Dive Brief:

• Pepsi will release its first nonfungible token (NFT) collection, with a focus on lowering the cost barrier to entry for consumers interested in the blockchain-based technology, according to an announcement.
• Developed with VaynerNFT, the Pepsi Mic Drop collection features 1,893 assets, a number paying homage to the year the soft drink was founded. Each piece appears as a microphone icon that ties to the brand's history in music and pop culture, with designs inspired by variants including classic Pepsi, silver Diet Pepsi and cult favorites like Crystal Pepsi. The NFTs are generated randomly by an algorithm, ensuring each is unique.
• A waitlist for the first 1,843 NFTs opens tomorrow (Dec. 10) at noon EST via a microsite, and approved registrants will be able to mint one piece free of charge, excluding gas fees from the Ethereum blockchain, on Dec. 14 at 12:30 p.m. The other 50 NFTs will factor into future marketing efforts, suggesting Pepsi is trying to foster a community for the long haul versus running a one-off stunt.

Dive Insight:

Pepsi is the latest consumer brand to crack into the budding world of NFTs by drawing on an extensive history linked to pop culture, with the soft drink marketer throwing the spotlight on its associations with the music world through a microphone motif. The company has been the sponsor of the Super Bowl halftime show for years, while recent campaigns have included partnerships with up-and-coming artists like Doja Cat.

As the NFT space grows more crowded, creating a stronger value proposition is important for marketers to break through. Pepsi is angling to do this by offering its NFTs to pre-approved registrants in the U.S. for free, barring a transaction, or "gas," fee for using the Ethereum blockchain. Those interested in securing one of the NFTs will need to set up an Ethereum wallet to transfer their piece to once it's minted, and can display their prize on third-party platforms like OpenSea.

Scale is another key component of Pepsi Mic Drop. Rather than doling out a handful of assets that auction for a premium, the marketer created 1,893 that seek to encompass its pop-cultural associations and beverage portfolio.

"We created the Pepsi Mic Drop genesis NFT collection for our fans, putting their interests and needs at the forefront by ensuring the NFTs are all free of charge and presented equitably as an inclusive and accessible opportunity for anyone to experience the exciting world of NFTs," said Todd Kaplan, vice president of marketing at Pepsi, in a press statement.

While skepticism of NFTs remains high in some circles, recent activations have paid off for marketers and helped reinforce their brand equity with consumers. Budweiser released its first batch of NFTs in late November and saw its "Heritage Collection" — comprised of 1,936 distinct pieces based on its beer cans — sell out within an hour, Ad Age reported. Coca-Cola, Pepsi's chief rival, sold its first NFT for over $500,000 at auction in August, a high price tag that might have informed Pepsi Mic Drop's emphasis on accessibility. All proceeds from the Coke auction benefited Special Olympics International.

Beyond cost considerations, NFTs receive flak for their impact on the environment. Blockchain-based transactions require a high amount of computing power that can produce staggering emissions. Pepsi appears aware of the potential for backlash at a moment where sustainability demands are mounting against large packaged goods companies. It will implement a carbon offset program to try and make the net carbon footprint of any transactions zero.

Crypto enthusiasts and insiders may view the proliferation of branded NFT drops as intrusive, cheapening what they believe is a long-term value play in the chase for quick-hit publicity. Pepsi is withholding some of its NFT for future marketing activations and giveaways in a bid to build an ongoing community of holders.

The campaign is also a sign that marketing services dedicated to NFTs and other metaverse-adjacent ideas could be gaining traction. VaynerX debuted its VaynerNFT consultancy in July, with Budweiser as the launch partner.