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Avatar-Based Influencer Marketing: Demystifying the Benefits

and Risks of Marketing Through Virtual Influencers

Chapter · June 2023

DOI: 10.4018/978-1-6684-8898-0.ch005

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Chapter 5
Avatar-Based Influencer
Marketing:
Demystifying the Benefits and Risks of
Marketing Through Virtual Influencers

Rohit Bansal
Vaish College of Engineering, India

Nishita Pruthi
Maharshi Dayanand University, India

ABSTRACT
In the digital era, the presence of consumers on social media platforms is increasing
at a higher pace than ever before. It pushes marketers to employ new ways to endorse
their products on these social networking platforms. One such digital marketing trend
is the use of avatar-based influencer marketing. Virtual influencers are computer-
generated influencers who have a large social media following particularly on
picture-based platforms such as Instagram. Avatar marketing has gained popularity
as a brand endorsement strategy. Despite the increase in popularity, there are very
few studies that study the effectiveness of avatar-based influencer marketing. This
chapter aims at demystifying the benefits and risks of employing virtual influencers as
a marketing gimmick. Data were collected from various secondary sources, such as
journals, books, theses, reports and websites using different databases like Scopus,
Web of Science, Google Scholar etc. Findings revealed that avatar marketing, if
utilized strategically, has great potential to optimize digital marketing strategy.

DOI: 10.4018/978-1-6684-8898-0.ch005

Copyright © 2023, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
Avatar-Based Influencer Marketing

INTRODUCTION

Virtual influencer marketing is one of the novel marketing strategies that have
emerged with the growth of digitalization. Although influencer marketing has been
around for a long time, it has really taken off in recent years. Influencers have the
ability to create trends and have an impact on people’s capacity for decision-making,
depending on their social rank and power (Bansal & Saini, 2022). Virtual influencers
are fictional people who have been constructed using computer graphics software
and given profiles to operate as influencers on social media (da Silva Oliveira,
2021). Virtual influencers typically have a sizable social media following, after
which companies and individuals “pay” them to advertise their goods and services
(Bansal & Pruthi, 2021). These digital influencers can connect with their followers
in a way that is comparable to how people communicate with one another because of
Computer-Generated Imagery (CGI), each with their own unique personalities and
sense of flair. Following are the some unique characteristics of virtual influencers:

• Cartoon characters and actual people serve as inspiration for virtual

influencers.
• Virtual Influencers may combine several original animation character
concepts.
• They are created and assembled by either a single person or a team of people.
• They lack the ability to think or be creative on their own.
• These influencers are brand entities that are occasionally produced specifically
for a given company and product.
• They are independent of the people who designed or created them.

Luxury fashion firms were the first to adopt virtual influencers as a trend. Margot,
Shudu, and Zhi were virtual models for Balmain’s fashion army in 2018. Shudu
Gram, a spokesperson for Fenty Beauty, has 231k followers. For Milan Fashion
Week, Lil Miquela, a perennial teen with 3 million followers, took control of Prada’s
Instagram. Afterwards, this industry is growing at increasing rate. This motivated
researchers to provide an overview of benefits and risks associated with employing
virtual influencers for marketing purpose.

Benefits of Marketing Through Virtual Influencers

• Total brand control: Working with virtual influencers gives brands the
opportunity to have complete control over their projects from inception to
conclusion, which is a huge advantage. Brand managers’ growing ability to
relinquish control and grant their content producers more creative license

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to incorporate brand messaging into their own storytelling and idiom is

amusing, but the emergence of virtual influencers has given brands and their
agencies more power once again. When virtual influencers are advertising
goods, there is no longer a chance that they would misspell your brand’s
name, post late, or forget the hashtag. This applies to the creative process as
well, which is customarily influenced. Marketing through virtual influencers
provide countless possibilities for creativity When it comes to virtual avatars,
there are many creative possibilities that feel practically endless because
they can be completely customized to a brand’s needs or even be created
to reflect the brand’s personality and values. Every aspect of a person can
be customized by brands, including their personality, looks, attire, hobbies,
age, gender, content style, and so forth. Their facial expressions can also be
altered to suit the brand’s needs

