Blog #7 from our series "NFTs and Crypto: The next big asset class?"
With the rise of social media in recent years, "Influencers" have become key actors in many brands' and companies' digital marketing strategies. In short, influencers are digital online creators with strong presence in social media.
Influencers have access to a built-in audience, usually with high engagement numbers, that they have built over a period of time. As their name suggests, influencers influence their followers in any way they see fit. For instance, influencers can impact their followers’ lifestyle choices, product consumption and purchases.
While many underestimate influencers’ true ability to promote brands and increase product sales and customer retention, they have played a significant role in marketing strategies for large brands around the world. More recently in the news, Chinese male beauty influencer, “Lipstick King” sold $1.9 billion worth of goods in a single live stream which lasted approximately three hours. Yes, you read that right.
So, how do influencers fit into the NFT market?
As a content generation, media and entertainment market, the NFT industry has been undoubtedly drawing the attention of influencers around the world. As content creators, influencers see value in NFTs by monetising content. This refers to NFTs’ massive potential to tokenise art or any form of digital media content, which is exactly what influencers produce on a daily basis.
Moreover, influencers are drawn towards the copyright royalties model for their generated content. As a result, many influencers have become brands themselves: they can sell the NFT reflecting their brand rather than negotiating deals for using their public image.
This strategy has also been adopted by many celebrities who have jumped onto the NFT wagon and sold content they created. For instance, Tom Brady’s new venture Autograph.io, has an excelling board of sports personalities and professional athletes. More recently, Autograph helped Olympic gymnast Simone Biles launch her first drops (NFT collection) – several card packs have already sold out.
Moreover, influencers also tend to collaborate with brands who would like to use their following to advertise their products to a particular target audience and give the brand tons of exposure. In exchange, the influencer may ask for the brands’ products or a monetary reward of the amount of sales they generate. Either way, there is indisputable evidence that a well selected and relevant influencer boosts brand’s exposure in their desired and target markets.
Finally, we also have influencers who do not promote NFTs or other products, but rather inform and educate their audience on blockchain, crypto and the general intricacies of the digital asset markets. For instance, there are influencers for particular marketplaces or influencers who publish videos for their followers analysing different types of NFTs and which they believe might increase in value. Just like following analysts who look at the stock market, these influencers are followed by those who see NFTs as speculative assets.
In this context, influencers' following is mostly composed of Millennials who 27% of them say they are investing in NFTs, with 36% and 35% saying they are interested in songs and artwork NFTs. This means that influencers in the NFT world might become the next hot property in the market. As many argue, the value of digital assets such as NFTs is determined by market dynamics, essentially what people like and are demanding. Thus, if influencers have a direct impact into what their followers are enjoying and looking for, they can have significant impact on market demands.
Does this sound like a tampered Invisible Hand in the markets? That is a question that will be answered in the future. For now, influencers are getting more and more people into the crypto and NFT markets. Will you join in?
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