NFTs Can Be Branded Money Generators, Not Just Marketing

Strong partnerships “in the creative space,” she says, lead to creative expression and fuel a “democratic system” where not only the company’s own designers but its fan community help inspire new products.

Beyond the movies, there are Lego Star Wars TV specials and product collaborations with Ikea and Adidas and others. “Every time,” Goldin says, “it’s really all about helping us reach kids or reach our target audiences in new ways and really delivering more value through collaboration.

Leave money on the table

This kind of thinking, while innovative, overlooks the fact that branded extensions in clothing, NFTs or elsewhere in popular culture can absolutely be profit centers, says Gary Vaynerchuk, CEO of VaynerMedia. He is also the founder of VeeFriends, the eighth largest NFT collection currently, according to DappRadar, with sales volume of nearly $ 72 million since May among more than 4,700 merchants.

Although Vaynerchuk donates 1% of VeeFriends royalties to charity, he makes no secret that he is there to make money with his 268 designs from the collection. When they are resold, VeeFriends receives a 10% commission. Beyond the art, owners also have access to a VeeCon event that will be held regularly starting next year.

Vaynerchuk says he’s pushing his clients to NFTs as a way to make money, including Anheuser-Busch InBev. Or at least that’s his advice. He alone sees the art of Budweiser as a potential gold mine. “I saw $ 34 million upfront and $ 17 million in secondary sales in 70 days on VeeFriends,” says Vaynerchuk. “It’s quite remarkable. It’s something I invented from scratch.

The mainstream Fortune 500 brands could undoubtedly do even better, whether in NFTs, clothing or other licensing, he says. He mentions General Mills Wheaties, whose cereal boxes featuring sports stars have long been collectibles. In essence, anything that could be a collector’s item could be an NFT – something Topps figured out with its NFT collection for Major League Baseball offerings, he says.

Obviously, the National Basketball Association also had a sense of the business value of NFTs well ahead of the market. The NBA and the NBA Players Association reached an agreement in 2019 with Dapper Labs to create NBA Top Shot, a digital platform for basketball fans to collect, trade and own great moments in league history. on blockchain via NFT. NBA Top Shot languished at fairly low trading levels for nearly two years until the NFT craze erupted in earnest in February, according to data from DappRadar. NBA Top Shot now ranks second in NFT collections on DappRadar, with sales volume of over $ 637 million.

Pass the casting

But while sports leagues are used to for-profit licensing, mainstream brands usually aren’t.

“Most Fortune 500 CPG brands or other consumables don’t tend to have a remarkable DNA on how to create an NFT garment or business,” said Vaynerchuk. “That doesn’t mean he’s not here to be caught. It’s just the casting in these organizations. “

The creative marketing vs profit center mindset is not mutually exclusive, says Brad Jakeman, senior advisor at Boston Consulting Group and former chairman of the Global Beverage Group at PepsiCo. “There is no rule,” he says, “that it has to be one or the other” – marketing or money.

“When I started the Creative League at PepsiCo, probably five years ago now, one of the key strategies we had was that we thought a lot of brands had stocks bigger than the bottle, bigger than the bottle. bag, ”Jakeman said of the design studio. he said. “If you take Pepsi, it’s a brand with a long history of being involved in pop culture, especially in music. And the question is, are there any ways to monetize these stocks while deepening them and deepening people’s relationships with the brand.

The answer, Jakeman believes, is yes. And while license revenue isn’t viewed as a separate profit center, it can still significantly offset other paid marketers, he says. “You can easily imagine a world where the revenue that brands generate through the right licenses could actually fund a lot of the marketing for the core product,” he says. NFTs, he says, are simply creating a new vehicle to do it, arguably with fewer middle players to take a share of the brand action.

Despite that, says Jakeman, “strategically I think it can backfire on the brand as well. If you get into categories of companies where you don’t have equity and dilute equity, it can be detrimental.

If you don’t, someone else can

Brands that don’t get an artistic or cultural license for their brands can find someone else, potentially with the brand having no control and getting no income. Campbell Soup Co. never asked Andy Warhol to do these paintings, for example, although a product manager wrote the artist warmly approving his work.

Whether it’s t-shirts, tracksuits, shoes, or household items, it’s pretty clear that using someone else’s trademark will be considered an infringement under of the law, says Oliver Herzfeld, general counsel at Beanstalk, a global brand licensing agency owned by Omnicom. But when it comes to works of art, the law is getting a bit more blurry, and there has yet to be a legal challenge involving a freelance artist incorporating a trademark into unlicensed NFTs. In fact, trying to stop unauthorized NFT sales at this point may just sound too uncool for brands to care.

“The reality is that there is widespread infringement right now if you enter the NFT markets,” Herzfeld said. “The tension is that you have the First Amendment right to create art. The counterweight is that you are not allowed to commercially exploit someone’s mark under the guise of art.

The most recent test came with rapper Lil Nas X and streetwear company MSCHF releasing a “Satan Shoe” earlier this year, built around the Nike Air Max 97 but personalized with human blood and pentagrams. Nike was not amused, filed a complaint alleging trademark infringement and made the collaborators of the shoe back down. A single work of art is one thing. Selling 666 shoes using part of the Nike brand is another.

Herzfeld notes a court case in which an artist was allowed to sell individual paintings of great moments in Alabama football history Crimson Tide, but prohibited from selling merchandise such as coffee mugs or shirts bearing reproductions of the painting.

Of course, the reality is that tackling every offense isn’t very profitable for big brands, says Herzfeld, so some offenses fall through the cracks. Tide from Procter & Gamble Co. has long inspired t-shirts, Neil Young wearing one to a 1995 concert. A Google search shows many Tide T-shirt options, some clearly not authorized by the brand. The company declined to comment on how vigorously it is working to shut down the renegade clothing.

“You have to weigh the costs and the benefits,” Herzfeld says, in addition to the PR. The US Army, a client of Beanstalk, has hundreds of licensees using its logo, including many “former offenders” who are military veterans, contacted by the service, who agree to guaranteed minimum royalties, fees. approval and quality controls. But the military is not there to pursue enthusiastic veterans who sell army t-shirts.

“You don’t want to start a dispute with a former military man who did something in good faith,” Herzfeld says. “The US Department of the Army is not making a lot of money, but it is a favorable way to solve the problem of unauthorized use.”