Virtual influencers are going mainstream—and brands can’t ignore them anymore
Virtual influencers, AI-generated avatars with massive followings, are becoming mainstream in brand marketing.
I was in Tokyo earlier this year, and while scrolling through Instagram, I landed on a very interesting page titled Imma.gram, a creator with over 380,000 followers. At first, she looked just like a regular influencer. But she was actually a virtual influencer.
A virtual influencer or a digital avatar creates content primarily around beauty, fashion, food, lifestyle and collaborates with brands too, just like a human one would. For instance, Brazil’s Lu is a pioneer in the business of virtual influencers, created way back in 2003 by Magazine Luiza, one of Brazil’s biggest retail companies. Today, she is a nearly-real person managed by ad agency Oglivy and has over 8.2 million followers on Instagram alone.
This virtual influencer trend is not new, but it seems close to hitting a critical threshold.
There are several reasons why a virtual influencer is appealing to brands. First, human beings are stupid, and they do stupid things. As comedian Samay Raina will probably agree, a few obscene comments can lead to the destruction of your brand. Adidas ended its collaboration with Kanye West after his antisemitic comments went viral. Virtual influencers are virtually guaranteed not to make such human errors. Second, digital influencers can engage with their followers 24/7, which human influencers cannot. Third, Generation Z, being a digital generation, is used to AI-led avatars and is confident with their presence. An app like Replika, where you can custom-build a digital friend or romantic partner, has over 30 million users globally.
In India, revenue from virtual influencers hit $167 million in 2024 and is expected to grow over 45% every year to $1.6 billion by 2030, according to market research firm Grand View Research. However, India accounts for only around 2.5% of the global virtual influencer market, as of 2023. Compare this to China, where nearly $16 billion worth of commerce has flown through virtual influencers in 2021, per the Economist.
Kyra is one of India’s first virtual influencers, launched in 2022, and has over 240,000 followers on Instagram today. There is also Naina-avtr with close to 400,000 Instagram followers. Major brands have tied up with them, including Boat, Realme, and Titan Eye.
It is now time for every brand to consider building its own virtual influencer ecosystem. But do the economics of using virtual influencers work? Absolutely, yes.
Economics and ROI
A global study by Influencer Marketing Hub found that 61% of marketers are planning to use virtual influencers in their campaigns next year. On average, virtual influencers have 3x higher engagement rates than campaigns featuring human influencers. Even in India, preliminary studies show that the engagement rates of virtual influencers are 3 times higher than those of human influencers.
A virtual influencer is 2x higher in terms of costs because of the high upfront development costs, as every scene is digitally created with 3D rendering software and motion graphics, whereas a human influencer just shoots a reel, and an ad is ready. A partnership with an Indian virtual influencer ecosystem with ~400,000 followers can cost about ₹3-5 lakh, whereas a similar human partnership is around ₹2-3 lakh. But the difference in engagement rates and the low risk to the overall business make the model absolutely worth the higher cost. Not to forget: you get 24/7 engagement and total control over content and creativity.
Still, there are certain risks that have to be considered.
There is a risk of the virtual influencer going rogue, risking brand safety. Besides, there is the looming threat of regulation with AI avatars—the need for disclosures, data management, and sensitivities while replying to followers' comments.
Yet, in the next 24 months, more and more companies will build their own ecosystem or partner heavily with existing ones
Culturally, Gen Z is comfortable with digital avatars. If you can romance an AI engine like Replika, surely you can be influenced by one. The next generation, Generation A (born after 2012), which has only grown up on social media, is likely to accelerate this trend and maybe even prefer it. Brands are likely to allocate around 5-15% of their marketing funds to building their own or partnering with virtual influencer ecosystems over the next few years around the world.
Finally, what about the threat of AI to human jobs? For now, no virtual influencer has replaced a human one in India, so it is unlikely in the short term.
But over the long run, who knows? To be honest, it might not be such a bad thing.
Sandeep Das is the author of Why Your Strategy Sucks and How Business Storytelling Works.
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