NFTs Are Making A Corporate Comeback

Forbes

Two years ago, non-fungible tokens were sizzling hot, as art aficionados and speculators pushed blockchain-based images to $27 billion in value. Now that the market has crashed, a much less ambitious version of NFTs are finding a welcome home in the marketing departments of corporate America.  In the first week of October, non-fungible token (NFT) trading fell to its lowest weekly level since 2020, according to data from TheBlock, with only $50 million worth of digital collectibles exchanged on secondary markets. It was a bleak month for NFTs, whose trading volume plummeted from a record $3.2 billion a week in 2022 as prices slid to fractions of their crypto-boom highs.  The tepid activity came two weeks before Nike planned to sell more than 30,000 pairs of its popular Dunks sneakers in a collection linked to NFTs, with an increasingly popular twist that allowed non-blockchain buyers to get in on the action. Unlike virtually all of the previous efforts, buyers could pay by credit card instead of using cryptocurrency, snagging a custom-sized pair of Dunks in one of three color combinations, white and blue, black and purple and black and red.  Read the full story on Forbes: https://www.forbes.com/sites/mariagraciasantillanalinares/2024/01/19/forget-boredapes-and-cryptopunks-nfts-are-making-a-comeback-in-corporate-branding/?sh=1a95c4681a03  Forbes Daily Briefing shares the best of Forbes reporting on wealth, business, entrepreneurship, leadership and more. Tune in every day, seven days a week, to hear a new story. Subscribe here: https://art19.com/shows/forbes-daily-briefing Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Here's your Forbes daily briefing for Monday, January 22nd.

00:05 Today on Forbes, Forget bored apes and crypto punks, NFTs are making a corporate comeback.

00:13 In the first week of October, non-fungible token, or NFT, trading fell to its lowest

00:19 weekly level since 2020, according to data from The Block.

00:23 Only $50 million worth of digital collectibles was exchanged on secondary markets.

00:28 It was a bleak month for NFTs, whose trading volume plummeted from a record $3.2 billion

00:34 a week in 2022, as prices slid to fractions of their crypto boom highs.

00:41 The tepid activity came two weeks before Nike planned to sell more than 30,000 pairs of

00:46 its popular Dunk sneakers in a collection linked to NFTs, with an increasingly popular

00:51 twist that allowed non-blockchain buyers to get in on the action.

00:56 Unlike virtually all of the previous efforts, buyers could pay by credit card instead of

01:00 using cryptocurrency, snagging a custom-sized pair of Dunks in one of three color combinations

01:06 — white and blue, black and purple, and black and red.

01:10 Appealing to its traditional youthful buyers worked out for Nike, with the sale bringing

01:15 in $7 million, or an average of about $230 a pair, and each Dunk owner would own a digital

01:21 version of the sneaker on the Ethereum blockchain.

01:24 It's a release model that has proven to be a useful marketing maneuver.

01:27 In August 2022, Nike offered a 10-piece leisure apparel collection through its CloneX NFT

01:33 line.

01:34 The Beaverton, Oregon company, famous for its long relationship with Michael Jordan,

01:39 has been selling NFT-related apparel since December 2022, when it released the auto-lacing

01:44 CryptoKicks IRL collection of sneakers.

01:47 Pieces from that inaugural offering, that sold for about $900, can now fetch up to $3,000

01:53 in sneaker resale sites like StockX.

01:57 Steven Vasilev, co-founder of NFT studio Artifact, which is spelled in all caps RTFKT, which

02:04 was purchased by Nike in December 2021, says that the Dunk Genesis collection, quote, "was

02:10 a huge success."

02:12 He adds, quote, "Even though the market is still down, our products are still bringing

02:16 in new people."

02:19 Non-fungible tokens are created, bought, and sold on blockchains, like cryptocurrencies

02:24 such as Bitcoin and Ether.

02:26 But while each currency's tokens are alike, every NFT is unique and can be used to reward

02:31 users with various perks or be linked to objects in the real world.

02:35 They can also be traded on numerous secondary markets, like OpenSea.

02:40 The NFT landscape has drastically shifted in the two years since the tokens became part

02:44 of mainstream art and pop culture.

02:47 Barely more than a year ago, CryptoPunks, a collection of thousands of pixelated headshots,

02:52 and the cartoon simians of Bored Ape Yacht Club commanded multi-million dollar price

02:57 tags at auction.

02:58 Now, the most expensive rarely trade for over $100,000.

03:03 NFTs selling for over $10 million disappeared last year, and companies born out of NFT collections

03:10 like Wrecked Guy and Bored Ape's purveyor Yuga Labs are struggling to pivot their business

03:14 models away from royalty payments generated by secondary sales.

03:19 The overall market shrank to $9.5 billion of revenue last year from $26.7 billion in

03:26 2022, according to CryptoSlam.

03:29 Emerging from the aftermath of the NFT craze are major companies that are embracing the

03:34 tokens as a cutting-edge marketing device, helping them get closer to existing customers

03:39 and woo new ones.

03:40 Vasilev, who is a member of the Forbes' 2023 30 Under 30 Retail and E-Commerce list, says,

03:47 "Where Nike serves athletes, we serve creators.

03:51 We don't like the word NFT.

03:53 We believe it's too technical and confuses a lot of customers, so we prefer to call them

03:57 digital collectibles."

04:01 Sneaker companies like Nike are at the forefront of NFT's second coming, but they are not alone.

04:06 While eking out meaningful revenue or profit is a long way off, corporate America is finding

04:11 useful ways to employ the unique blockchain-based tokens in their marketing arsenals.

04:17 Some companies like Nike are incorporating NFTs into their products, bringing virtual

04:21 images to physical reality.

04:24 Credit card giant MasterCard, for example, partnered with crypto neobank Hai to allow

04:29 NFT users to showcase their own NFTs on the plastic cards in their wallet.

04:34 Beyond physical branding, others have included blockchain elements into existing marketing

04:39 strategies.

04:40 Coca-Cola added NFTs to its global Masterpiece advertising campaign in June, in which the

04:45 company's iconic red and black bottles were passed around by animated versions of well-known

04:50 artworks like Edouard Munch's "The Scream" and Vincent van Gogh's "Bedroom in Arles."

04:57 For full coverage, check out Maria Grazia Santayana Linares' piece on Forbes.com.

05:04 This is Kieran Meadows from Forbes.

05:06 Thanks for tuning in.

05:07 [Music]

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