today to transform your brand's digital future with an NFT marketplace tailored for your fans!
The decentralized digital revolution has only just begun. Those who embrace its ethos with open creative arms are poised to rewire how brands bring meaning, community, and economic empowerment to the virtual worlds ahead.

This article is provided for informational purposes only and represents the author's own opinions based on current market observations. All information herein is believed to be accurate at the time of writing but readers should do their own research #DYOR and due diligence.