Interest in NFTs on the rise – but marketers should be cautious

Originally shared by Anna McDonald on Mumbrella, 24.2.22

Interest in non-fungible tokens (NFTs) are on the rise, according to data from both Semrush and Streem, however, marketers should take into consideration some caveats before involving NFTs in their campaigns.

In the broadest terms, an NFT is a unique piece of data stored on the blockchain. One of the most common uses of NFTs are as digital receipts of asset ownership, such as jpegs. NFTs are not the same thing as cryptocurrency, although both are stored on the blockchain. The blockchain is a public, digital ledger that, in order to be updated, complex mathematical problems need to be solved, called “mining”. For those interested in a more detailed explanation, The Verge has a breakdown of the terms.

Data from Semrush shows that interest by Australians in NFTs is on the rise, as can be seen below for the period of January 2021 to December 2021.

There is a noticeable rise in October 2021, when Facebook rebranded to Meta, marking the brand’s pivot towards the Metaverse. Briefly, the Metaverse is an immersive, virtual world. NFTs and the Metaverse are two separate things, although they are both spoken about when it comes to Web3, which is the proposed next phase of the Internet. Blockchain is the technology underpinning most of the developments in the space.

Futrther, website visits from Australia to OpenSea, one of the largest NFT marketplaces, was up 4076.6% from January 2021 to January 2022, with the latter month having 1, 388, 714 website visits according to Semrush.

This growth is mirrored in the keyword searches related to NFTs.

Although NFT marketplace was the keyword with the highest growth, “what is NFT” and “NFT meaning” is second and third.

Hardhat co-founder Dan Monheit told Mumbrella over email: “As a general rule, we’re not good with intangible, abstract concepts and are wired to favour the path of least resistance (to conserve our precious mental energy). Purchasing an NFT today flies in the face of all of this. For the uninitiated (ie the vast majority of people) it’s abstract, complicated and requires considerable effort.

“To date, most people involved with NFTs have had huge incentives to do so (eg the promise of untold riches or the thrill of being a super early adopter), which makes charging through the barriers more likely.

“To go mainstream, the incentives will need to become more obvious, more widespread (ie less speculative) and the process will need to become much easier — otherwise, why would the average punter get involved?”

This trend upwards of NFTs is also mirrored in data from Streem for mentions in the Australian media.

Streem data also further reveals the most associated phrases with NFTs, as seen below.

The top three topics could be seen as positive, significantly the art and the growth aspect behind NFTs.

However, the third to sixth phrases show concerns about NFTs that are prevalent: their security or insecurity, environmental concerns and whether or not they’re a trend that will go away.

On these concerns, Monheit said: “There are plenty of reasons for marketers to be wary including money laundering, scams, environmental issues and the like, but the biggest reason to be wary is that it’s unlikely to have any benefit for 99.9% of brands out there and there are literally a million other things that marketers would be better off focusing on.”

Monheit continued: “We’ve already seen brands like the NBA and Nike dip their toes in the NFT pool with a highly receptive audience. In the worlds of art and sport it’s a small leap, but I think it’s hard (and dangerous) to extrapolate that to the worlds of health insurance, pancake mix and tea bags.

“It’s been my observation over the years that the best new technologies rarely create new behaviours. Instead, they take existing behaviours and make them quicker, easier, more fun or more social. For hot brands with audiences who are already into collecting there’s a lot of promise. For everyone else there’s plenty of other things to stay focused on.”