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The power of AI: How to leverage virtual influencers to power in-person retail

Published July 27, 2021

Virtual influencers 101: A guide for small and medium business owners

Influencers are more popular than they’ve ever been—the global influencer marketing industry is projected to grow approximately $13.8 billion in 2021. But, influencers aren’t perfect. They’re vulnerable to controversy and burnout. So what would it mean if you could control the narrative and behavior of an influencer? That’s where the virtual part comes in.

Virtual influencers are a rising trend in influencer marketing. Rather than real people, they’re characters whose personalities and behavior are entirely manufactured by teams of AI and marketing experts. While the idea of them may seem dystopian to some consumers, growing interest in virtual influencers could lead to a shift in where consumers focus their attention. To get ahead of the trend, here's everything you need to know as an SMB.

What are virtual influencers?

Virtual influencers are typically animated or CGI-based characters used in marketing as a substitute for human influencers. For example, Lil Miquela was created by Brud, an AI company. She boasts three million followers on Instagram, campaigns with Calvin Klein and Prada and makes a reported $8,500 per sponsored post.

And while virtual influencers may seem like a new phenomenon, they’ve actually been around for years. Hatsune Miku, a virtual musician, was created in 2007 in Japan and has released multiple original albums. She has been featured in ads for multiple brands, a more traditional method of incorporating virtual influencers.

The rise of virtual influencers is an interesting, if not slightly bizarre, development in the advertising and marketing industry. But like any new innovative marketing tactic, the use of virtual influencers has advantages and disadvantages for both brands and their fans.

Related: Ignore artificial intelligence at your peril

The advantages of virtual influencers

There are multiple reasons brands employ virtual influencers, including some of the following:

Brands can control their values and messaging. Values are an important part of a brand’s image, so it’s beneficial for brands to have control over what their virtual influencer “stands for” and says in their “personal” life.

And virtual influencers can be low-risk in comparison to their real-life counterparts, unlikely to have stirred up controversy that causes a negative reaction from fans. So, they don't have personal histories that could harm the reputations of anyone associated with them—especially the brands that promote them.

Take David Dobrik and the fallout around the ‘Vlog Squad.’ Dobrik is an influencer with 18.3 million subscribers on YouTube alone. A number of companies partnered with his brand, but those brands severed ties in the wake of controversy around conduct regarding him and part of his influencer circle.

There are no regulations around virtual influencers— yet. While there are discussions on the topic, nothing concrete has been created that specifically applies to virtual influencers.

Brands have more creative freedom with virtual influencers. Backstories can be modified to suit a brand’s values. For example, virtual influencers can skydive for a campaign where a human influencer might be too scared so there are more creative possibilities with virtual influencers. 

In addition, human influencers often need long breaks due to burnout. And then there is the matter of human’s aging which can cause brands to sever ties with them. Virtual influencers don't have this problem as long as there's a team to craft the story and image of the influencer to keep up with their followers’ changing interests.  

They simply cost less. On average, real-life influencers who have at least a million followers can charge over $250,000 per post. Going back to Lil Miquela who has over three million followers, you’d be saving $241,000 per post by going virtual with her promoting your brand.

Related: Global marketing trends

The downsides of virtual influencers

Brands risk making their audience uncomfortable, especially since the idea of virtual influencers is still new. Virtual influencers bring to mind the term “uncanny valley,” coined by Masahiro Mori, referring to the feeling of unease we get when confronted by humanoid robots. 

Virtual influencers can face challenges with authenticity. When people don't know that virtual influencers are, well, virtual, they feel betrayed. Forty-two percent of respondents in this study said they felt betrayed after finding out the influencer they follow is artificial. And more than half of the respondents agree they want to know who is behind a CGI influencer. There are also worries that the lack of authenticity might affect how consumers view a product. An influencer that really doesn’t have values or a belief system might not resonate with consumers.

Virtual influencer campaigns are not exempt from scandal. Calvin Klein’s campaign with Lil Miquela and Bella Hadid was met with accusations of queerbaiting. This is a marketing tactic common in entertainment, where a company hints at LGBTQ+ representation but doesn’t follow through. The company apologized for the campaign through a statement on Twitter.

Issues of racial and cultural appropriation have come up as well. Shudu, a black virtual influencer inspired by Sudanese model Alek Wek, was created by a white man. He has been accused of profiting off the image of a black woman. And the issue of a fake person of color taking space that could have gone to a real one is a common fear associated with virtual influencers.

Legal issues around copyright and trademarks. As much as there are no laws against virtual influencers, there are legal issues that businesses who want to adopt them will want to consider, such as who owns the rights to a virtual influencer.

3 ways brands have leveraged virtual influencers

Different brands leverage virtual influencers in different ways. Some brands use them as mascots or virtual assistants. Others are created by independent companies and can be used for different marketing purposes. Here are some virtual influencers and the campaigns they’ve been included in.

1. Marge, a virtual assistant for the Royal Bank of Scotland

Marge, a virtual assistant, was created for the Royal Bank of Scotland by a company called Soul Machines. The Bank uses the virtual assistant to field basic customer queries, freeing up the sales team to focus on delivering a better customer experience.

While she’s not an influencer by the traditional definition, Marge is a great example of the ways virtual characters can be used by non-entertainment industries. The company reported a 20 percent increase in their Net Promoter Score (NPS) after adding Marge to their team.

Another bank that using a virtual AI is ANZ Bank  used a virtual character named Jamie to respond to 12,000 customer inquiries in 100 days.

Related: From baby boomers to Gen Z: generational marketing insights to win with every consumer generation

2. Margot, Shudu & Zhi, models for Balmain

Balmain’s army of virtual influencers is comprised of three female characters—Margot, Shudu, and Zhi. They were created in collaboration with CLO3D, a 3D fashion design company.

They debuted in 2018 as part of a campaign to model the brand’s merchandise in 3D and are all very popular on social media.

3. K/DA, music group for League of Legends

K/DA is a group composed of four female characters featured in Riot Games’ popular game, League of Legends. They were originally created to promote the 2018 League World Championship and to sell in-game items. 


And the group has since developed a large fanbase, added a new member— Seraphine—and garnered mainstream media attention thanks in large part to their viral music videos and live performances.

4. Maya, influencer for PUMA

Maya is a Southeast Asian virtual influencer created by PUMA to market their Future Rider shoes in collaboration with Somin AI. The influencer was created specifically with the different cultures of Southeast Asia in mind.


In an interview with PRWeek, a representative of the team that created Maya, Didi Pirinyuang stated “The rise of virtual influencers is not an indication that they are human replacements, but rather, a form of escapism and fantasy that provides audiences with a canvas to project their voices, interests, and personalities.”

Should you adopt virtual influencers for your business?

Small and medium-sized business owners certainly need to understand emerging trends but should not feel the need to adopt every single one—and the virtual influencer trend is not exempt. Virtual influencers are still considered very cutting-edge and may not work for every industry. So whether or not you use a virtual influencer depends on what makes sense for your business.

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