Fashion and beauty weeks, hosted in the metaverse return this spring/summer, given the popularity last year – the most well-known being hosted by Decentraland: Metaverse Fashion Week and (the new) Metaverse Beauty Week. Runway shows, pop-ups, immersive experiences, entertainment, prize draws/competitions and sampling and gifting events all feature with brands ranging from big names to niche beauty brands/fashion houses.

There are many advantages to getting involved, for example, for brands, the appeal is in marketing and gathering data on younger consumers. Although attendance and engagement is down from last year, these events are widely used by brands as a promotional play and a marketing tool, rather than a transactional one. It’s now well-known that there are various risks associated with using the metaverse, not least given the risks associated with availability and impermanence. Brands are also often hesitant about associating with these new and evolving technologies because of uncertainty (for example with crypto crashes, such as the FTX crash) and security and threat of hacking, which could significantly damage brand reputation. Now, more than ever, there is a need to engage with these technologies in a “clean” way to protect brands and conduct activities in a compliant way – here are some tips to better do this!

1. Use of your exhibition area/space 

Whether it be a virtual fashion house, or exhibition space, brands will want to make sure that they are protected in the metaverse and not associated with anything detrimental to reputation, including offensive, illegal or inappropriate conduct/material. Whilst platform providers may have “acceptable use” policies, brands should check the ability to enforce these and immediately report any offensive, illegal or inappropriate conduct to the platform provider whilst partaking in events and exhibitions. Selecting the well-known platform providers to showcase your brand, used by other well-known brands and businesses as well, can also provide brands with comfort.

2. Advertising rules – don’t forget that the old, established rules apply to the “new”

Following the ASA’s various guidance on advertising in the metaverse, it is clear that metaverse advertising activities is well within the scope of the ASA’s regulatory and enforcement remit. A negative ruling from the ASA, or a referral to the Trading Standards is all it takes for a brand’s reputation to be damaged.

Cryptoasset and NFT advertising has already seen regulatory enforcement action for various breaches of the CAP code, including misleading advertising and exaggeration. Metaverse adverts and associated activities could fall foul of the same rules, however the medium does present different risks in some areas. For example, given the nature and appeal to a younger audience and connections with gaming, particular rules should be given extra attention.

The immersive nature of the metaverse can make it more likely that adverts are not recognised as adverts in the usual way. Whilst displays are less likely to be mistaken, other content such as NFTs (in the form of clothing and other items) may not be as clear. Major fashion and beauty brands such as Louis Vuitton and Gucci seek customer engagement through the use of “advergames”, which can also present ambiguity to consumers about what is advertising and what is not, and all these mediums of advertising could potentially bring enforcement action for not obviously identifying marketing communications.

The rise of the “virtual influencer” and even “non-human” influencer collaborations with fashion labels also means that influencer marketing guidelines and rules will apply. These new methods increase the risk of misleading advertising and brands should think of creative ways to “#ad” adverts in this new environment where this new age of influencer advertising involves commercial collaborations at virtual events and exhibitions rather than traditional web2 social media posts.

Prize draws and competitions, offering a chance to win virtual and physical prizes, will also fall within promotional marketing rules. When conducting these, brands should ensure that terms and conditions govern such activities and that administration, winner selection and the distinction between “prizes” and “gifts” are made clear so not to fall foul of the CAP Code. Similarly, where gaming collaborations and “advergames” are used, in-game purchasing should also be governed by a clear set of terms and conditions and be careful not to unduly pressure users into making purchases.

3. Brand protection and the use of “clean” collaborations

Following Hermès’ win against artist Mason Rothschild in relation to the deemed infringement of Hermès’ trade mark of its Birkin bags through the creation of NFTs in the metaverse, other brands are also filing claims against cryptoasset creators. One way brands are seeking ways to overcome this contention is by actively seeking partnerships with gaming companies, platforms and creators to grant the relevant licenses and authorise such use under a commercial partnership. Not only does this avoid these sorts of disputes, but commercial partnerships with gaming companies can provide wider exposure for brands, in a way they can get comfortable with.