Analysis: Must know NFT basics for marketers in HK looking to launch projects

NFT is the hottest topic of conversation right now, and it’s not falling on deaf ears in the marketing industry. Globally, many brands and celebrities have already jumped on the bandwagon creating their own executions to entice consumers.

For example, singer Jay Chou and Hong Kong actor Edison Chen are two popular personalities in the NFT online marketplace OpenSea, with Chou's NFT even topping the list. Boyband MIRROR's member Ian Chan also launched 2,222 NFTs, and the first batch was launched in November 2021. Meanwhile, actor Shawn Yue sold an NFT for more than HK$33 million before, reported several media outlets. 

In Hong Kong alone, we’ve seen an extensive number of brands eyeing the space. For example, NFT and blockchain game developer "HolyShxxt!!" launched a set of generative art collectibles that includes 8,888 special football players’ NFTs. Each "HolyShxxt!!" football players’ NFT is unique and is created by a combination of 15 traits, and over 480 attributes in addition to special functional features such as air jet, wings and other elements that make it more valuable.

In a release, "HolyShxxt!!" said it believed that a successful NFT initiative should ride on good online community management that creates long term value. Hence, the company is going to launch a play-to-earn football management simulation game for NFT holders, allowing all community members to collaborate and co-create their dream team.

But before working on any NFT project in Hong Kong, brands must be armed with enough information about their home turf and global trends impacting their ground.

In a conversation with MARKETING-INTERACTIVE, Vincent Kan, head of digital, Wavemaker Hong Kong said that while the NFT market is emerging quickly, there is still for education. He added that NFT as a topic is gaining market attention because of its association with cryptocurrency and potential investment value.

“Currently in Hong Kong, the majority of NFT products are still digital art and collectibles," said Kan. While NFT products are gaining in traction, and this could be a potential new channel for brands, there are many aspects about the NFT space brands need to consider.

Let’s take a look at the basics

Fundamentally, underlying the NFT space is blockchain technology that makes transactions and ownership fully transparent. Currently, there are lacks in the governance and regulation of the NFT space, but of course, as the space matures, industry players do speculate more structure coming in place. However the lack of regulations can be a problem, said To Cheung, founder of UD.

"Sometimes it is hard to tell whether an NFT product is genuine. For instance, when a person offers an NFT product inspired by novel Demi-Gods and Semi-Devils, he or she doesn't need to prove whether it is a genuine product or how it is created. To some extent, producing counterfeits is even easier."

For example, just recently luxury company Hermes sued NFT creator Mason Rothschild, who designed the MetaBirkins NFTs. The New York lawsuit was filed last Friday alleging trademark infringement.

“As there is no regulation at the moment, when a buyer suspects whether the NFT product is genuine, he or she cannot lodge a complaint as nobody is governing,” Cheung said.

Marketers should also notice the fluctuating cost of cryptocurrency, which could affect the price of NFT products.

Deciding to get started

Although there are many areas that marketers need to take note of, they also need to know how to tie the world of NFTs back to marketing.

Currently, NFT resonates mostly with Gen Z and art enthusiasts, Wavemaker Hong Kong’s Kan said. In addition to the value of NFT, brands should also take note of its incremental benefits of it, such as providing the target audience with member-only communities or events.

“Brands can also offer memorabilia to attract their customers.Brands can also explore new media opportunities from placements to virtual custom experiences," he added.

When it comes to execution, Kan said brands should leverage integrated campaigns such as PR events, social and influencers marketing featuring famous digital creators and celebrity endorsers, alongside NFT activities to drive brand association, social buzz and marketing outcome. Marketers should also consider integrating real life events into virtual initiatives such as delivering an NFT product through an offline exhibition or physical product.

Adding to the conversation, Cheung said NFT is not just about selling only one art piece at a high price now. Brands are now engaging their customers with perks and pre-ordered items, as these means are aimed at enhancing loyalty.

Given that NFT is still a relatively new concept, said Cheung and Kan, consumers need more education to understand the space as well. This means, more time may be required for brands  to figure out their right target audience and what can truly be achieved when venturing into the space.

"NFT can be challenging and expensive and brands may not be able to master its related skills sets and technology at the moment. Moreover, NFT's digital creation, production, its related technology and data privacy may further make conducting NFT-related marketing initiatives more complicated," Kan said.

He added that in addition to social campaign metrics, a clearer outcome measurement method to evaluate the effectiveness of the NFT marketing activities should be considered.

Finding the right partner

Cheung said the most arduous challenge for marketers is generally the inadequate knowledge of NFT. To educate themselves further, he advices marketers to invest their own time and money into NFT products and cryptocurrency to understand the entire transaction process.

"There is nothing better to educate yourself on your own as there are no courses right now. By creating a crypto wallet and trading NFT, your understanding of NFT will be greatly enhanced and that is something textbooks cannot tell you," Cheung added.

And finally, if your brand has done its research and is set on venturing into the NFT space, experts advice working with an agency with the right capabilities to truly understanding the potential risks and benefits, and hold the ability to mitigate them for clients.

The agency partner should also excel in integrated planning, with strengths covering branding, social, content, data and performance to deliver an effective NFT campaign.

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