Business ideas for 2021: Virtual influencers

Brands pay them millions to #advertise products to their adoring followers, but they’re entirely digital – could you get in on the virtual influencer trend in 2021?

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When social media influencers first came to prominence in the early 2010s, brands leapt at the opportunity to tap into the devoted audience of an authentic personality for a fraction of the cost of traditional advertising.

That’s what it was all about: real people endorsing products and services that they ‘genuinely’ used and loved to their followers.

Strange, then, that the latest evolution in influencer marketing is entirely artificial.

Yes, virtual influencers – realistic, computer-generated people – are giving the real thing a run for their money by racking up followers, taking part in brand campaigns, and making big bucks for their creators.

And just to be clear, there’s no deceit here. Everybody knows that they’re digital.

But what makes virtual influencers a viable business idea for 2021?

Want to read about more top business ideas? Check out the full list of the best business ideas for 2021

Why are virtual influencers a good business idea?

In order to understand the virtual influencer business opportunity, we need to understand Lilmiquela.

She’s your typical GenZ Instagram star. She likes posing in trendy outfits, shouting about progressive causes, hanging out with her friends at LA hotspots, and ranting about her ex-boyfriend Nick in overlong videos about how her life is falling to pieces. But she's entirely digital.

Created by Los Angeles-based ‘transmedia studio’ Brud, Lilmiquela is unquestionably the world’s most popular virtual influencer, with 2.8 million followers on Instagram and counting (there is a Brazilian virtual influencer with 4.2 million followers, but her reach is entirely limited to Brazil).

According to a report from OnBuy in August 2020, LilMiquela is estimated to earn around £6,550 per post for her creators, putting her (Brud’s) yearly earnings at something like £8.9m!

Her followers tell her that they love her, and even step in to defend her from body shaming. She’s also released music, graced fashion magazine covers, and worked with Vans, Prada, Chanel, Supreme, Calvin Klein, and Balenciaga.

In short, what we have is a completely controllable CGI influencer, who can’t be exploited or trolled, or wind up in some controversy, but who can still effectively promote brands to her following.

Virtual influencers don’t even have to look real. The world’s 10th most successful virtual influencer is Noonoouri. She has cartoonishly big eyes and doll-like proportions, yet she’s worked with Dior and Kim Kardashian, and is reported to earn her creator Joerg Zuber around £1,382 per post.

Let’s look at the stats. According to an October 2020 report from HypeAuditor – an AI-powered Instagram account authenticity checking platform – virtual influencers experience nearly three times more engagement than their physical counterparts, with females in the 18-34 age range by far the most likely to engage. And in the UK, InfluencerMatchmaker.co.uk claims that 54% of all consumers find virtual entities appealing on some level.

On the face of it, this seems bizarre. Why would people be more engaged with an openly fictional avatar than with a real person? Maybe because we’re all a lot more savvy and cynical about the nature of influencer marketing now – we know it’s not authentic. We know they’re being paid to endorse things they might have no interest in, so why not ramp up the artificiality by making the influencer artificial as well? At least it’s honestly fake.

There are, of course, some downsides to virtual influencers.

For a start, the upfront costs of building a realistic 3D model can be very high, not to mention the skills needed. And if you don’t get it quite right, you run the risk of entering the uncanny valley, that uncomfortable sensation people experience when they interact with something that’s not quite human enough.

Virtual influencers: Business opportunities

Let’s start with the most obvious business opportunity: you could create your own virtual influencer, or even set up a studio to conduct the whole operation of creating and managing influencers like Brud.

As discussed above, it’s not going to be cheap or easy. But if you’ve got the capital and the technical know-how (or you can find someone who does), then why not do it? Like with any business, you just need to find a niche.

One big advantage of creating a UK-based virtual influencer is that the market is currently dominated by the US. In fact, our research didn’t throw up any UK virtual influencers at all. Obviously, the cultural dominance of the US is difficult to compete with on the global stage. But your virtual influencer could exclusively work with British brands, and appeal exclusively to British consumer tastes.

Or what about a virtual influencer that doesn’t conform to the ‘norm’? Strangely, despite the limitless possibilities of a digital model, most of the top virtual influencers fit a pretty standard standard of beauty (even the cartoon rabbits). They’re all skinny, beautiful, and have perfect skin. You might say: “Well, why not? That’s what sells”. But why not create an ordinary looking virtual influencer – a body positive virtual influencer. After all, wouldn’t that be the most relatable thing of all? They could have all sorts of ‘imperfections’ that make them more ‘human’.

Another option, if you don’t have the skills or desire to actually create virtual influencers, is to start a virtual influencer agency to help creators find work and sponsorship opportunities with brands. Check out The Virtual Influencer Agency – which claims to be the world’s virtual marketing agency for virtual influencers and virtual campaigns – for an example of how this might work.

Virtual influencers: Insider opinion

Unsah Malik, a leading social media and influence expert, gives us her thoughts on the chances of success for a virtual influencer creator:

“If you do it right and do it well, yes I do see the potential in creators monetising their virtual influencer accounts. This is because it’s both a rarity and we’re seeing a growing, invested audience in this space. Anywhere you can build a community and have followers actively engaging in your content, you can very much monetise.

“The key for a virtual influencer to grow on social media is no difference to a human influencer growing on social media. Keep active, stick to a niche or even a sub-niche, move with the trends, find a level of consistency that works for you, stay on top of your content game, start conversations, create for your audience above your own needs, talk to your community, offer value people don’t see elsewhere, and use the platforms people would love to follow you on (TikTok and Instagram in this case).

“Be specific when pitching to brands, understand how they play the influencer game (just do a stalk on their feeds and tagged pictures), explain how your content will help both them and their audience, show examples or previous likewise content… and keep at it.”

However, Malik adds that virtual influencers may not always be the best brand representatives:

“On the brand-side, by creating the ‘perfect person’ inside a virtual influencer to act as a brand ambassador or the face of campaign, you're taking away from who your ideal customer actually is.

“So, a virtual influencer might be able to sell your brand values better, but there's no way your customer will be able to relate it to better than a real person using your product or service. Real people should be able to represent a brand better than a virtual influencer, because it’s a real human you’re targeting the product or service towards.

“Also, let's not forget that we've come a long way from the days of overly photoshopped models in a bid for perfection, so it’ll be a silly move to now create a completely fake version of a ‘perfect’ human to represent what you do and what you stand for.”

Louise Watson-Dowell, head of Digital at specialist B2B communications agency Definition, agrees:

“The key to effective influence is about creating trust above all. Whether an individual or a brand, this is what helps you convey expertise and authority to your customers, connections, and suppliers.

“People – real people – help create this trust. They are multi-faceted, challenging, changeable, impressionable, and fallible. These traits are not weaknesses – they can often be the core strength of your personal and professional brand, and elements completely lacking in a ‘virtual person’ – despite appearances and invented ‘scandal’.

“In reality, there is also genuine potential for use of a ‘fictional’ or ‘invented’ influencer to backfire – the market is new, and we don’t know who the creators of these are or exactly how they’re being created and gaining influence. We already have the real influencer, social media ads, and covert behaviour change campaigns in our arsenal as marketers, and this feels like manipulation on a new scale. It’s worth considering how much you, and your customers, would like to be a part of that.”

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Henry Williams Content Manager

Henry has been writing for Startups.co.uk since 2015, covering everything from business finance and web builders to tax and red tape. He’s also acted as project lead on many of our industry-renowned annual indexes, including Startups 100 and Business Ideas, and created a number of the site’s popular how to guides.

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