Marketing Briefing: Could the music industry be an inroad for mainstream NFT use?
- With the NFT-minted Grammys behind us, there’s been talk of what NFTs mean for the music industry — but also what the music industry means for NFTs.
- In other news, as banks continue to get personal with their user base, Farrell Hudzik, EVP of financial institutions at Cardlytics, shares her insight on how the industry is evolving.
If you followed the Grammys this year, you may have noticed the total crypto craze that was taking place. In the words of Trevor Noah, who hosted the event, “It’s like if crypto was a city.”
For one, the event had some pretty notable crypto sponsors, including OneOf, a music NFT platform on the Tezos blockchain, and crypto exchange Binance. OneOf, specifically, signed on to a three-year partnership with the Recording Academy back in November 2021. The move will give the platform a chance to sell new NFTs from more high-level artists.
For the music industry, NFTs give artists the chance to have more ownership over their creations. Right now, the revenue distribution tends to be 50/50, with one half going to the performer and the other to lawyers, distributors and agents.
But with non-fungible tokens, the revenue distribution could be more in the performer’s favor. Even if they choose to make an album or a song into an NFT, they can include their ownership within the token by making it a part of the token’s metadata. That means that if someone comes and buys an artist’s NFT, and then sells it, the original owner – aka the artist – will continue to receive royalties.
Linkin Park’s Mike Shinoda released his first NFT last year and was able to raise $11,000 as a result.
“With NFTs, we can let the early figures speak for themselves. Even if I upload the full version of the contained song to DSPs worldwide (which I can still do), I would never get even close to $10k, after fees by DSPs, label, marketing, etc.,” Shinoda explained in a tweet.
There's also been other musically notable NFT news. For example:
- A few days ago, it was reported that Snoop Dogg – who has professed in the past to being an avid NFT collector – has plans to offer some of his unreleased music as an NFT. In November last year, the rapper partnered with digital media artist Coldie to offer his first NFT collaboration.
- Early this year, DJ Steve Aoki was reported saying he made more from his NFT sales in 2021 than he did from music royalties. (To be fair, he also pointed out that 95% of his income comes from live music jobs. But still – the statement says something.)
- In February, Universal Music (the group behind artists like Drake and Taylor Swift) partnered with NFT platform Curio to release a collection of NFTs
The list goes on. The main takeaway may be that for NFT platforms, the music industry’s participation in all the NFT niftiness could mean these tokens’ entrance into mainstream use – at least among music fans. Consider the music festival Coachella — its parent company AEG recently auctioned off 10 lifetime passes in the form of – you guessed it – NFTs.
Still, there remain mixed opinions about all the NFT love musicians are showing as of late. Music critic Anthony Fantano recently wrote an article about the topic for the Washington Post. “The whole thing stinks like an astroturfed promotional campaign to generate interest in cheaply made primate doodles,” he wrote.
Fantano points out the number of musicians purchasing Bored Ape NFTs and gleefully advertising it. A recent music video for Post Malone and The Weeknd’s new song, for example, shows the purchase of a Bored Ape.
Plus, a lot of the NFT stories out there still tend to be on the sketchy side. Singer Liam Payne, for example, recently warned fans about purchasing fake Payne NFTs from one super sketchy website (which has since been taken down, of course). Meanwhile, the value of a unique token is still pretty volatile.
Tech and regulations surrounding NFTs still aren’t fully baked – no matter how many musicians hop on the NFT wagon. Until that changes, the future of NFTs remains as mixed as this metaphor.
‘Where marketing goes, payments follow’: 3 questions with Farrell Hudzik, EVP of financial institutions at Cardlytics
As consumers continue to demand more personalized services, banks are shifting their outreach tactics.
Cardlytics is an advertising platform that embeds promotional content into banks’ card statements. For this week’s briefing, Tearsheet spoke with Farrell Hudzik, EVP of financial institutions at the company, to get her thoughts on how banks’ communication with consumers is evolving.
- What themes are you noticing in the ways banks are reaching out to consumers?
As people continue to move to online banking and the bank teller relationship fades away, banks are rethinking their digital strategies and how they reach and engage with customers outside of bank walls.
Smart banks are using data to personalize the experience for consumers — tailoring offers, customizing their messaging, and creating specific programs, like cash back on purchases, based on consumers’ interests. This level of personalization is a valuable way for banks to engage customers outside of their physical locations. Banks are able to reinforce their brand messaging and build customer loyalty without being self-promotional — since rewards, like cash back, ultimately benefit the end customer.
We’re also seeing banks engage with customers via email, push notifications, text messages, and social media — to reach customers where they are in their day-to-day lives. Email volumes alone were up 118% year-over-year in Q4 2021 in the banking sector, according to data from Competiscan.
