Are brands ready to jump on the NFT bandwagon? What are brands like Coca-Cola, Taco Bell, Gucci and McDonalds doing? Is this something for brands of all shapes and sizes? Are NFTs only for art collectors or are there a wide range of other purposes?
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Recorded on January 26, 2022.
Brad Breininger: 0:00
Hi everyone, and welcome to this week’s Everything is Brand. This week we want to expand on a topic that we brought up during our 2022 outlook. And that is NFTs. And based on the last week in cryptocurrency, we’ll probably talk about that too. Stay tuned Alright, so over the last week or two, cryptocurrency has taken a little bit of a nosedive. So there’s been a lot of volatility in the market around crypto, but NFTs seemed to be stronger than anything. So for anyone who’s listening, who, at this point doesn’t know what NFT is – we’re talking about a non fungible token. And it’s basically taking an element, and it could be any element (but a lot of the times right now, it’s either a video or a picture or a piece of artwork) that has code embedded to it so it can sit on the blockchain. And I know that I may sound like I’m speaking a foreign language. But that’s the basic idea. And if you Google it, you can get a lot more information on it. But between cryptocurrency and NFT’s brands really have to start thinking about what their role is in using both of these areas. So let’s start by addressing kind of the crypto crash. Let’s call it what do you guys think? Do you think that this is a one time event? Do you think that this is just the volatility of crypto, what are your thoughts?
Christian Rosenthal | ZYNC: 1:30
I think that’s what you’re exposed to when you’re looking at these types of markets, right? Anything can happen around us that can trigger these types of crashes. It’s the same thing when you’re investing any type of auctions or anything else, like in a company or something if something around, it happens – it can trigger really deep crash, right? Yeah. And fortunately, it’s apparently it’s coming up again.
Brad Breininger: 2:01
It’s interesting, because I guess I’m thinking that from a brand perspective, this volatility might seem a little scary to some brands to kind of wade into this area. And, you know, obviously, there’s volatility in cryptocurrency, but for a lot of folks, NFT’s are kind of related to that. So there may be a little bit of weariness on that side as well. What would you tell brands that are weary of this whole digital revolution? Let’s call it
Christian Rosenthal | ZYNC: 2:28
I think the first thing that I would tell them is that NFT’s, are kinda like one of a kind trading card. Right? So that’s what makes them so appealing. People and FOMO, the fear of missing out, go out and start getting these “drops”, as they call them. Because they don’t want to be left without them. Right. So that’s something brands need to take into consideration. I mean, depending on what the drop is, it can be sold from between, I don’t know $30 to $600,000. Like, for example, the the flying cat meme that was sold, it was sold over $600,000. And it was just a meme, right?
Brad Breininger: 3:21
Yeah. Wasn’t there a piece of artwork that sold for like, 10s of millions of dollars, I think it was, you know, a huge NFT. And, you know, when you’re talking about the art world, that just drives the prices up even more. You know, it’s interesting, I read an article about this young girl who created these various artworks, and she made a million dollars in like 10 hours sending – selling these, these NFT’s online. And I mean, that’s just crazy money, she was 15 years old. So I think, you know, brands really need to pay attention to kind of what’s going on out there to figure out where they sit, kind of in the ecosystem of what this could look like. I think that Christian, you brought up a really good point, which is this idea of unique trading cards. The advantage that I’ve heard about NFT’s is that they have this unique code embedded in them, which means that you can always position them back to where they were created, who created them when they were first bought. So there’s almost like this embedded history. A lot of times with art or trading cards, a lot of time and energy is spent in validating. So the great thing about NFT’s is that they almost become pre validated and they continue to stay validated throughout their lifetime.
Christian Rosenthal | ZYNC: 4:38
Yeah, and that’s the reason that big brands are already spending money on NFT’s and brands like Coca Cola, brands like McDonald’s, brands like Mattel or Taco Bell. They’ve already started right.
