Designing
New Context
Designing
New Context
Non-fungible tokens (NFTs) have drawn a great deal of attention as investments, including high-priced digital art. Now, NFTs are being re-examined based on their marketing value. Many people who are not technical experts have heard about NFTs, but find them hard to understand. On the topic of using NFTs in corporate marketing, we spoke with Takanobu Katagiri, executive producer in the Business Strategy Office/web3 Business Development Department of Digital Garage, Inc.’s Marketing Technology Company.
executive producer; Business Strategy Office/web3 Business Development Department; Marketing Technology Company; Digital Garage, Inc.
Takanobu Katagiri
Was a buyer and salesperson at a music company for nine years before moving to an advertising company, where his job included ad content and digital advertising, mainly out-of-home ads. Worked in sales for national clients such as Shiseido, Otsuka Pharmaceutical, ANA, and PARCO. Joined Digital Garage, Inc. in April 2021, where he works in national client market development utilizing advertising and new technologies (web3, AI, etc.).
Digital Garage’s Marketing Technology Company supported J. FRONT RETAILING Co., Ltd. in conducting an NFT-related survey and distributing NFTs during an e-sports event at SHIBUYA PARCO on November 11, 2023. Among the respondents, 70% said they had never heard of NFTs, but over 85% answered that they wanted to buy NFTs sold by e-sports teams. These results were fascinating to Katagiri.
“It was interesting to learn that respondents didn’t want NFTs for free—they wanted to purchase them. For e-sports and other companies using fan marketing, we anticipate that many fans would be thrilled to be able to buy NFTs along with regular merchandise. NFTs could also encourage further actions by users if they served as tickets for special experiences.”
NFT marketing is not well known in Japan, but it is already implemented by many foreign companies. Early adopters include adidas, Nike, PUMA, and other sportswear manufacturers. For example, adidas collaborated with multiple NFT brands to launch Into The Metaverse, the brand’s first NFT collection.
NFT owners can participate in adidas events and get virtual wearables for platforms like The Sandbox, an NFT game. By buying specific NFTs, they can access special communities that are only available to NFT owners. Katagiri said these movements in the global market can also reveal other trends.
“Interestingly, luxury brands like Gucci, Yves Saint Laurent, and Givenchy are getting involved in NFTs. These brands aren’t aimed at young people, the so-called ‘digital natives.’ In addition to cutting-edge branding, I think this is a significant way for them to market their products to affluent people who own crypto assets.”
“In any case, NFT buyers can become core fans. Instead of just purchasing regular products, a great deal of enthusiasm is required to go through complex procedures to gain new contact points with the brand. I imagine these brands are striving to draw in that demographic.”
Katagiri, who actually helps companies employ NFTs, explained how global brands are specifically implementing NFT marketing.
“There are three phases in NFT marketing: distribution, utilization, and customer relationship management (CRM). In the distribution phase, brands transfer NFTs at points of contact to users, such as event attendees, social media followers, and online shoppers. In addition to generating user interest, NFTs with special privileges can have sales promotion effects. Still, this is just an entry point in terms of the overall marketing strategy.”
“The second phase is utilization. The brand provides new experiences via NFTs owned by users. There are lots of potential methods—NFTs can function as tickets to enter a special location, or the brand can build a community only for NFT owners. They can increase their number of active fans by having NFTs gain value along with the user’s participation-based ranking.”
The Digital Garage Group has used NFTs for book marketing. Book purchasers and event attendees received NFTs that granted access to exclusive events and a community centered on NFT owners. This helped promote the book, and also resulted in a community of about 1,000 dedicated fans.
NFT marketing phases (image: Digital Garage)
The final phase is CRM, which is linked with NFT marketing to design measures that help improve lifetime value. For example, J-WAVE Inc. used its app to distribute special NFTs to users who listened to 50 or more hours of radio in a span of one month.
