Why Marketers Should Care About NFTs
Some folks are missing the "aha" of what is going to happen in the future with NFTs.
Right now NFTs are representing as a blockchain-based version of traditional DRM in essence, and the only difference is that the blockchain allows us to verify "originals" in a way we have not before. So now, in the same way you can own the original of a print, you can own the "original" of anything made with ones and zeros.
And there's some excitement around that, deservedly so, and it makes sense.
But here's the thing: crypto assets are best thought of as "programmable money." If you could program money to do whatever you wanted, what would you program it with the ability to do? What nature would you give it? What purpose? What rules?
The many sh*tcoins out there each represent a different idea about what money can or should be. The ones that have staying power are the ones whose programming adds intrinsic value to that particular money in a sustainable way.
Through that lens, we can start to think of NFTs as "programmable ownership".
But, NFT's as we know them today are almost just replicating in the digital space the same idea and the same rules of ownership as we have in the physical world.
They add intrinsic value in a minor but important way — they make something previously ubiquitous (infinite) 100% discrete (finite). But there’s nothing new going on in that respect. That there’s only one of something has been making things expensive since forever. Most NFTs are a one trick pony, and a relatively uninventive one, at that.
A far more interesting story is what is going on with the platform Zora, where artists issuing NFTs get a commission on each subsequent transfer of ownership, every single time the NFT changes hands. Now, that’s interesting. This opens up a whole new world of possibilities.
Pretty soon artists and creatives are going to realize that the ownership model is part of the creative act, not separate. The only group out there that, at least that we have seen, has really caught onto this way of thinking of art as programmable ownership is Async Art.
On Async Art, digital art and soon music can be programmed interactively or split into layers. What if you could change the expression to match your mood on the Mona Lisa or own a rare version of a popular song that has your name in it?
Imagine that a music track cost $999 for the first listen, $998 for the second listen, $997 for the third listen, all the way down to zero at which point the thing became free to everyone. You can easily imagine Radiohead doing something like that, right?
Imagine that a piece of art could be purchased for $100 and self destructed unless it was transferred to someone else for $100 within 10 days. Or, imagine something that was free but self-destructed if it was not shared within 30 days.
These are sort of silly and yet semi-realistic examples. They illustrate the point that one doesn’t need to assume a fixed or traditional ownership model when designing and debuting NFTs.
And there, in the blink of an eye, is a revolution in marketing.
In the examples above, NFTs allow us to redefine what ownership is in the first place — of art, to start — but likely much more than art, long-term. What we marketers are selling as a result begins to transition from the fact of owning a thing, to the experience of owning a thing.
This is already true with things like BMWs and Snickers bars — the experience is the product, or most of it. But even then, the underlying ownership model remains traditional.
BMWs are a great example, actually. There are 3 ownership “programs” that are commonly accepted for vehicles: new ownership, used ownership, and renting (i.e. leasing). The notions of “certified pre-owned” and “European delivery” are the only innovations I can think of relating to BMWs, but both were indeed quite innovative in their time — and were highly impactful on Bimmer’s business.
Do I need a 4th or 5th ownership model for cars? I’d argue yes. What about co-ownership amongst a friend or peer group, for example?
When the very nature and rules of ownership change, what we are marketing changes, as does how we market.
Importantly, things don’t have to be (or have) an NFT in order to create a new ownership model. In fact, I think that while NFTs will expand our collective idea about what ownership really is, the cambrian explosion of change we’ll see as a result will rest largely outside of the NFT sphere in a formal sense.
And that gets us to a second, equally important change that marketers need to grok.
Kickstarter and Indiegogo have, in a sense, popularized a new ownership model over the last decade via an ordering mechanism called the “pre-sale.” In a pre-sale, one exposes one’s capital to risk in the form of a pre-purchase in order to access any of a variety of marketed rewards (low price, special access, limited edition memorabilia, a simple note of thanks and public recognition).
The risk of course is that the product you pre-purchase may in fact never be made. Pre-sales are a form of loan where trust is the collateral, and what is owned is an IOU.
Trust doesn’t make for very good collateral unfortunately, but I think pre-sales work nonetheless, and on crowdfunding sites in particular, because what’s really going on is that folks are using their money to vote for the way they want the world to be.
Few truly care about losing their trust, or losing their money, on those sites. The whole exercise is instead about building a shot at the future we want, a future in which these kinds of products exist, and these kinds of makers are successful.
Anyway, this relates to NFTs because pre-sales in many ways have marketing mechanics baked into the very fabric of their ownership model.
Ownership has almost never been viral before (or “not viral”, for that matter). Co-ownership has almost never been more valuable than sole ownership. Ownership is not inherently social. Products may be social. But what if the process and experience of owning things was too?
Taking marketing into account, and even deeply integrating it into your protocol when designing and debuting new ownership models via NFTs or otherwise, is going to be something we all get familiar with over the next few years.
More importantly, "ownership modality" is now a feature and potentially a differentiator that needs to be conceived of and expressed clearly by marketers. The idea that the nature of ownership has its own corresponding value proposition(s) mandates that marketers be able to explain this value well.
I also argue that NFTs are an expression of hope — for some that we can reshape ownership into something that does less damage to the modern social fabric — and for others, hope perhaps, that second and third order positive effects on human creativity will help artists and artistry flourish long-term. Have we finally stumbled upon a way to get creators paid commensurate with the value they add to society?
Hopefully, all the resultant marketing (much of it likely bad or worse — mediocre!) won’t ruin the NFT party before it really gets started. All those sh*tcoins didn’t kill crypto, so I’m optimistic.
But as my friend and Nautilus magazine co-owner Alexander Falk would say, “of course, maybe I’m dead wrong. Just my 0.0000126114 ETH.”
Have a great weekend, y’all.
Special thanks to Rob Hogan, Kevin LaHaise, Risa Fielder, and Alexander Falk for helping shape my thinking on this.
At my firm JDI, we make precedent-setting science companies well known and understood. Learn more at: www.jones-dilworth.com