7 Predictions for How Brands Will Use Virtual Influencers to Connect With Consumers in 2023

Here are seven predictions for how brands will harness the power of virtual influencers in 2023.

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By Patrik Wilkens

Opinions expressed by Entrepreneur contributors are their own.

Social media platforms have seen the rise of a new type of celebrity: the virtual influencer. And according to a recent survey, their market size is set to grow by at least 25% in 2023 alone.

The rise of virtual influencers has given brands new ways to promote their products and services while preserving their reputations. Virtual influencers — like Lil Miquela, Polar and the 34 others already verified on Instagram — have built up large followings around the world and will be used by brands to target specific demographics and sell products in niche markets. As virtual influencers become more widespread, brands will also use them to produce personalized and authentic content, create interactive experiences, host online events and run highly tailored influencer marketing campaigns.

These tactics, which are already used by companies such as Balmain and Prada, will help businesses engage customers and foster brand loyalty, ultimately resulting in increased sales and brand recognition.

Here, we'll look at seven predictions for how brands will use virtual influencers to connect with consumers in 2023:

Related: CGI-Created Virtual Influencers Are the New Trend in Social Media Marketing

1. Targeting specific demographics

Brands will use virtual influencers to target specific demographics, such as Gen Z and millennials, as they are more likely to engage with digital characters, with these demographics already making up 40% of all U.S. consumers who purchased a product from a virtual influencer in 2022. By customizing these virtual influencers further to fit a specific group based on their interests, brands can target a particular niche and will be able to more successfully and effectively reach their desired audience.

2. Promoting products and services in niche markets

Virtual influencers will be used by brands to promote goods and services in markets like music, gaming and esports, where virtual characters are already well-liked. As a result, businesses can connect with a group of consumers or a community that is highly engaged and already interested in the advertised goods or services. Additionally, it enables businesses to produce bespoke content, leading to more successful marketing campaigns.

3. Developing interactive experiences

Brands will use virtual influencers to develop interactive experiences that engage customers and foster brand loyalty. For instance, virtual try-ons allow customers to see how a product would appear on them while engaging with the brand and directly with the virtual influencer in a digital environment. By doing this, businesses can connect with customers more deeply, forging genuine connections and increasing the likelihood of making a sale.

4. Designing "authentic" content

Brands will use virtual influencers to create "authentic" content that aligns with their values and resonates with their target audience. Such content may seem at odds with the nature of virtual influencers as they are not actual individuals, but as Paul Urwin at Big Box Content puts it, "authentic" content is simply about "the story behind the product."

As such, virtual influencers' personal experiences, daily routines and behind-the-scenes content are examples of content that brands can invent, design and then use to establish a more genuine connection with their audience.

Additionally, brands can encourage audience trust and loyalty by showcasing both the company's and the virtual influencer's values and beliefs. As Schaunagh Gleeson mentions in her article for The Drum, virtual influencers "can be used as a complete visual representation of a brand and its values and are also under the brand's control."

Related: The Metaverse and Digital Avatars: Is This the Future of Communication and Branding?

5. Creating branded content series

Brands will extend their production of content to turn virtual influencers into stars of their own branded content series. For example, a clothing brand could create a virtual influencer named "Fashionista," who would star in a series of videos on the brand's social media channels. The series could showcase "Fashionista" styling different outfits and discussing the latest fashion trends while promoting the brand's clothing.

This would allow the brand to connect with consumers in an engaging, entertaining and relatable way while also promoting its products in a more subtle and authentic manner.

6. Hosting virtual events

To engage consumers and foster brand loyalty, brands will employ virtual influencers to host virtual events like live streams. These allow brands to reach a global audience and create a sense of community among consumers. They can be virtual meet-and-greets, virtual Q&A sessions or virtual product launches that let customers communicate with the influencer and the brand in real-time.

In addition, virtual concerts and festivals for both real-life and virtual artists are becoming increasingly popular. For example, Polar, the virtual popstar, drew in more than 2.2 million total visits to her in-game stage during her metaverse launch, resulting in her fans spending a combined 100,000 hours experiencing the unique event. In addition, the unique experience translated into 1 million views in fewer than 19 days on the YouTube music video of Polar's launch track, Close to You.

7. Launching influencer marketing campaigns

With the market size of the virtual human industry expected to reach $42.4 billion by 2030 in China alone, there is no doubt that brands will work with virtual influencers to develop marketing campaigns that boost sales and brand recognition.

Marketing campaigns involving virtual influencers can broaden a brand's audience and impact by incorporating sponsored content, product reviews and partnerships with other online influencers. These campaigns are likely to be highly successful, given that virtual influencers attain close to triple the levels of engagement their human counterparts achieve. For instance, according to a recent survey by the Influencer Marketing Factory, 58% of respondents already follow one or more virtual influencers, and over a third have purchased something these influencers have promoted.

Despite this, virtual influencers can still work in tandem with real-world influencers to reach a larger audience and forge a more genuine bond with customers.

There's no doubt that the rise of virtual influencers is a development that is here to stay. In 2023, brands will likely use virtual influencers more frequently to enhance their reputation, develop innovative marketing campaigns, and most importantly, connect with consumers in ways never before possible.

Related: 3 Marketing Trends You Need To Look Out For

Patrik Wilkens

Entrepreneur Leadership Network Contributor

Vice President of Operations

Patrik Wilkens is Vice President of Operations at TheSoul Publishing. Patrik supports TheSoul's expansion and rapid growth by building brand partnerships and setting long-term and short-term operational strategies.

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