The rise of Non-Functional Tokens (NFTs) has created a new frontier for brands looking to reach consumers in a more meaningful way. But as more and more brands enter this space, many are finding that what they committed to actually requires a methodical, continuous effort and commitment that escalates with each milestone. Basically, brands find themselves in a type of “Ponzi scheme” for which their marketing teams are not equipped. Here’s why.
The challenge stems from two things:
- Many users claim “utility” from NFTs, but what they really mean is “fun” (which is the basic form of the tool).
- Blockchains haven’t matured enough—nor have dApps built on top of them—to deliver enough variety of tools or basic entertainment to meet users’ lofty expectations and keep them engaged for the long term.
If brands are unable to provide enough entertainment, users will be disaffected and the NFT initiative will fizzle out from a drop in momentum.
At the same time, to meet the high demands of users, brands are forced to pour more and more resources into the NFT space. This is unsustainable in the medium to long term.
There must be many cooks in the kitchen
When the topic of NFT comes up internally for any global brand, the question arises: Who owns it? I don’t mean NFT, I mean who is responsible for managing the NFT part of the business? Suddenly everyone is looking at Marketing because Marketing has the ability to create engaging content to connect with users. And what else should they be classified as NFTs, other than a new way to engage loyal users?
There are several problems with this logic. Here is the revolving door of stakeholders that are ultimately drawn into this discussion:
- NFTs are sold by the brand and marketing teams don’t drive sales – enter the sales team or “Chief Revenue Officer”.
- NFTs inevitably involve brand intellectual property. Marketing teams typically don’t handle IP matters independently, as the legal team usually does.
- NFTs have a strong social/community component. Purely marketing teams include some of this functionality, but often don’t fully own it. This is where the communications team and/or social team come into play.
- NFTs have an ongoing product component, and marketing teams are typically not involved in product development entirely (or at all). This is where the product team is needed.
Here’s what it boils down to. When a global brand enters the NFT space, it commits to unlimited engagement with NFT holders because those same holders expect special access/content etc. It means that brands have to become service providers for those users. In fact, these brands must become active producers of (at a minimum) entertainment for NFT holders.
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Marketing teams at large corporations (even if they had full ownership of NFT initiatives) are not equipped to just provide loads of entertainment to users. It is a mistake to assume that users will be sufficiently entertained by collecting NFTs – derived from the lack of an IP mark – and that the mark itself will require minimal effort after this initial “monetization”. This mindset typically means treating an NFT initiative like a short-term ad campaign owned by a marketing team, neglecting the very serious (and complex) architecture and product requirements needed for true long-term NFT engagement.
Treating NFT declines with this short-term approach ultimately fails because creating marketing assets for users is a complex process that requires a great deal of planning, design and execution. From a marketer’s perspective, it is essential to have a deep understanding of user demographics as well as a thorough understanding of brand values and messaging. This requires a significant amount of market, user and design research.
The production process also requires extensive coordination between different departments, such as design, development and copywriting, to ensure that all elements are aligned with the brand’s message and goals. In addition, the production process often involves elaborate (and expensive) design requirements, such as creating high-quality visual assets, video production and animation, as well as ensuring that the final product is optimized for different devices and platforms. All of this complexity makes it difficult to scale and leverage marketing assets to complement the utility or entertainment that NFT holders want.
The only way brands can provide enough entertainment through NFTs is to create common online areas where NFT holders can interact and have fun with each other. This way, engagement can be scaled without overloading the brand. Gaming is an ideal platform for this because it is the richest form of community entertainment. By harnessing the power of gamification, brands can create immersive and engaging experiences that adapt to audiences and keep users coming back for more.
Many brands still enter the market hoping for a quick profit. But without a solid plan to engage users, they quickly find themselves overstretching their resources and overwhelming their users.
The key takeaway is that brands need to think carefully about how they manage user expectations while scaling the utility and entertainment needed to keep them interested. If they want to succeed, they need to focus on creating shared online spaces where users can interact and have fun. Gaming is an ideal platform for this and could help brands scale their engagement efforts in a sustainable way.
By focusing on community entertainment, brands can create engaging experiences that keep users coming back for more, while avoiding the pitfalls of an “engagement Ponzi scheme.”
Mark Soares is the founder Blokhaus Incmarketing and communication agency in the Web3 and Blockchain categories.
This article was published via the Cointelegraph Innovation Circle, a trusted organization of blockchain technology industry leaders and experts who are building the future through the power of connection, collaboration and thought leadership. The views expressed do not necessarily reflect those of Cointelegraph.
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