Free non-commercially available environment stock images can be found at HDRLabs
The first step is very important and involves getting the basic letters right. You need to choose a font that suits being made into 3D balloon shapes. The letters should have a decent amount of curvature – you don’t want them looking overly angular. You’ll actually only be dealing with the front of the letters, no extruded sides, so the letters need to be substantial.
Turn flat lettering into 3D shapes by using the 3D menu, choosing Repoussé, then Text Layer. Set the Depth of Extrude to 0, Inflate Strength and Angle to 0.4, at 90 degrees respectively. Also set the Mesh Quality to Best since you’re dealing with curved shapes. For the material set the colour to grey and use the lighting to add colour. Change the colours of the lights in the 3D panel to what looks good, here a mixture of greens and blues. Also put up the gloss and shine values to get a plastic look.
You’ll need to move the letters around while keeping them in the same 3D layer so that they interact via reflections and shadows. To do this choose 3D>Repoussé>Split Repoussé Meshes. In the 3D panel you can then select Filter by: Meshes to see the letters have been separated. Selecting each letter individually, move them into place using the Mesh Transform tools (not the Object Transform tools). Spend some time getting the positioning right as once you progress it will become difficult to remove them.
To add the little dimples with helium balloon surfaces use bumps maps. Here, black represents low areas and white represents high. Since you’ve split the meshes you have to treat letters individually. For each letter create an image that is basically just the flat letter in white and draw in small shapes in black that will become the dimples. Load these with the Edit the bump texture option in the 3D Material panel, adjusting the value to whatever looks best. The U Scale in the Edit Properties of the map might need to be adjusted so that the map aligns with the letters properly. This value depends on the size of the word – we’ve set it at 5.
Up until now you’ll have been working with the 3D render settings quality set to Interactive. This is fast but not suitable for the final image. You need to set the quality to Ray Traced Final. This will produce the correct reflections, anti-aliasing the letters. The process of rendering can take quite a while depending on how big your scene and how fast your computer is, up to hours at a time. You’ll see blue squares appear over your image while rendering, which will disappear when the process has finished.
What you achieve is letters that reflect each other, but nothing else, making it look like they’re sitting in a vacuum. You need to add an texture to the material, and environmental HDR image types are best as these give a full 360-degree image to reflect. To have better control of the reflections you’ll add them on their own layers. Duplicate the letters layer, setting their material’s Diffuse colour to black, adding environment texture. Reduce Gloss and Shine to 0 and set Reflection up to 85%. Change the blending mode of the layer to Screen.
To affect the relative strengths of the reflection in different parts of the letters you can use texture, just like the bump map. Here white represents reflection and black vice-versa. A map like this that creates stronger reflections at the edge looks more like shiny plastic in the real world. You can produce a map like this by simply using a copy of the original flat text layer, adding an Inner Glow Layer Style (fx). For better results, using Gaussian Blur to repeatedly blur two tones together produces a smoother result.
Adding further reflections can create a richer effect, simply duplicate the reflection layer you just created and change the environmental texture. Choose one that complements the existing reflections, setting the blending mode to Soft Light. Keeping the blending mode as Screen would simply increase the brightness too much and you’d lose all your detail. You can further control the blending of reflection layers by using the Blend If controls from the Layer Style panel (fx). By blending away the darker tones you can prevent the reflections becoming too heavy.
Having the balloons all the same colour is a bit boring so you should use adjustment layers to fix this. Gradient map layers set to a Soft Light blending mode are a good way to achieve effects. For more radical recolouring, away from the green we’ve used, start off with a Gradient map with a Normal blending mode. Layering more adjustment layers on top, you can control the exact balance of colours and light on each letter. Using contrasting tones for neighbouring letters helps increase legibility.