Gabi Gomes: 4:53
So I see it as an even more exclusive community. That’s the opportunity for brands essentially. So while you know your email list and your membership to your particular brand may be a community already, this allows you to have an even more exclusive community, whether that will grow, etc. But so far, what I’m finding is that there’s a component of an artist in there or originality making it very unique, very exclusive. And, as a result, very valuable in that sense. So I mean, there are opportunities, where there’s brands that have taken some contesting approaches to giving an NFT, some of them are tied even with actual physical items as well that you get, but at the end of the day, it’s a digital asset that you keep. And yes, like, I’m starting to see a lot of partnerships with artists, we’re talking about digital artists, music artists, anybody that’s producing exclusive content partnered up with that brand.
Brad Breininger: 6:03
And I think one of the other big opportunities that brands have is to not necessarily just look at all the old traditional ways of marketing, maybe there’s some new ideas, maybe there’s some new creativity using this sort of technology that they can start to explore. And it’s not just about, you know, as with any new technology, it’s not just about retrofitting it to what we’ve always done or the way we’ve always done it, but thinking about, you know, what could be different? How could we do this in a way that’s completely different or very different from anything we’ve ever done before?Which can be scary for brands, I’m sure –
Jeremy Linskill: 6:38
But I think there’s a lot of value in being first to market, right? Like, I think that that’s a huge opportunity. And all of this, and I mean, we’re seeing it with the larger brands right now that have gotten on board, they’re getting their name out there, you know, you’re reading articles about – they’re everywhere, because they’re getting in first. And I agree it is a little bit scary. It’s a little bit intimidating. It’s a little bit like I don’t know, what’s involved whether you need cryptocurrency, you need a wallet, you need all these digital assets now, but from what I’m reading it once you get into it, it seems pretty straightforward and simple. You just need to understand the energy that it takes to get involved. And it looks like there’s a huge amount of opportunities as well, like. So I mean, we’re talking about the digital trading card, per se, but from what I’m reading, you can unlock events, like physical events, you can be part of exclusive clubs. I think I even read something somewhere where somebody bought some sort of NFT that was like an outfit or a jacket that could be worn in a digital, you know Metaverse kind of thing as well. So, yeah, to that point, there’s a huge opportunity here. I guess. It’s just kind of figuring out what makes sense. And where I think right now, you know, I went on that website Rareable I think it’s called or something and it’s just everybody in anybody is putting out NFT’s right now. It’s almost like an influencer on tik tok, which ones are going to take off, who are going to be the most popular artists, NFT artists out there, people are just going to randomly buy people and hope that they’re the ones that kind of take off and are valued higher than the others, right? Like the Banksy of the NFT world kind of thing. I think so
Brad Breininger: 8:18
Well, to your point, Jeremy, it’s no different than the art world or the event world or the music world, people have to want it. I mean, you know, brands or organizations can put out whatever they want. But it has to also be desirable. So there’s, there’s a role for making sure that you build engagement. So it’s interesting because it brings us full circle back around to brand, you know, brand is not going to go away brand is not just making sure that people know about whatever your product or service or NFT might be. It’s also about creating that engagement, creating that desire, creating all of those elements that draw people in and making sure that this is something that they want. And to your point, I think that what will happen as NFT’s Evolve is that organizations and artists and brands will start to realize what it is that their audiences want and things will start to turn and adjust and evolve. Because right now it feels a little bit like it’s a bunch of memes and things that are being sold like I think Charlie Bit My Finger sold as an NFT, a little blonde side eyed girl she sold as an NFT as well. So I think that there’s things that are being drawn from our culture that already exist. But then there’s also these opportunities to create from scratch too
Sasha Codrington: 9:38
I found a really interesting example it kind of touches on a couple of those things – Jeremy mentioning first to market there was an artist Mason Rothschild and he created these 3D renderings of the Hermes Birkin bag. So that’s something that’s very exclusive, very desirable, very expensive. And this artist started creating digital versions of it with faux fur textures, interesting colors. He made 100 of them and some of them have sold for up to $40,000. And of course, Hermes has had an issue with this because he’s essentially selling a key brand piece of theirs, the look and feel of it and profiting off of it in a huge way. So he’s since received a cease and desist, there’s been legal action against him. And there isn’t a lot of existing background legally in terms of what this looks like, what does it mean? And his argument is that it’s art. And it’s very similar to let’s say, Andy Warhol, the Campbell’s Soup, that was something that Campbell’s Soup actually was happy about, and sent him gifts of tomato soup to thank him because it was brand awareness for them. But in this case, in the NFT world, because of the – the huge profit, I think brands have to be on top of it, know what is related to their brand in the market, and what is the legality there in terms of protecting themselves as well.
