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The rise of virtual influencers: threats and opportunities for brands


Virtual influencers on social media are increasingly used by brands. Researchers at several institutions confirm the trend and point to opportunities and threats for brands. What are the effects of virtual influencers on engagement and brand trust? Are we heading to a future where influencer marketing will be virtual?

The market for virtual influencers is rapidly growing. With a market size of $ 4,6 billion and expected to grow 26% by 2025 virtual influencers show great potential for brands, writes marketing agency Territory Influence. In 2022, 35% of American consumers purchased a product or service promoted by virtual influencers, with 40% of them being Gen-Z and Millennials.Big brands have started campaigns with famous virtual influencers. Lil Miquela collaborated with Prada and Calvin Klein. Her estimated earnings per post (EEP) range from $ 6,056 to $ 10,093, according to a research article of the University of Padua. Virtual influencer Imma worked with Ikea,  Samsung and Porsche. Bermuda, with one of the highest engagement rates, collaborated with Chanel.

Virtual avatars that create online content
Virtual influencers are computer-generated imagery (CGI) characters that resemble humans, but do not physically exist in the real world. In terms of platforms, YouTube (28,7%) and Instagram (28.4%) are leading, according to a survey conducted by the Influencer Marketing Factory. Another study concludes that people like or comment on posts of virtual influencers almost three times more than on real human influencers.

On YouTube virtual influencers are called VTubers, a term coined by Kizuna AI, one of the first VTubers. She used the term to describe someone who uses a virtual avatar to create online content. But already in 2011, an English-speaking Japanese YouTuber Ami Yamato used a 3D animated avatar, as The Science Survey reports. VTubing exploded in popularity during the Covid-19 lockdowns and it is estimated there are now more than 16,000 VTubers worldwide.

The virtual lives of Lil Miquela, Bermuda and Imma
Perhaps the most successful virtual influencer is Lil Miquela. She was developed by Brud, a Los Angeles-based company. Although a virtual personality that doesn't exist in the real world, she has her own songs and behaves like she is real. She has been 'interviewed' by media such as Vogue and The Guardian. She describes herself as 'a musician, change seeker and drip robot'. She supports social issues such as Black Lives Matter. Time Magazine named her one of the Internet's most influential people in 2018, alongside Donald Trump and Kanye West. As part of the Milan fashion week she performed on Instagram for Prada.

Bermuda is another creation of Brud. According to the research article by Padua University she has the highest engagement rate of 7,29 percent among all virtual influencers. She partners with brands such as Chanel to promote products and services. She is also a rapper with tracks available on Spotify. Bermuda once hacked Miquela's account, gaining them both more followers and driving Miquela's account past the million followers. They were created by the same company and it is widely assumed that the hack was a marketing strategy by Brud to gain more attention.
Another famous virtual influencer is Imma, developed by the Japanese startup Aww Inc. Ikea inaugurated a new store in Tokyo with the help of Imma. She has also worked with firms such as Porsche and Amazon Fashion. Imma is known for her street style images with catchy poses. Sometimes she looks so real in photographs that it is impossible to tell she is a virtual character.

Opportunities for brands
There are several reasons that big brands choose virtual influencers to work with. The researchers of Padua University mention several opportunities for brands such as more flexibility, brand safety and brand innovation. Flexibility: Virtual influencers are completely adaptable to the wishes of a brand. Creators can place them at any place, at any time. A virtual influencer can give an interview at one place and moments later take part in a fashion show elsewhere in the world. Brand safety: Brands can customize virtual influencers to comply with their brand values. Only what is in line with the values of the brand will be published and nothing else. "Virtual influencers don't make mistakes, have scandals or personal problems. They can be exactly what companies want them to be and are completely controllable," says Oliver Zöllner, media scientist at Stuttgart Media University to Der Standard. Brand innovation: Especially younger audiences appreciate when brands are innovative and tech-savvy and present themselves in the form of creative and technologically advanced avatars.

Threats for brands
There are however also risks for brands that collaborate with virtual influencers. There may arise a problem of authenticity and trust. While real influencers often test products themselves, virtual influencers promote products they have not physically tested. The relationships that consumers may develop with virtual influencers could be limited, they could perceive a lack of human touch, which can harm brand loyalty. The Padua research team found that only 12 percent of people would trust a virtual influencer equally or more than a real influencer. 45% of the respondents stated they would trust virtual influencers depending on the context, 27% always less than a real influencer, and 15% said they would never trust them. People like to see virtual influencers supporting social issues such as civil rights. Only 15% would chat with a virtual influencer, 30% maybe, and 55% not.

Influencer Marketing Factory
A survey among Americans conducted by the Influencer Marketing Factory provides further interesting statistics of these virtual characters. Here are some of the key findings: 58% of respondents follow at least one virtual influencer. They mention several reasons: 27% of users follow virtual influencers for their content; 19% for the storytelling, 15% because they inspire them and another 15% for the music. How likely are consumers to trust a product advertised by a virtual influencer? The age group 35-44 years has the highest score (6,5 on a scale from 1 to 10), followed by age group 25-34 (5,8). And did they actually buy something? 35% of respondents confirmed they bought a product or service that was promoted by a virtual influencer.

Blurring the lines of virtual and real influencers

It is expected that on the long term real and virtual influencers will come closer together. It is likely that brands will further experiment with virtual influencers while at the same time collaborating with real influencers. As Hirokuni Miyaji, the creator of the virtual influencer Liam Nikuro, said: "The distinction between fictional and real influencers will become increasingly blurred in the future. Only the content will be important."

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