The article discusses the growing popularity and commercial viability of virtual influencers – AI-powered 3D avatars or fictional computer-generated personalities gaining recognition as social media celebrities.
Analysis for a layman:
Virtual influencers are fictional computer-generated personalities that have a consistent online presence through profiles, posts and interactions. They are created using technologies like computer graphics, 3D modelling, artificial intelligence etc.
Eg. Kyra and Naina are examples of virtual influencers gaining traction in India as digital-first brands like Titan, Realme etc engage them for promotional campaigns instead of human influencers.
Virtual influencers underscoring their rising value is a significant social media marketing trend reflecting India’s surging young demographic base highly engaged via interactive mediums like Instagram.
The exclusivities possible around unveiling virtual personalities coupled with novelty helps capture attention and recall which physical influencers may struggle to match consistently. This allows brands to experiment with new-age mediums while optimizing costs and controlling narratives.
However, lack of a distinct personality beyond the gimmickry and superficial sheen can limit depth of connection over time if content seems overly generic or repetitive. As Indian consumers get more discerning, success will depend on consistently delivering entertaining and intelligent content showcasing AI innovation itself through formats like podcasts.
Regulations will also need to evolve regarding transparency of paid partnerships, attribution of content creation etc to prevent unethical practices of masking advertisements which erode consumer trust. Responsible norms must shape this category.
Impact on Retail Investors:
For stock market retail investors, the strong traction for virtual influencers reflects India’s surging young base highly active on immersive social apps, receptive to new trends which can be monetized effectively at scale.
Stocks which stand to benefit directly or indirectly include social media platforms like ShareChat, short video apps like Moj and InMobi, gaming publishers like Nazara Tech, and digital advertising companies like Brightcom Group with offerings in influencer marketing.
Retail investors can also analyze stocks enabling creation of virtual avatars like graphic chip makers NVIDIA, AMD or software providers like Autodesk. Emerging Web 3.0 ecosystems around NFTs spanning art, metaverse games also revolve around creation of digital personalities attracting investments.
Impact on Industries:
The advertising and marketing industry gears for disruption as virtual influencers promise more novelty and customization at lower costs than physical celebrity engagements. Brand agility can be enhanced while mitigating risks around negative controversies.
However lack of personal connect factor and excess gimmickry also poses downsides. Responsible adoption through regulation, ethical frameworks will shape how this evolves.
Related industries in social media marketing, influencer aggregation platforms and digital content creation can see considerable activity. Adoption among banking, auto sectors indicates budget optimisation, segmented reach across metros and tier-2 regions using virtual personas.
Animation, gaming and Metaverse-enabling sectors also stand to gain significantly as virtual worlds rely heavily on creation of digital personalities and assets at scale needing specialized studios.
Long-Term Benefits and Negatives:
Wider public visibility for virtual influencers can progressively make Internet users more welcoming of human-AI co-creation across art, music, movies and culture culminating in hybrid ecosystems.
Responsible evolution of this category can pave way for more democratization where under-represented groups co-develop virtual personas as personal brands. The lowered time, cost barriers also help young talent take risks towards entrepreneurship.
However lack of regulations risks propagation of unethical practices, infringe rights of unique content creators. As virtual influencers permeate daily lives, they should adhere to legal standards around transparency, privacy protection applicable to human counterparts.
If poorly executed as short-term gimmicks lacking substance, consumer disenchantment can affect entire AI-human collaborative space. Ethical risks around manipulation of vulnerable groups through false endorsements also cannot be ignored.
Short Term Benefits and Negatives:
Virtual influencers can enable brands connect with Gen Z in a cost-effective, scalable manner leveraging interactive formats like Insta reels and podcasts. Marketing ROI can be optimized by customizing personalities and narratives as per campaign needs.
Content creation ecosystem including animators, modelers, game developers and studios can monetize in-demand skills as market expands with more brand partnerships. Entry barriers are lower enabling wider talent participation.
However lack of production capabilities creating refined, culturally relevant Indian virtual personas can initially limit traction beyond superficial reels. As competition increases, retaining distinctiveness will necessitate investments, resources which smaller players may struggle to access.
Rapid rise also risks market saturation unless players showcase ability to sustain interest of fickle online audiences beyond initial launches through intelligent messaging leveraging AI-based consumer insights. Regulations around ethical practices also lag presently.
Companies that will gain:
Creators of virtual avatars like Futr Labs, Avtr Meta Labs gain significant business visibility, helping them attract VC investors eyeing hot sectors like AI, Metaverse.
Digital advertising platforms like Brightcom, InMobi with influencer marketing solutions stand to gain from market expansion. Others include ShareChat (Moj), gaming publishers like Nazara Tech focused on young demographics.
Production companies specializing in animation, VFX like Prana Studios, Graphiti Multimedia can gain business from virtual persona and environment development. NFT ecosystem also likely sees tailwinds.
However gains for physical celebrities engagement dependent social commerce platforms like Trell, Meesho may be limited by emergence of virtual influencers over longer term.
Companies that will lose:
Human influencers, especially mid-level bloggers lacking uniqueness risk losing marketing tie-ups and followers over longer term as immersive virtual personas gain traction offering more novelty.
However top global and Indian celebrities with distinctive personal equity may continue commanding primacy and branding value. Responsible evolution focused on uniqueness can sustain appeal.
Here is a comprehensive list of companies that could be affected by the news article, along with a discussion of how the news article could impact market sentiment for each company:
|Virtual influencer companies
|Social media platforms
|Brands that use virtual influencers
|Companies that develop 3D-animation tools
Overall, the news that virtual influencers are becoming more popular is likely to be positive for the virtual influencer industry, social media platforms, and brands that use virtual influencers. It is also likely to be positive for companies that develop 3D-animation tools.
Emergence of virtual influencers represents an inflection point for marketing strategies tapping India’s digital native demographics. Their commercial appeal underscores rising consumer receptiveness to humanized AI personas across online cultures. Responsible adoption can accelerate innovation at the AI-human intersection spanning creativity, personalization and productivity.
Lohchab, H. (2023, November 29). Virtual Influencers Now Making Real Money? AI, AI, Sir!. Economic Times.