Brad Breininger: 11:03
But Sasha, I mean, that’s an amazing point. And that is like is Birkin or Hermes, are they being short sighted here. I mean, even if the guy makes two or 300 grand off of these NFT’s. If this is building non paid PR or creating buzz, I mean, they really only have to sell a few Birkin bags to get that money back. So are they looking at this in the wrong way? Do brands really need to start thinking bigger or differently than they have in the past and, and really understand almost like let’s call it the Campbell Warhol connection, right? About this idea of brand building outside of what they would normally consider brand.
Sasha Codrington: 11:47
It’s definitely interesting in this particular case, because like Jeremy said, it’s towards the beginning of NFT’s it’s received a ton of PR, different media around it. I don’t know if that would change down the line as the market gets more saturated. But I think the problem that Hermes is having particularly is that their entire brand is built on exclusivity, they only release a certain number of Birkin bags, you have to get invited to purchase one. And so they’ve already been leveraging that kind of NFT mentality of a limited number, very exclusive. And so this person creating many of them online might be cutting into their strategy there as well.
Gabi Gomes: 12:24
Why not partner with them? Why not partner with the artist? That’s where I see a lot of, and I think we’ve mentioned this before in a previous podcast in terms of brands, partnering with other brands, or artists, etc. And I think the NFT world is really the one the place to do that you get the artist who does exclusive work plus the brand tie in like it’s a win win rather than competing, right.
Jeremy Linskill: 12:51
But I think that the essence of this is they didn’t ask right? He just – he just did.
Gabi Gomes: 12:56
Okay, but Right, they could have gone about it a different way.
Jeremy Linskill: 13:00
Maybe. I mean, I don’t think what he did was wrong. I mean, it’s so new. But I think that looking back, and going forward, I think that that’s the discussion that needs to be had between brands and artists or whatever we’re talking about, right? There’s going to have to start to be promartions, promartions, – promotions, that are shared or partnerships, right as well. So it’s figuring all that out. And there’s a huge market for that if you know a brand coming out and hiring a bunch of different artists to do different interpretations of the Birkin bag or whatever, going forward, and having different releases and things like that. But it’s going to be crazy down the road, there’s going to be so much noise, there’s going to be so much data that there’s so many of these NFT’s. I don’t know how this is all going to work out down the road. It’s just – it’s interesting.
Brad Breininger: 13:46
Look at Amazon, for example, Amazon as a sales marketplace, there’s hundreds of 1000s of products on Amazon, I almost see NFT’s kind of going down that road, maybe there will be a marketplace where you can purchase and sell and NFTs. And there will be hundreds of 1000s of them. But again, it will come down to messaging, branding, desirability, engagement, all of those things that at the end of all of it, this is yet another way to distribute something. But we’re still dealing with human beings and human beings operate in a certain way. They have to want it, they have to desire it, it has to be something that they engage with. And I think if you had gone back in time and said to someone, let’s say in the I don’t know, the 50s or 60s or 70s when department stores were at their heyday, and if you said okay, there’s gonna end up being this department store that has hundreds of 1000s of products and people can just kind of choose whichever ones they want. They would have said, Oh, that will never work. We need to limit the amount of products because people can’t make a choice. I think the issue is that things evolve. And to your point Sasha, with Birkin. They may have a strategy but if they’re not innovating someone else will come along and innovate for them. And I think it’s true in any industry, for any brand, for any organization that if you don’t innovate, someone will come along and innovate for you.
Gabi Gomes: 15:12
That already exists it’s called Opensea for marketplace for NFT’s right?
Brad Breininger: 15:18
But it’s not known to the general public the way Amazon is that that’s more what I meant to it’s not like where everybody and their brother knows to go to Opensea to buy an NFT, right?