Figure 1. Benefits of employing virtual influencers

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Avatar-Based Influencer Marketing

• Potential cost-savings: Brands don’t need to hire personnel for hair and
makeup, rent studio space, or scout locations, production is typically simpler
and less expensive in case of virtual influencers. There is no need to travel;
hence there are no airfare costs. Virtual influencers do not have the hectic
schedule of their physical celebrity peers because they are totally virtual.
In fact, they are able to “travel” simultaneously to various picture session
locations. Additionally, once they’re popular, their content production costs
won’t increase along with their fan base. Also, they can be used indefinitely
because they never “wear out” or change.
• Appropriate for tapping younger generation: Working with virtual
influencers has many benefits, one of which is the chance to connect with
younger audiences. Influencer relationships could help businesses reach this
generation more successfully since it has been noted that younger viewers
seem to be particularly interested in this new media material. Brands have the
chance to interact with a younger, more tech-savvy, and more digitally native
audience by using virtual influencers. According to a study by Hype Auditor,
about 15% of their audience is between the ages of 13 and 17 and more than
half are younger than 24. Virtual influencers may also be able to help firms
smoothly transition into this new digital environment because these younger
Gen Z viewers may be the first to enter the metaverse. (Kukreti et al, 2022;
Bansal & Dadhich, 2013)
• Lower Risk of Controversy: The public will strongly criticize brand endorsed
by human influencers and brands internet reputation can suffer when one of
brands top influencers posting something wholly unconventional on social
media. A brand may fail due to this alone. Virtual influences don’t provide
the same risk, though. Brands have total control over what and how these
influencers communicate. By their social media posts, virtual influencers can
accurately and consistently reflect the brand’s identity and values and they
remove the risk of celebrity partners doing crazy things in real life since
virtual influencers are just well living in social media.
• Higher engagement: Virtual influencers can be easily incorporated into any
virtual setting because they are 100% computer-generated 3D personas. As
a result, users of the metaverse will be able to associate with their favorite
influencers there, which may increase their level of trust and open up new
possibilities for emotional relationships with brands. Compared to influencers
in the real world, virtual influencers appear to have higher engagement
rates. Given that there isn’t a lot of information available and since virtual
influencers are still very new, we need carefully analyze this information.
Yet, according to the same Hype Auditor research, computer-generated

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influencers had roughly a threefold higher engagement than conventional

influencers. (Ao et al, 2023; Bansal & Chaudhary, 2016)
• Potential for transmedia Storytelling: Using modern digital technology,
transmedia storytelling is the process of conveying a single story or story
experience across a number of different mediums. In this instance, the benefit
a virtual influencer provides is the capacity to move effortlessly between
virtual worlds. A virtual influencer can be recognized anywhere, whether it
be in a video game or an Instagram post. (Bansal et al, 2022)
• Available anytime anywhere: It’s also noteworthy that virtual influencers
have the exceptional ability to produce content constantly round the clock
because influencer marketing is a very content-driven marketing technique.
Virtual influencers are also available at all times because they do not age, do
not get sick and do not have personal ambitions.
• Suitable for niche customer segments: The business partners that are able
to target a particular demographic by working with an influencer whose
following base matches their target audience stand to gain from this constant
stream of material that could assist attract a growing customer base.
• Option of in-house avatar: Also, brands have the option to develop their
own internal virtual influencers. Virtual influencers are so compelling to
certain firms that they have developed their own digital personalities, like Liv,
a virtual brand ambassador for the motor company Renault. (Gupta, 2013)
• Consistency: Virtual influencers frequently follow a similar narrative, which
makes it simpler for them to discover a company that fits well with their style.
Virtual influencers adhere to a single theme.
• Huge fan base: The influencer fan base is yet another advantageous feature.
Online influencers operate similarly to human influencers. They have sizable
social media fan bases and brand communities of followers who are affected
by what they say and do. In order to reach their fan bases, brands seek to
partner with them.

