Will NFTs gain real currency in adland?

It’s 2022. You can now (legally) own Madonna’s vagina (main picture); Ezra Miller regularly films himself getting assaulted in Hawaiian bars, and buckle up, Tracey Emin, because Paris Hilton is selling art with a price tag of $1.1m, all in the name of NFTs (aka, non-fungible tokens). 

In a world where Jimmy Fallon proudly justifies spending $216,000 on a computer-generated doodle of an anthropomorphised monkey, because, like the ape, he also wears striped shirts, many people are quietly muttering: have we finally lost the plot?

Celebrities generating cringe-worthy headlines, quite rightly, undermines what NFTs have been brought on this earth to do. Forget Ellen Degeneres’ “Woman with stick cat” or Jack “just setting up my twttr” Dorsey. What really is the point of NFTs for adland? 

With a thud of the auctioneer’s gavel at Christie’s, NFTs were hammered into the collective vernacular in March last year, when one such work of art was sold for $69m. Beeple’s Everydays: the First 5000 Days (pictured above) was bought by Vignesh Sundaresan, the man behind several crypto start-ups, and comprised a digital file (plus some vague rights to present the image). 

It became clear that NFT art could no longer be ignored. Since then, a lot of the hype has been generated by its association with digital art, as people have paid large sums for pixels that promise a massive return on investment, without having an inherent value. 

The Mike Winklemann (aka Beeple) piece had a starting price of only $100, but Sundaresan’s purchase triggered a media frenzy, boosting both NFTs’ reputation and subsequently his own crypto investment scheme.

NFTs' ups and downs

However, according to Dickon Laws, global head of innovation at Ogilvy Experience: “The current narrative is that digital art pieces are falling out of the market.” He points to the recent resale of Jack Dorsey’s first-ever tweet. After likening the digital asset to Leonardo da Vinci’s Mona Lisa, its owner, Sina Estavi, was left red-faced when the highest bid lodged was $6,200 – a mere 0.2% of the original $2.8m asking price.

“This is where the negativity is coming from,” Law insists. His job is to figure out how brands can break new ground on emerging behaviour and guard them against the “faddy hype curve”. Despite the bad press, he says he is confident NFTs are here to stay, but wants people to stop using the term.

It’s a sentiment shared by Zoe Scaman, founder of Bodacious, who points to “shitty use cases and ‘to the moon’ cash grabs” elevating NFTs to the status of “fad”. 

“But underneath all of that, there are some interesting ideas and innovative pieces. That’s what gets me excited about what’s to come,” she adds. “Hopefully soon we’ll lose the term ‘NFT’ and just start referring to them as what they are – digital fashion, virtual make-up, gaming skin, access key and much more.” 

On a basic conceptual level, the definition of NFTs is often misconstrued. NFTs are not the artwork itself, but the smart contract that lives on the blockchain. Using the same platforms that support cryptocurrencies such as Ethereum, the tech acts like a ledger charting the exchange of digital “stuff” and can be programmed to do different things. This might include providing people with loyalty schemes, exclusive access to content or helping them enter a building. You can even “breed” them when merged together. 

Remember the beer drinking app everyone had when the iPhone 1 came out? Law says we’re only at that equivalent point in the evolution of NFTs. “‘Uptappd’ was completely useless, but entertaining,” he says. “That’s what we’re using NFTs for. It’s a really smart piece of technology, but we’re utilising it for ridiculous stuff.”

Laws insists we need to get to a point, one similar to where apps are now, where we don’t talk about NFTs as an entity but rather what they do, so that the technology just disappears into the background. But he admits we are at least two years away from that place.

People love to scoff publicly. However, when surveyed anonymously, adland, an industry that prides itself on being at the forefront of innovation, turns out not to be as clued up on NFTs as one might expect.

Adland's new frontier?

To gauge the industry’s attitude to NFTs, Campaign ran an anonymous survey, the results of which are telling. Of the 1,077 responses received, a third (32.9%) admitted to having no understanding of NFTs at all, and only 5.8% said they considered themselves an expert. And, while brands have definitely been dipping their toes in, only 4.2% of respondents claimed to have used NFTs in campaigns. 

“In the early NFT gold rush, they were just a PR idea – doing one for the sake of it, rather than putting any real thought or effort behind it,” Scaman says. 

Acknowledging the hype and crypto volatility, Michael Litman, MediaMonks’ first NFT lead, agrees with Scaman on the need to plan
further afield. 

“The near-term conversation is over-oxygenated. We’re working with brands mostly on a longer-term basis, rather than tactical campaigns. NFTs offer brands the opportunity to create new revenue models that lock in growth for the history of the blockchain. They’re new means of creating value and emotional meaning for consumers.”

One person actively working in the NFT world is Uncommon CX founding partner David Yates, who cites two routes that brands can build on right now that go beyond NFT as art: gamification and loyalty programmes. 

“Gamification is probably the most straightforward one,” he says. “At the point of minting, you can put in a series of smart contracts, which are really just rules that you can use to do whatever you like utility-wise. Then you can start thinking about the roots for interactivity.” 