Christian Rosenthal | ZYNC: 15:29
Going back to brands, it’s crucial for brands to really think about the approach if they’re willing to jump on this bandwagon. I have two examples, clear examples. One – and I think I mentioned this on the last podcast was Ubisoft. So they started to Jeremy’s point they started selling cosmetics for one of their games as NFT’s so that only the person that purchased had it, they had a huge backlash, right? Because they were seen as greedy. They were seen as only trying to make more money out of it. But there are other brands, like for example, Taco Bell, Gucci, even – they are generating NFT’s but they are donating the proceeds to I don’t know, scholarships, or health funds, those sorts of things. That’s the way they approach what’s important, right.
Gabi Gomes: 16:25
I also think like I came across a couple of other examples too Wayne Gretzky, for example. Wayne Gretzky, has been out of hockey for I don’t know how many years, but yet, he’s got a plethora of NFT’s out there, whether it be his signature, whether it be his stance at a particular game, in a digital art form, whether it be some card that he has, there are so many iterations of NFT’s that he has, even to the point of getting an NFT for the next drop. It’s literally one on top of the other, but it taps into that whole memorabilia market. Right? And how do you take one thing and extrapolate it? But then you’ve got other companies you mentioned, it is about creating a community it is about creating something of a greater good and sharing it you know, Clinique had an NFT, basically, where they gave – it was contesting and NFT – with positive messages, etc, etc. So we’ve always said this before, I think with any new platform, whether it be social, whether it be crypto assets, etc. I think brands need to be aware about it, they need to dabble in it, to see if there is an appetite for it. But at the end of the day, what we come back to it is that at the moment right now it is a very exclusive community. So as an exclusive community, what can you offer the end user that is unique and exclusive?
Brad Breininger: 18:00
Yeah, it really comes down to this Gabi, which is something that you just said is that there will end up being a lot of stuff out there that won’t be as desired as it is right now, a great example of that is you can go to garage sales, or thrift shops now and find a ton of those plaques with all those inspirational sayings, you know, when those were really popular for a while. And so what happens is, is that we kind of hit these trends and everybody gets on the bandwagon, everybody does a bunch of stuff. And then some of it goes into the thrift shop bin at some point. I imagine that there will be an NFT thrift shop at some point in history. However, like anything else, the cream will rise to the top and there will be really strong elements that are an important part of moving forward. You know, you brought up a really good point about Wayne Gretzky Gabi, Wayne Gretzky is one of those people who goes beyond just a moment in time celebrity, he’s more of a timeless kind of celebrity. And I was reading this really interesting article about celebrities like that, like Prince, or, you know, Wayne Gretzky, or even Elvis Presley, where what’s happening now is that they’re heirs in their estates actually have to map out a plan for what their persona and what their idea will be going forward. And the digital realm is a huge part of that, whether it’s NFT’s of unreleased music or NFT’s of snippets of their conversations, or whatever it might be. I think that what crypto and NFT’s in the whole digital progression is leading us to is that, in a way, it’s making some of these people immortal, so their legacy will go on and on. If you look at Elvis Presley take Elvis Presley for example. When he died, he was practically penniless and Priscilla Presley turned his legacy into a multi hundreds of millions of dollar estate, based on some of the same principles that you’re talking about with Gretzky there. So I think that NFTs are not just about a single moment in time, I think this is about figuring out what the long term play will be for, for celebrities, for products, for art, for audio, for video, all of these things.