Risks of Marketing Through Virtual Influencers

• Considered as unauthentic: Virtual influencers could not be regarded as

authentic or realistic. Many people are hesitant to use new technology because
they prefer the tried-and-true methods of interpersonal communication and
connection. A nonhuman being may also be challenging to relate to entirely
since they lack real-life backstories. Although it is fairly evident that they
have never tried and evaluated any of the goods and items they recommend, I
do worry if people will genuinely trust a virtual figure. As they aren’t actually
able to experience the products they are endorsing, virtual influencers present

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ethical questions (the taste of food, the feel and fit of clothing, the tingle of
skincare products). For example, if one of them suggested a product for hair
care or acne reduction, it would mislead consumers because these influencers
are unable to personally benefit from those items. (Schwarz, 2022)
• Unrealistic expectations: They might set unattainable ideals for lifestyle
and appearance. The harmful impact virtual influencers might have on
customers is another possible issue. It’s no secret that social media users
may already find it difficult to distinguish between reality and what they see
in Instagram photos that are picture-perfect. Thus, especially for teenagers,
following computer-generated avatars with almost heavenly attributes may
lead to increased pressure. For younger audiences, what appears to be an
avatar’s ideal existence (travel, money, and clothes) could foster unrealistic
expectations and undermine self-esteem. (Bansal et al, 2010)

Figure 2. Risks of employing virtual influencers

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• Risk of inconsistencies: There is a possibility of inconsistency. People may

pay even more attention to the details of avatars since they are aware that
they are fictional beings. It’s not enough for virtual influencers to appear
human and to lead normal lives; they also need to display emotional nuances.
Additionally, since these accounts might be managed by numerous engineers
or teams of social media professionals, errors could occur quickly. (Bansal &
Saini, 2022)
• Expensive: Companies may experience some difficulties as they attempt to
work with digital influencers because there are still few resources available
for doing so. Becoming a virtual influencer will involve a significant outlay of
time, money, and knowledge in the short term. One of the major entry hurdles
is the cost, which forces development teams to find new ways to cut costs.
• Time consuming: The process of creating content of virtual influencers is
time-consuming. Before publishing the finished product, graphic designers
and animators must plan, create, and test everything.
• Risk of Unanimity: Brands may have little control over the character they’re
collaborating with because they collaborate with a frequently anonymous
human who develops the content. Hence, companies should consider whether
using virtual influencers actually carries greater dangers than using their real-
world equivalents. Additionally, because businesses have complete authority
and influence over the avatars, it is critical that they create AI algorithms
ethically. Working with seasoned virtual influencers who have built a solid
reputation for themselves in the industry your business is in is one of the
greatest methods for preventing negative backlash that may cost brands time
and money to recover. Luxury business, for instance, seek for influencers
who have worked with other high-end companies in the past and have shown
that they can assist them in achieving their goals without causing any harm.
(Cowan, 2022)

CONCLUSION

Virtual influencers provide a list of benefits for brand marketers. It includes total
brand control, potential cost-savings, appropriate for tapping younger generation,
lower risk of controversy, higher engagement, potential for transmedia storytelling,
available anytime anywhere, suitable for niche customer segments, option of in-
house avatar, consistency and huge fan base. Brand marketers may restrict working
with virtual avatars because of varied challenges like considered as unauthentic,
unrealistic expectations, risk of inconsistencies, expensive, time consuming and risk
of unanimity. There are undoubtedly numerous advantages and disadvantages, but

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brands cannot ignore the emergence of creative virtual influencers. When organizations
wish to work with virtual influencers, it is crucial that they pick the ideal influencer
who complements their business and takes into account any potential challenges.

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