In this article, we explained the meaning of virtual influencer economy, the features, the examples, the challenges and the benefits.
Definition
The Virtual Influencer Economy refers to a growing movement where brands control computer-generated characters, known as virtual influencers, to promote products and services on social media. These virtual influencers engage with audiences and act as brand ambassadors, much like real influencers. The market for virtual influencers is experiencing significant growth, driven by advancements in AI and computer-generated imagery.
The Features of Virtual Influencer Economy:
The virtual influencer economy is a growing trend where digital characters, created using AI and 3D animation, generate content, engage with audiences, and collaborate with brands. Key features include:
Lack of Physical Limitations:
Virtual influencers don’t experience fatigue, age, or the inevitability of death, offering brands a reliable and cost-effective alternative to human influencers.
Customization and Control:
Brands have full control over the virtual influencer’s appearance, personality, and actions, allowing for targeted marketing campaigns and immersive experiences.
Unlike human influencers who have personal lives and require rest, virtual influencers can operate around the clock, providing constant engagement.
Potential for Higher Engagement:
Some studies suggest that virtual influencers can generate more engagement than their human counterparts due to their unique and often futuristic nature.
Seamless Integration into Virtual Worlds:
Virtual influencers can be easily integrated into metaverse environments, offering immersive and interactive experiences for consumers.
Cost-Effectiveness:
Virtual influencers don’t require real-life expenses like travel or accommodation, making them a more budget-friendly option for brands.
Reduced Risk of Controversies:
Unlike human influencers, virtual influencers are not susceptible to scandals or public controversies, reducing the risk for brands.
The Challenges of Virtual Influencer Economy:
- Credibility and Authenticity:
Lack of transparency:
It can be difficult to determine if a virtual influencer is genuinely representing a product or service, or if they are merely a tool for marketing manipulation.
Artificial intelligence and manipulation:
The use of AI to create and manipulate virtual influencers raises questions about the authenticity of their content and the potential for misleading consumers.
Impact on trust:
The lack of a real-life connection can make it harder for consumers to trust virtual influencers, potentially leading to decreased engagement and sales.
- Consumer Vulnerability and Ethical Concerns:
Data privacy:
The use of virtual influencers in the metaverse and other virtual spaces raises concerns about data collection and privacy, particularly for consumers who interact with these influencers.
Misleading information:
Consumers may be vulnerable to misinformation or manipulative tactics if they trust virtual influencers without fully understanding the nature of their relationship with brands.
Lack of accountability:
If a virtual influencer engages in unethical behavior, it can be difficult to hold them accountable, as they may not have the same legal and ethical frameworks as human influencers.
- Challenges for Businesses:
Measuring ROI:
It can be challenging to accurately measure the return on investment for virtual influencer campaigns, as engagement metrics may not always reflect real-world sales.
Finding the right influencer:
The virtual influencer space is still relatively new, and finding the right influencer with the right skills and experience can be difficult.
Potential for negative publicity:
If a virtual influencer’s content or behavior is controversial, it can damage the reputation of the brands they represent.
- The Need for Regulation and Education:
Lack of clear guidelines:
The virtual influencer space lacks clear regulatory frameworks and ethical guidelines, which can create confusion for businesses and consumers.
Need for consumer education:
Consumers need to be educated about the potential risks and benefits of interacting with virtual influencers, and how to evaluate their credibility.
Collaboration between stakeholders:
Collaboration between businesses, regulators, and academics is needed to develop effective strategies for managing the virtual influencer economy.
The Benefits Virtual Influencer Economy:
Cost-Effectiveness:
Virtual influencers eliminate expenses associated with physical influencers, such as travel, accommodation, and their time commitments.
Control and Predictability:
Brands have more control over the content and image of virtual influencers, reducing the risk of scandals or controversies.
Higher Engagement Rates:
Studies indicate that virtual influencers can generate higher engagement rates compared to human influencers, potentially attracting more attention to their brand and products.
Appeal to Gen Z and Millennials:
Virtual influencers are particularly popular among Gen Z and millennials, who find them fascinating and engaging.
Innovative Storytelling:
Virtual influencers allow for unique and innovative storytelling, creating captivating content that stands out.
Consistent Availability:
Unlike human influencers, virtual influencers are available consistently, allowing for more strategic and predictable marketing campaigns.
Reduced Risk of Misconduct:
Virtual influencers are not susceptible to the same issues as human influencers, such as scandals or controversies that could damage brand reputation.
Potential for Viral Moments:
Their unique and often futuristic nature can lead to viral content and increased brand visibility.
The Examples of Virtual Influencer Economy:
- V-E-G-A Virtual Avatars: Mascon describes V-E-G-A as AI-powered avatars that enhance brand experiences by humanizing brands and customer service in virtual environments. They can be used on physical totems, in personalization, customer service, and product presentations, and can even act as company representatives.
- Digital Avatars as Brand Partners: Brands like Adidas, Samsung, and Fortnite have utilized virtual influencers in recent campaigns. Stag well notes that these partnerships are becoming increasingly common as the metaverse advances.
- AI Influencers in Various Industries: AI influencers are being used in financial services, entertainment, gaming, online shopping, social media, healthcare, education, science, brand marketing, live broadcasting, and TV programs.
- Specific Examples:
Lu do Magalu: A virtual personality created by Brazilian retail brand Magalu, with 7.1 million followers, potentially earning a significant annual income from sponsored posts.
Shudu Gram: A virtual influencer used by Balmain, a luxury brand.
Imma: A virtual influencer used by Adidas, a sports brand.
CB: Another Brazilian virtual teen influencer representing Casas Bahia.
Conclusion
The Virtual Influencer Economy conditions to the growing singularity of using computer-generated or AI-powered characters to engage with audiences and promote brands on social media, much like traditional influencers. These virtual influencers (VIs) are gaining popularity and are disrupting the influencer marketing landscape.
READ: Virtual Reality in Education