This Week's Digest: Feb 10

Happy Friday! It’s Kuba. Welcome to Web3 Marketer newsletter where I summarize top web3 stories across brands, loyalty, and commerce. No crypto-jargon, just exec summaries.

Top headlines this week:

1. ?? Hermès wins NFT trademark trial, and sets precedent for brand protection
2. ?? Reddit continues onboarding millions of mainstream users with collectible avatars for Super Bowl LVII
3. ?? Advertisers are moving away from hard-to-measure web3/metaverse campaigns

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??Top Story: Hermès wins NFT trademark trial

How it started:

1?? Hermès sells very iconic and expensive physical Birkin bags, which retail from $12,000 to close to $200,000 apiece

2?? In 2021, an artist, Mason Rothschild, created 100 digital “Metabirkin” NFTs, which parlayed Hermès’s Birkin handbag into a digital collectible, but covered in colorful, cartoonish fur instead of leather

3?? Rothschild sold out the NFTs, after an extensive marketing campaign through his social media and website, for around $450 each, but their resale value rocketed to tens of thousands of dollars (he netted an amount of crypto worth today ~$90,000, which was worth ~2x more back then)

How it played out?

? A Hermès sued, stating that the Birkin-like images, and associated NFTs, infringe on its trademark protections (the brand also revealed this was interfering with its own plans to release NFTs)

? Rothschild claimed that the works were “artistic commentary” protected by the First Amendment of the US Constitution (akin to Andy Warhol’s famous prints of Campbell’s soup cans)

? Hermès won in a New York court after an eight-day trial, and was awarded $133,000 in total damages

Why this matters?

? The court acknowledged that a big part of luxury brands’ business model is production of a status symbol. In fact, such status symbol may be as valuable to a consumer as much in the real (leather) as in the digital (metaverse) realm, or actually - more

? The ruling implied that NFTs perform a function beyond an “artistic commentary” or computer images that imitate Birkin bags

? This sets up an important precedent on virtual trademark protection, encouraging brands to expand their trademarks into the virtual world and leverage the digital collectible primitive both as an engagement tool and a new asset class for their communities

?? Chart of the Week: Reddit collectible avatars?

Reddit, a prominent chat-based social network, pioneered the use of blockchains and NFTs in deepening engagement within its communities:

• To-date, Reddit’s “Collectible Avatar” NFTs have been minted by over 4 million unique users.
• The key to its success was not mentioning blockchain or NFT anywhere (Reddit calls its NFTs “digital collectibles”), avoiding any connotative toxicity which could stymie adoption.??
• 2023 will see prominent companies continue to adopt this strategy of “blockchains on the back-end, not front-end”, leading to a smoother adoption curve for their consumers.

Source: Pantera Capital monthly blockchain letter

Why this matters?

• Reddit pioneered onboarding mainstream to web3 by abstracting away the jargon and technicality; in the short span of time it has already become a blueprint for brands tipping their toes in NFT space
• Reddit is demonstrating sustained growth in onboarding users to web3, by launching successive activations and big brand partnerships, such as Super Bowl LVII most recently:

??? Stories This Week

?? Consumer & Mainstream

Retail / eComm:

• Samsung Germany, Amazon, and Ledger (hardware wallet) are launching a three-way promotion for the upcoming Galaxy S23 phone by deploying a free digital collectible drop (LedgerInsights; LinkedIn)
• eBay is looking to hire web3 specialists for its NFT platform KnownOrigin, which it acquired last year (TheBlock)
• Walmart has filed trademark applications for the Sam’s Club name and logo claiming plans for NFTs + blockchain software, V/R healthcare, and more (Twitter)

Loyalty:

• airBaltic, a Latvian airline, is expanding its loyalty program to offer opportunity to acquire the top-tier VIP status, by owning 25 NFT collectibles (Airlinergs)
• Wow Bao, a fast casual operator of 700+ dark kitchens, plans to connect its loyalty program to web3 (QSRMagazine)
• India-based Almond Solutions, a B2B SaaS company, has announced to gift ESOP options (Employee Stock Ownership Plan) to its employees in the form of NFTs (BizzBuzz)

Metaverse:

• Samsung is working on its own metaverse and extended reality devices, hinting at the possibility of the launch of a VR headset (Bitcoin)
• Saudi Arabia agreed to collaborate with The Sandbox platform on metaverse projects (TheBlock)
• Doritos launched a three-day metaverse experience, including giveaways with over $25,000 in prizes, including custom gaming PCs and digital collectibles (Twitter)
• Meta pursues teen users as Horizon metaverse app struggles to grow (WSJ - paywall)
• Nokia is leading the way in industry, construction metaverse with ‘digital twins’ of physical entities (NFTNewsToday)
• [POV] How the metaverse will revolutionize K-12 and higher education, enabling moving from flat media to first-person perspective (BigThink)

