The Reed Smith Guide to the Metaverse - 2nd Edition

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Virtual worlds – each with their own culture, where consumers can adopt a different persona with behaviors and purchasing patterns that do not align with their real-world habits – provide a challenge and an opportunity to brands looking to engage in the space. The metaverse is providing an additional touchstone for developing relationships with consumers through advertising within the metaverse (think virtual billboards) from sponsorship opportunities for a virtual “bar” during a Super Bowl or virtual fashion weeks, to integrations within and creation of games (for example, Gucci x Roblox “Gucci Garden” digital multimedia experience). Done well, these direct-to-avatar (D2A) marketing opportunities can lead to digital and real-world purchases and brand loyalty.

Over the last year, brands have continued to take steps into the metaverse and integrate NFTs into their marketing strategies.

Brand- or celeb-themed artwork, memorabilia, or other assets. Brands have been integrating NFTs into various celebrity collaborations and promotions, including selling unique brand-themed assets.

Brands are buying and acquiring companies that are already in the metaverse space. For example, In December 2021, Nike acquired the NFT studio RTKFT, which produces NFT collectibles including digital sneakers. Coca-Cola teamed up with 3D creators at Tafi to auction off NFT loot boxes, which contained dynamic and rare Coke-branded NFTs, a friendship card, a vintage Coke cooler, and more hidden NFT surprises. The sales for this auction exceeded $1 million, with the goal of blending young audiences, brand nostalgia, and cutting-edge technology.

Celebrities like LeBron James, Paris Hilton, and Snoop Dogg all created celebrity-themed NFT artwork. Snoop Dogg released his NFT collection “A Journey with the Dogg,” which showcased his memories over the years. The NFT drop lasted only 48 hours, with the NFTs selling for hundreds of thousands of dollars. Similarly, Paris Hilton has created over 100 NFT pieces in her collection and has hosted a metaverse party on Roblox. LeBron James has started trademarking a number of names for downloadable NFTs to create footwear and athleticwear meta merch. Per the trademark filings, LeBron will be hosting events in the metaverse, connecting users to all things LeBron James, including virtual basketball gyms and recreational facilities.

Brands are also combining the popularity of the metaverse and NFTs to showcase their fashion and history. Louis Vuitton released new NFTs in its stand-alone mobile app game Louis: The Game, where users can dress up the brand-inspired avatar and learn about the brand's 200-year history.

Key takeaways
  • Virtual worlds provide brands with both a challenge and opportunity.
  • Virtual worlds provide an additional touchstone for developing consumer relationships through advertising.
  • Virtual world opportunities also present real-world legal hurdles, ranging from IP to SAG-AFTRA and other union obligations.
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