Yates brings up professional NBA player LaMelo Ball, who released a dynamic NFT tied to his performance on the court, using Ether Cards. These are an advanced set of tools that allow NFTs within an ecosystem to complete an array of functions, including the triggering of change due to real-world events. 

“[Ball’s] dynamic NFT allows me to collect a little card of him, which changes depending on how many points he scores over the season,”
Yates says. “You buy something that can interact with you.” 

Similarly, looking to attract younger people and improve fan engagement, Major League Baseball, alongside fantasy football platform Sorare, created an NFT-based offering enabling users to play games while purchasing, selling and collecting NFTs of MLB players.  

NFT membership programmes are where the future lies for CRM, according to Yates. As a case in point, at its most recent investors meeting, Starbucks’ chief executive, Howard Schultz, announced plans to add “new concepts such as ownership and community-based membership models that we see developing in the web 3 space”. 

Here, he said, the product would serve as the access pass, through NFTs, and consumers could acquire Starbucks collectibles. 

Will Lion, joint chief strategy officer at Bartle Bogle Hegarty, is less convinced by the potential. 

“We haven’t seen the end of NFTs. But my prediction is their future is likely to be a lot more boring and less hyped up. In my view, we can expect NFTs to become the next-generation of coupons and CRM,” he says.

As leading NFT thinker Punk6529 puts it: “Some day, Chipotle is going to issue you a ‘buy 9 burritos, get 1 free’ coupon as an NFT and you are going to want it because ‘free burritos’.” 

Litman disagrees. Rightly, the technology is at ground zero right now, he says, it’s not version 10. “Brands are just testing people’s appetites, awareness and interest. It’ll keep growing, iterating, even ceding ownership, so consumers will start controlling the product.”

Arriving at NFTs from a digital background, Above & Beyond’s chief creative officer, Dom Goldman, has been dabbling with them over
the past year. 

From a creative point of view, he says, you have to use it with an idea that isn’t simply tech for tech’s sake: “It’s about subverting technology and trying to do something good with it, with a story behind it.”

He took on the challenge of saving 1966 World Cup-winning England footballer Sir Geoff Hurst’s memories as an NFT. “We approached him with the idea to preserve his memory as an NFT, auction it at Christie’s or Sotheby’s and donate the money to Alzheimer’s Society,” Goldman says.

To do so, Above & Beyond collaborated with NFT artist Reeps1 to create a one-off “voice gem” NFT (pictured above), which encapsulated Hurst’s memory, from the smell of the grass to the way the crowd made him feel – every single detail. 

“We’re hoping we can make a 3D voice gem that we could house permanently in a national museum,” Goldman says of how the project could transcend into the physical space. 

Looking ahead, Laws says a lot of investment from strategists is focused on trying to go beyond the novelty of scarcity and ownership, pushing up to composability, then interoperability. 

“Composability [is] the ability to write codes to do different things,” he says. “As an app on your phone would, how do I create programs around me to do different things? 

“Then, interoperability is the ability for that NFT to allow you to interact with different experiences and different systems that were previously independent of each other.” 

He uses the example of flying with an airline belonging to the global airline network, Star Alliance, which houses a range of operators. 

“Qantas and British Airways award you with air miles and exclusive club points, but they’re independent of each other. NFTs can bridge the gap between those, so the program can understand it needs to convert air miles, so you can jump the network.” 

Laws also points to up-and-coming artist Daniel Allan, who recently fostered co-ownership between artists and fans by crowdfunding his own token “$overstim” and an exclusive NFT series. 

Allan, he says, “has a bit of a stigma about record labels and the record industry at large. So he sold NFTs to people, which funded his Overstimulated EP without requiring a record label in the middle, controlling what he does.” 

Involving his fans from conception, Allan could give them early access, while providing them with a slice of the royalties. 

Adland’s adoption of NFTs arguably suggests that the concept is now on the verge of mainstream acceptance. Before then, however, there are a few murky areas that need to be resolved, once and for all.

Great 'ape' escape

One need look no further than the so-called “ape escape”, when Instagram followers of the Bored Ape Yacht Club were phished via an unofficial “mint link”, after the account was hijacked by “outlaws” of the NFT “Wild West”. They were then scammed out of millions of dollars. 

Unbeknown to the followers, when clicked, the link connected their crypto wallets to the hacker’s “smart contact”, a mechanism for implementing a crypto transaction. Four Bored Apes were taken hostage, plus a whole host of other NFTs, with a collective total value of about $3m. 

“Human nature is human nature,” Misan Harriman, photographer, entrepreneur and social activist (pictured above), says. “Technology is here for us to change the world, but the choice is going to be ours and what we do with this technology. It’s how we weld it. That’s humanality, not technology. Just like when we see crime happening in all facets of the analogue world. The anonymity that can be afforded by the blockchain is going to attract a lot of bad actors.” 

He argues that builders in this space need to find a way of dealing with this so it protects people. “It’s no different to the level of criminality that we see in many other industries where there is wealth creation,” Harriman insists.  