Sasha Codrington: 20:22
The only thing I’d add is, in my research, it really does come to monetizing items, whether it’s something new that you’re creating for an NFT, or something old. The example that you gave of the artist who made millions of dollars, that’s Beeple, he’s a 3D artist who’s created artworks every day for years, something that he’s just posted on social media. And he took what he calls his Everydays, the first 5000 days. And he put it together into one large image, just a collage kind of image – he sold that for $69 million dollars. And that’s something that he had never intended to sell as an NFT. It was something that he was doing as personal work, that he was doing for his own portfolio, essentially, for years. And it was something that he was able to monetize in a huge way. And that’s something that a lot of people have been able to do like the memes that you’re talking about. Those weren’t specifically NFTs. And I think that’s possible for brands as well, it doesn’t have to be something that is completely out of the box completely new. There are in a lot of cases, assets that already exist, whether it be a video, an image, all these kinds of things. And another brand that I saw did something interesting – they did that partnership, Paper Magazine, they did a cover which had Pete Davidson as kind of a Barbie doll almost. And they have their break the internet copyright and they took a collaboration where they remade that cover kind of the same composition, the same look. But using the Bored Ape Yacht Club, the little monkey head on it, and they’re selling those as NFT’s. So that’s a partnership where they took something that they already had, they put a little bit of a spin on it with a partnership. And then on top of that they’re offering exclusive access to unknown things. For them, you just buy the NFT, and you’re going to receive something, but they won’t tell you what yet. It’s completely exclusive, it has that kind of mystery item impact to it. And it’s really interesting to me, because I haven’t quite wrapped my head around the utility of it yet. Like I’m a consumer who, let’s say purchases clothes to wear them, purchases items for my house to enjoy them. And I haven’t quite figured out how NFT’s fit for me, I can understand these kind of additional add ons, like let’s say if you buy a coat in NFT and then you get it in person as well, or you get exclusive access to events. I can understand that. But I think there’s a little bit of a gap for consumers and brands to understand what’s the utility for their customer. And it might not be the same customer that’s going into the McDonald’s store who’s gonna go and buy a McDonald’s NFT. So there’s maybe a little bit of a gap that will close there over time, but understanding the utility, the audience, I think that’s something that will kind of develop over time for different brands.
Brad Breininger: 23:16
Yeah, and I think that if you consider the fact that a lot of people buy like Yeezys, right, like every time those are put out and they don’t wear them, they just sit on display. Right. So again, I think that there’s this whole market, Sasha, outside of utilitarian purchasing, what’s collector purchasing, it’s exclusivity purchasing, it’s dropped purchasing, I think that all of those things feed into what potentially brands could consider when they you know, look at these NFT’s. I mean, there’s a lot of things that are already happening and already going on. Because at the end of the day, as I said at the very beginning, NFT’s aren’t necessarily a new way of doing things. They’re just a new way of distributing things, right. So it’s about giving it that validity, it’s about giving that digital code. But you’re right, they can use things that they’ve already had. And that becomes a huge part of it.
Gabi Gomes: 24:08
And let’s be honest, our footprint is getting smaller and smaller. Real Estate, especially in this city ain’t going down, it’s going up. So we don’t have the spaces to collect all these shoes, fashion items, art pieces, et cetera, et cetera, et cetera. So the fact that you can just digitally store it is definitely the way of the future and attractable. On the point of like, using stuff that you already have. A great example that I found was the Associated Press, basically having NFT’s of their news agency photos, that was fantastic, and the proceeds of those so you ended up getting the photo, the time, the date, the location, the equipment and all the technical specs of those photos, but all of the proceeds go back to funding the Associate Press, right. So that’s a winwin but yeah, real estate is not getting any cheaper. And if we want to hold all these art pieces and whatnot, digital portfolio platform is the way to go.
Brad Breininger: 25:10
Yeah, I think at the end of all of this, it’s really about understanding what the potential is. And if you’re a brand or an organization, you have to ask yourself several questions. Number one is, Do I have any assets that I could redistribute or reuse in this format? So that’s question number one. Question number two is, what do I want to do with the proceeds? Do I want to increase my profits? Do I want to help out charity? Do I want to fund my business? What is it that I’m actually trying to do and making sure that that’s really key. Number three is how can I be creative with this? How can I engage audiences using this technology in a way that even though it’s volatile, even though it feels like cryptocurrency goes up and down like crazy, and maybe NFT’s will be the same – Maybe there’s some way to kind of delve into that volatility and find my brand’s place in all of that. And then the last question is, how do I do it? So is that a partnership? Is that reaching out to an artist? Is it reaching out to a technology expert to really understand how NFTs can be an integral part of how you’re going to delve into the future? But I think if you just put your head in the sand like with anything else, if you just put your head in the sand and say, Oh, well, this is just, I just don’t get this or this isn’t right for my business. I think that you are going to be left behind. And I think brands need to start asking themselves that question and starting to consider where NFT’s fit in their overall business marketing branding, wherever they fit the best. So that’s this week of Everything is Brand. Join us next week where we’ll talk about another topic. And remember, Everything is Brand.