By integrating its app with radiko, J-WAVE is able to visualize who listens to what programs, and to identify its most enthusiastic users. It can also obtain more precise data about user attributes—such as gender and age range—based on the e-mail address provided by the user during registration, leading to more effective ad targeting and timing. And if a user owns other NFTs, they can be used for more detailed analyses. In this way, J-WAVE could offer special benefits, such as events and programs, to NFT holders who listen to over 50 hours of radio each month.
Even if they are aware of specific methods for using NFTs, many marketers do not know where to start or how to delegate resources, and it is difficult to actually implement them. Katagiri said the first step is to think more simply, and to begin by adding NFTs to current marketing initiatives.
“First, I recommend that companies use NFTs for sales promotion. They could start by providing NFTs as perks for customers who frequently use their apps or visit their stores. Although it’s a good idea to eventually bring in CRM, they don’t have to build a system for this right away. I think it’s better to begin by updating their existing marketing efforts.”
There are few examples of companies actually implementing NFT marketing, and Japan is particularly slow compared to the rest of the world. Despite this, Katagiri said that NFTs will come into more widespread use within the next few years.
“For example, think about near-field communication (NFC) technology in transportation IC cards, which are utilized for many different purposes. Users don’t know what ‘NFC’ means. In the same way, I think a time will come when NFTs are naturally incorporated into familiar services.”
“Major Japanese carriers, like DOCOMO and KDDI, have launched their own NFT wallets. Without anyone noticing, efforts are underway to build an environment and systems for NFT services on individual smartphones. For instance, next year’s World Expo 2025 Osaka Kansai will be the first to use NFT tickets.”
We asked Katagiri about his predictions for the future of NFTs.
“I used to work in the music industry, and I personally feel like NFTs have a lot in common with the dawning of Japanese hip-hop. Dedicated fans gathered at Shibuya record stores, and there was a real feeling of exclusivity. I get a similar sense from NFTs.”
“NFTs are causing waves in specific sectors and have an increasingly positive image, mainly among young people. But I don’t see something drastic happening, such as web3 totally replacing Web2.0. Just like hip-hop, I think NFTs will be a single ‘genre’ that becomes part of our daily lives in existing formats. Rather than tech companies fully switching from Web2.0 to web3, I think we will see them building a world that incorporates the best parts of each, something like ‘Web 2.5.’”
The Digital Garage Group provides extensive support for NFT-based marketing, including distribution, utilization, and CRM. Prior to these phases, it also helps companies draft strategies for using NFTs in their businesses.
CRM. Prior to these phases, it also helps companies draft strategies for using NFTs in their businesses.
One of several examples is SIW SHIBUYA NFT HUNTING with J. FRONT RETAILING Co., Ltd., a dynamic initiative with Shibuya City in which participants could obtain NFTs at five locations in Shibuya during SOCIAL INNOVATION WEEK (SIW). A total of 412 NFTs were distributed during the four-day period, and 56 accounts acquired all five NFTs.
The Digital Garage Group offers other types of NFT support besides marketing, including specific solutions like NFT production and NFT-based games. It also helps companies manage and transfer NFTs. It provides a full range of services for companies wanting to try out NFTs, from strategies to implementation and administration.
Finally, we asked Katagiri about new challenges the Digital Garage Group wants to undertake in the NFT field.
“We will keep working to help companies in the NFT distribution, utilization, and CRM phases. In particular, NFTs can be used to acquire qualitative user information and behavioral data, which isn’t possible with other types of marketing. We have to promote NFTs for more precise customer analysis, and I hope to collaborate with other companies that have the same vision.”
“Many users across the world are interested in NFTs, which inspire them to purchase products and services. I think there are opportunities for companies to promote their brands to these types of customers today. NFT is a new technology with lots of latent potential in the global market. I look forward to trying new things with companies who are interested in this field.”
Through its original marketing concepts and cutting-edge technologies, the Business Strategy Office continuously develops new methods and solutions while providing powerful advertising and promotion support to its partners. As an industry leader, its original marketing techniques can only be offered by Digital Garage.