Banks are also relying less on traditional push marketing and investing in new ways to bring customers to their virtual doors. Take many of the mission-driven neobanks who exist to provide banking services “for good.” For example, Zolve focuses on providing no-fee seamless banking for those moving from India and beyond without a US-based credit history, TreeCard’s mission is to reforest the planet as consumers spend, giving 80% of their profits to reforestation and environmental investments, and Ellevest’s mission is to “get more money in the hands of women.”
We’re also seeing unique partnerships and acquisitions. Take Payfare, who partners with brands like Lyft and DoorDash to provide debit cards to gig workers enabling payment directly to their card as soon as a ride or delivery is complete, or JPMorgan acquiring The Infatuation — the trendiest restaurant rating and review site in the market — as they invest more in creating unique and exclusive shopping, eating, and event experiences for their customers.
And you can’t miss Coinbase’s server-collapsing Super Bowl ad or Crypto.com’s hidden QR codes for LeBron NFTs.
- What will communication and engagement between bank and consumer look like ten years from now?
We expect banks to embrace the latest technology and continue to get smarter in how they build relationships with their customers. This likely looks like even more personalized banking experiences, more anticipation around customer preferences, and the implementation of whatever the dominant communication channels turn out to be, whether that's via voice, text, watch, or even the Metaverse. In fact, I think the Metaverse will drive a fundamental change in how people discover, shop, and engage from gaming, to dating, to shopping, to banking.
In fact, JPMorgan is the first bank to invest in the Metaverse by opening a lounge in Decentraland, a virtual world based on blockchain technology. In June 2021, one land package in Decentraland was sold for $913,000, with the developer Everyrealm turning it into an entire shopping district, modeled after Metajuku, inspired by Japan’s Harajuku shopping district.
With in-game ad spending set to reach $18.41 billion by 2027, marketing and advertising has the potential to be one of the biggest segments of the meta economy. Therein lies the opportunity for forward-leaning financial services companies because where marketing goes, payments follow. The winners will figure out how to engage with the next generation of connected consumers across all social, work, gaming, shopping, and living dimensions.
There will be financing of virtual real-estate, interacting with bankers and advisors in virtual branches, sponsoring of virtual events carrying physical world cardholder benefits into the Metaverse world, and use of deal-based offers to drive avatar brand shopping experiences.
- What are some of the biggest mistakes banks are making when trying to engage customers?
Consumers today expect more than personalization — they expect differentiation. Customers expect their banks to value and honor their total relationship, but many banks are still operating in profit center silos and are unable to create total relationship benefits across their products. Bank of America continues to lead the way with their Preferred Rewards Program with a clear-tiered total benefits program for cross-product engagement, but they are unique in the space.
Additionally, as the world of banking and retail intertwine — with the rise of buy now, pay later tools, and retailers offering their own credit cards/fintechs, like Walmart’s Hazel — there is a huge opportunity for banks to create personalized products that put the bank more at the center of their customers' purchasing lives. Rather than just powering transactions in the background, banks have an opportunity to be the central hub of consumers' lives.
Lastly, banks need to closely audit the offers and features consumers can get from fintechs/neobanks and adjust accordingly. For example, as neobanks started allowing consumers to access paycheck tax refund early, banks responded by creating comparable offers and promoting their “early access” to funds features, too. Banks who aren’t monitoring competition and responding in an agile way will fall behind.
The latest on the Acquire Podcast
What does it mean to create a super new voice for a super old financial institution? And how does a fintech go about effectively niching down its product? Tune in to the latest episodes of the Acquire Podcast to find out.
- Episode 4: Michelle Faul, VP of global marketing at TreviPay, on using the company’s own community playbook to niche down its product.
- Episode 5: Kirti Naik, head of marketing at BNY Mellon Wealth, on using unscripted videos to bring the 230-year-old establishment’s motives into the spotlight.
Side note: Know anyone who might be a good fit for the podcast? Email Rebecca directly at [email protected]
What we're reading
Top fintech marketing strategies, according to Marin Luetic, head of partnerships at Decode (Decode)
The 30 most influential fintech marketers (Fintech Marketing Hub)
Some stuff to keep in mind about SEO for fintechs (Finextra)
Another point in favor of personalized banking: Scotiabank’s new campaign emphasizes its role in offering tailored advice (Strategy)
Top valuable U.S. banking brands (The Financial Brand)
What do NFTs and Web3 have to do with influencer marketing? A lot, it turns out (Forbes)
The permeating NFT 'bro culture' means missing out on a key user base (The Drum)
U.S. retail banks are struggling to stand out, according to recent findings from J.D. Power (Business Wire)