Are crypto integrations by household name brands and sports teams evidence of increasing use cases for digital assets and cryptocurrencies — or more of a marketing ploy?
This week, Tiffany & Co., Gucci and FC Barcelona all dove deeper into the crypto sphere with partnerships in the digital asset world. Tiffany launched NFTiffs — it’ll sell 250 NFTs for about 30 ether, around $50,000, to CryptoPunks holders, who will be able to redeem custom pendants in the style of their CryptoPunk NFT.
Meanwhile, Gucci began accepting ApeCoin, the token associated with Bored Ape Yacht Club NFTs, and FC Barcelona announced a $100 million euro investment from fan engagement app Socios.com. The soccer league has been collaborating with Socios.com since February 2020, when it launched FC Barcelona’s fan token, called BAR, but the investment will add to its web3-related plans.
“The financial upside of creating new revenue streams and channels for culture are clear, regardless of market conditions, but brands that command this level of attention aren’t keen to risk their brand value and reputation,” John Wu, president of Ava Labs, said to TechCrunch. “It’s safe to assume strategy for these initiatives have been discussed extensively and approved by the most senior leadership.”
“It is a smart business play for any brand or organization to look at NFTs and crypto as a potential future revenue stream or project, but it is not the unicorn to save everyone,” Nicholas Donarski, founder and CTO of Ore-System LLC, said to TechCrunch. “The value and long-term use of these digital items and goods only come with utility. They need to have more use than just the art or their ‘value’ will likely fade over time.”
But do these partnerships truly mean anything for the crypto ecosystem? Or have they done their job merely by being a great marketing ploy that resulted in having me write about it?
“NFTs and marketing are going to continue to go hand in hand,” Donarski said. “All brands want to get into further markets and become more available to customers. NFTs are very buzzworthy right now, and sports teams, major brands and corporate organizations are all looking to join the NFT and metaverse space because they see there is money to be made.”
Whether these have a meaningful impact on the projects in the short term is to be seen, Wu said. “Long term, there is already a clear win for these companies to build the internal muscles and knowledge for how to engage with the technology and communities, which is almost always underestimated when brands make their first moves into web3.”
The top priority for all global brands is to build trust and long-term relationships with consumers, Charlie Silver, executive chairman at Permission.io, said to TechCrunch. “Of course there is tremendous PR value by offering NFT rewards [as] they are positioning themselves as forward thinking and culturally sophisticated.
“What we are seeing is early adopters embrace web3,” Silver said. “Tokenized rewards from brands without any doubt will be the future of engagement on the web. This all becomes mainstream when we see clarity around regulation in the U.S. Then every advertiser will embrace it.”
“The brands that get involved now will be ahead of the others that balk at the technology, but it is still in the early days of really seeing the boom for these organizations,” Donarski said.
The awareness and implicit validation of the technology do matter and will influence future adoption, Wu argued. “But the most significant impact is that these organizations are learning web3 hands-on rather than observing. That is the only way to earn authenticity in this space and build a community.”
Whether these partnerships will succeed is yet to be determined, but in the meantime, they’ve caught the attention of both web3 enthusiasts and non-crypto-natives.
Initiatives that start out as a marketing-driven move can become very real when brands see the feedback from their customers, Patrick Sutton, VP of communications at Ava Labs, said to TechCrunch.
Regardless, these integrations are showing another glimpse at how crypto assets like NFTs can expand into the traditional market.
“Markets are cyclical, but steady progress and adoption by brands like this is crucial to web3 continuing to grow and reach more mainstream audiences,” Wu said.