4 Things PR Pros Need to Know About NFTs
You’re not imagining it: Everyone seems to be talking about non-fungible tokens (NFTs) these days.
NFTs are an emerging technology within Web3 that is changing how we interact and communicate with brands and customers.
The NFT world of Bored Apes and CryptoPunks is moving into the mainstream this year, and it’s happening fast. Now is the time for PR professionals to figure out where they fit in the evolving NFT world.
The future of communication, content creation and digital brand ownership is here. Here are four things that PR pros need to know about NFTs and how to navigate the developing Web3 space.
Where NFTs live
To understand NFTs, we first need to understand blockchain — a part of Web3, which refers to a new iteration of the internet built on blockchain infrastructure.
Blockchain is a foundation for new technologies, businesses and a way of organizing people. It is a public, decentralized, record-keeping database used for all cryptocurrency transactions; every time a purchase is made, the transaction is recorded and made available to the public on the blockchain.
Blockchain is part of Web3, a decentralized digital space evolving what we currently know as Web 2.0 into a virtual space that will combine physical and digital lifestyles.
Web3 promises to safeguard what we value — information, truth and digital assets. There are three new layers of technological innovation in Web3: edge computing, decentralized data networks and artificial intelligence.
NFTs live on the blockchain, and they are more than just digital artwork. Hidden inside the artwork is a unique and noninterchangeable unit of data stored on a digital ledger using blockchain technology to establish proof of ownership.
How brands will own their data on Web3
Unlike Web 2.0, where outside entities own users’ data, Web3 will allow individuals to own their data and receive compensation for time spent and content created on the web.
The opportunity in Web3 for content creation is limitless. With the shift into this next iteration, PR pros can help clients build their digital platform for sharing the unique content they create. This process involves more than just building a website and uploading blog content — we have the opportunity to help brands build digital worlds where their audiences and fans can interact with the brands that they love.
Communicators can shape an audience’s experience when they enter a company-owned digital space, similar to creating a physical brand activation. Layering PR campaigns with physical and digital activations that intersect on a brand’s owned property is a great place to start thinking about what PR pros can do with Web3.
NFTs are an excellent example of owned content on Web3. An NFT that represents digital or physical artwork on a blockchain removes the need for the middleman and allows content creators to connect directly with their audiences.
For example, think about all the steps and outside resources it takes for a music artist to create, market and sell music. Now, imagine an artist creating and selling an NFT; that stored data is their new musical album.
People purchase the NFT, gain the music as a utility (and often gain additional benefits). The artist receives the share of compensation predetermined by the artist when they list the NFT for sale. NFT holders have exclusive community benefits such as lifetime access to new releases, unique singles, exclusive merchandise, etc., for as long as they hold the NFT.
If they sell the NFT, the NFT holder makes money, and the original content creator receives an additional royalty percentage as the value of the NFT fluctuates.
PR professionals need to understand the value that NFTs hold for content creators in Web3. NFTs are a way to expand constant communication to a brand’s audience on a more global scale.
How sales take place
There are four core reasons why someone might purchase an NFT:
1. Uniqueness or rarity — a limited number of NFTs are available for purchase, or there is a unique feature on the NFT
2. Physical utility — unique physical asset or service, e.g., VIP access to a festival or a lifetime discount code for merchandise
3. Community utility — access to exclusive communities with like-minded individuals
4. Previous ownership — who previously owned the NFT?
Of those four reasons, communicators can play a vital role in developing two of the reasons why someone might purchase an NFT.
Physical utility: A utility is a redeemable perk added as a benefit to an NFT. When a brand or company launches an NFT, the utilities that come with it need to be authentic to the brand’s mission, core values and purpose.
NFT utility is a space where PR pros can help brands create meaningful experiences for NFT owners. Understanding what utilities make sense for a brand will not only bring awareness to the actual NFT for increased value, but it will also create a unique customer experience that grows brand loyalty and ultimately creates its community within the brand exclusive to NFT owners.
Community utility: NFT developers are building communities that establish trust among users, providing long-term benefits, and creating opportunities for education and collaboration.
When someone owns an NFT, they gain access to this exclusive community built by the NFT developers. The NFT space is extremely community-driven, and many brands need help with building their online community and managing the community once it’s functional.
Think about this as an evolved role of a social media manager; the foundation for social engagement and content creation is there, but collaboration and engagement aren’t limited to likes, reactions and comments.
What we think of as traditional media placements may even evolve into content placed within these communities or brand representatives receiving an invitation to talk on a platform like Discord within their area of expertise.
The language of NFTs
The NFT space is unique and new; the key players have even created their own vocabulary to communicate and interact with their audience.
The lingo is ever-growing, and one way to learn and keep up with it is to start engaging in the space. To get started, here are a few key terms to know:
• AMA — “Ask Me Anything” are meetings from CEOs and project developers to community members, both private and public events, to share up-to-date developments and benefits to NFT community holders.
• ALPHA — Useful investment advice or updates from prominent investors, also called “whales.”
• Discord — This is a free chat app platform where most NFTs build their communities for announcements, giveaways, discount codes, project discussions, voting and building community that drives to their social media and product websites.
• WL — Also known as whitelist, this is the exclusive list to gain access to an NFT before it goes on sale. To gain access to a whitelist, you have to engage and help promote the brand, often by participating in activities to create social buzz. Consider this as the main event or presale of NFT before it becomes available to the public.
While the NFT and Web3 space may seem confusing at first, remember that this is a new and developing space for everyone. Now is the time to understand the basics. So, start slowly — get on Discord and join some communities to learn the basics, check out OpenSea and browse through NFTs, and take some time to set up your MetaMask.
Remember that not everyone is an expert in this space yet, and don’t be afraid to ask questions!