Artist Hayden Kays was one of those to fall prey to “bad actors”. Although yet to officially release any NFTs, his work was used to make them without his permission. 

“There seems to be a misunderstanding that some in the NFT sphere hold that it’s a lawless place, where anything goes,” he says, sighing. “I’m currently in the legal process of proving this is not the case. All existing copyright laws apply.

“The situation is just tiring, to be honest. It’s already a difficult industry to make work for yourself, let alone wasting so much time, energy, emotion and money on matters such as this.” 

Similarly, Chris Ollis, aka HappyToast (the artist behind Campaign’s covers for its Summer issue), says his experience of NFTs as a business has been almost entirely negative. “I’ve had numerous requests from NFT marketing people to create artwork or hand over my back catalogue, but every time payment is mentioned, the conversation becomes an investment scam.

“The system is clearly flawed, with artists finding their work being sold without their permission and people who have bought NFTs finding their receipts stolen from supposedly secure wallets and the impossible-to-fail register of ownership has been manipulated.”

Laws says it’s a problem in the industry at large, due to a lack of regulation. “Cryptocurrencies are largely unregulated, so NFT trading is unregulated. Likewise in the metaverse. There’s a sequence of events that needs to happen in order for regulation and policing to start.”

So, until cryptocurrency is better regulated, and thereby the funding closely examined, there will be no guidelines for NFT minting and creation ownership. This means brands will be unable to leverage that in a positive way. 

Another area of concern falls under the environmental impact of NFTs. In April 2021, The New York Times likened minting an NFT to jumping in your petrol-fuelled car and driving 500 miles. Sitting on blockchains, by their very existence they are partially responsible for millions of tonnes of CO₂ emissions. 

Considering Ethereum, the biggest blockchain when it comes to minting NFTs and in NFT marketplaces, has a carbon footprint bigger than Singapore, a year on from the NYT’s caution, have builders found more eco-friendly practices?

Highlighting that people are working to fix the issues at this “embryonic stage of this technology”, Harriman points to Pologon, Solana and Flow as examples of CleanNFTs, which he claims are far better for the environment. 

In some cases, builders are going out of this world, literally, to solve the problem. Axiom Space, a commercial space station, joined the ranks of organisations minting NFTs from space. Due to the concerns over the environmental impact, the company used carbon offsetting to minimise its footprint.

While there might be less-energy-intensive ways to power NFTs, Kate Brennan-Rhodes, senior planner at Good Agency, concedes they’re far from mainstream. 

“I’m yet to see any of them used by the UK brands that have made one. Instead, they greenwash,” she says. “Is it even worth doing from a marketing effectiveness perspective?

Their consumer appeal is based on resale value, exclusivity, and utility (‘perks’). You can create the latter two without a gas-guzzling NFT.”

The rightful kings and queens

Like crypto, many of the builders, wealthy collectors and influencers in the NFT arena are men (usually white). “We need to be very careful who the kings and queens are in this space,” Harriman says. “This thing called unconscious bias comes in when not enough women are given the same opportunity.” 

According to ArtTactic, a company that focuses on research and data in the world of art, women make up just 16% of all NFT artists. But, thanks to communities such as Women Rise and World of Women, things look set to change for the better. 

Both were started by women and are actively striving to create equal opportunities for all. Women Rise is a collection of 10,000 randomly generated and unique NFT art pieces created by Maliha Abidi, an artist, author and activist, while WOW was the brainchild of four friends in the NFT space. Although both are welcoming people into the space, they remain a rare breed. 

More generally, the media buzz generated by the high-priced sales of pixelated images has overshadowed the ability of NFTs to democratise the art world. “The level of talent, empowered by the borderless commerce of smart contract technology, is a far cry from what a lot of people want to write about – which is PFP [picture for proof] projects that are making millions for the already quite privileged,” Harriman says. “I’m seeing people with way more talent than me, from far reaches of the planet that are sustaining a living with the fancy curators from Mayfair, Manhattan or Paris deciding they’re good or not. 

“I’m collecting art from the north of Nigeria – a place where people have limited choices on who they can be. Yet they are brave enough. They don’t even own cameras, they’re taking iPhone photographs that are so good that when I sent them to the people at Apple, they were shocked.” 

Are NFTs here to stay? Yes, according to Scaman, but they’re one of many new frontiers that are worth paying attention to. The key is to develop them in conjunction with a broader strategy that focuses less on campaigns and more on building long-term opportunities and experiences in the coming virtual economy. 

Before then, Harriman says he wants to see developers’ problems dealt with as far as they can be, to figure out how best the technology can solve global issues, whether that’s education, disaster relief or anthropy. 

“Gaming is going to be huge, music is going to change beyond what we can’t even comprehend,” he says. “I would love to see a multi-chain future where you don’t even know when you buy something whether it’s on Tezos, Solana or Ethereum. The blockchains talk to each other to make the consumer experience painless.” 

Ultimately, Harriman, hopes it will be an inclusive space “that brings light to this slightly dark Earth that we’re on at the moment”.