Other:

• Japan’s Prime Minister Fumio Kishida confirmed his support for the digital collectibles development in efforts to revitalize regions and promote “Cool Japan” (Cointelegraph)
• Roofstock, a property technology company, has completed its second on-chain property sale via NFT for $180,000 (Blockworks)

?? Fashion & Luxury Goods

• Chloé will launch its upcoming collection with digital IDs linking to product and material information, repair assistance and 'instant resale' options (VogueBusiness)
• Sarabande Foundation artist launches phygital garments in Selfridges luxury department stores, which come with a digital twin wearable in metaverse and games (FashionUnited)
• Fashion brand Pinko launches its first metaverse store (MMM)
• Zero10 is launching AI-enabled tool that helps users create AR fashion (VogueBusiness)

POV:

• How creatives are using web3 to revolutionize the jewelry industry with authentication and post-sales experience (JingDaily)
• With growth top-of-mind, luxury brands focus on digital goods and virtual experiences (RetailTouchpoints)
• How the metaverse is helping fashion brands improve customer interactions (Venturebeat)

??? Entertainment & Media

• Rihanna & producer Deputy are dropping their hit single track as a digital collectible for $210 a piece, entitling holders to 0.0033 % of the song’s streaming royalties (NFTEvening)
• Disney Star to debut its metaverse platform Starverse in India to assist improving its online sports fan experience (Afaqs)
• Andrew Lloyd Webber's new musical, Bad Cinderella, is launching digital collectibles to engage fans with the show (BroadwayWorld)
• File-sharing service WeTransfer, frequently used by creatives, enters partnership to allow users to share their digital assets and efficiently collect royalty payments (Coindesk)
• Celebrity influencer Logan Paul faces class-action lawsuit raising funds for an animal-themed NFT game that “never existed” (Decrypt)

POV:

• Can music NFTs drive more Spotify streams? Early signs say yes (Twitter)
• How metaverse will change the publishing market (Forbes)

? Sports

Super Bowl:

• Reddit launched free official collectible avatars for Super Bowl LVII (Reddit)
• The NFL has partnered with Roblox, a massive-multiplayer gaming platform, to launch a free virtual Super Bowl concert featuring artist Saweetie (SportsProMedia)
• This year’s Super Bowl commercials will be crypto-free (Vox)
• Manchester City teamed up with OKX, a crypto exchange, to launch a sports metaverse campaign, offering fans web3 experiences with bespoke content, rewards, and others (XRToday)
• UFC Strike, official digital collectibles with video highlights, will be launching a collectible-enabled game in Q2 2023 (Twitter)
• Warner Bros. Discovery Sports is launching a blockchain-based trivia and fan rewards program on ‘Inside the NBA’ on TNT broadcast (SportsBusinessJournal)
• [POV] How NFTs are changing the game for professional athletes (Forbes)

??? Web3 MarTech

• Advertisers continue to make space for experimental budgets despite macroeconomic uncertainty - betting on streaming channels, and moving away from web3/metaverse (DigiDay, LinkedIn)
• Ex-App Store Director: 'Apple had a problem with crypto from day one’ (…) guidelines are crafted to be intentionally opaque (Decrypt)
• [Watch] How to succeed in web3 marketing - an expert panel (YouTube; 31mins)

???Deals

• Sesame Labs raised $4.5M seed funding to help improve web3 marketing with a campaign management platform, advertising network and CRM tool (Techcrunch)
• Cohort raised €3.2M seed funding to offer brands an NFT-based turnkey loyalty solution (Cohort)
• Courtyard raised $7M seed funding to offer digital certificate of a physical asset in the form of an NFT, with the underlying asset securely vaulted and insured (LedgerInsights)
• StoryCo raised $6M seed funding to build a token-gated storytelling platform where fans and creators join forces to build media franchises (NFTGators)
• Arpeggi Labs is seeking to raise $11M post-seed funding to enable individuals to create music and mint it as an NFT (TheBlock)

??? Weekend Reads

• If all goes right: on the promising future of tech [growing exponentially] (Curious Addys)
• How new technologies and economic systems move us towards storing value in digital objects (Twitter - thread; Medium - full article)
• [Watch] Keke Palmers explores the metaverse with ‘Are We There Yet’ with experts, educators and creators in this short series (YouTube)

??? Meme of the Week

Disclaimer: This newsletter is purely for educational purposes and is not financial, tax, or investment advice or a solicitation to buy or sell any assets or to make any investment decisions. Please always do your own research. The author may hold tokens or digital collectibles covered by this publication (albeit he may be depressed about performance of his portfolio to date). The author is also employed by ConsenSys, Inc. (building?really cool products) and all views expressed in this publication are his own.