The Rise of Virtual Influencers

Virtual influencers started to get noticed on the North American viral marketing buzz scene in 2017 with the large Instagram following of Lil Miquela from the creative studio, Brud.

These virtual characters have their roots in Asia, which go back to the 2000’s. Virtual idols are computer animated celebrity singers.

The world’s most popular virtual idol is Hatsuni Miku from Japan. She was created in 2007 by the Hokkaido-based software company, Crypton Future Media, to sell their music software. She has gone on to be a brand ambassador for companies such as Toyota and Google and has performed in live venues around the world. She is booked to perform at the Coachella Music Festival in 2020.

The success of Hatsuni Miku did not go unnoticed in China. Shanghai HENIAN Technology created a similar virtual idol in 2012, Lou Tianyi, who became the top Mandarin music virtual idol. She was recently a brand ambassador for Procter & Gamble. She appeared in an AR performance to promote its feminie hygiene brand, Whisper, for the world’s biggest shopping holiday, Alibaba’s Double 11 day.

Fast forward to 2018 where the LA-based Riot Games, debut their virtual idol act, K/DA , at their Worlds event. The global audience of nearly 100 million viewers was larger than the Super Bowl. The K/DA “Pop Stars” music video has over 300 million views on YouTube as of this writing. “Pop Stars” single rose to #1 on Billboard’s World Digital Sales chart.

Another gaming studio, Epic Games, jumped on this trend in 2019 with a live in-game concert using the virtual likeness of EDM artist, Marshmello. He performed a virtual concert in its franchise game, Fortnite, to an audience of 10 million. This groundbreaking event demonstrated the potential of massively online virtual concerts and its associated merchandise.

In an article published by RADII, Raymond Zhang, Strategy SVP at Mogu, a Hangzhou-based fashion ecommerce platform explains why he likes virtual influencers, “The rewards are obvious. Virtual [influencers] can work nonstop, They don’t have any real ‘people’ problems, they can just be selling products and working 24/7”. It can be elaborated even further why virtual idols appeal to companies and governments as influencers is because they don’t carry the risks of drug and alcohol dependencies, public misbehavior, egos, or irrational desires to be loved by everyone.

Large companies have started paying attention to this trend and are getting onboard. iQIYI (market cap, $12.5B NASDAQ), the Netflix-style video platform spun out from the search giant Baidu, created their own virtual idol group, RiCH BOOM. They even went as far to discuss RiCH BOOM in their 2019 Q2 Earnings Call. For iQIYI, virtual idols represent a two-fold opportunity. The first is self-produced programming which has higher brand ad revenues than conventional licensed programming. The second is co-branding opportunities which iQIYI did with Tsingtao Brewery and RiCH BOOM.

Mediatech Ventures’ Collective incubator first cohort class featured a startup working in the virtual idol space. The startup is founded by a pair of veteran music industry entrepreneurs, Rob Campanell (Austin) and Ed Yen (Taipei). It intersects virtual fashion with virtual idols and social gaming.

Virtual influencers have been rising globally for over a decade. Audiences are spending money to see them “in-person.” Brands are signing them to endorsement deals. We can expect to see more virtual influencers start to take center stage and make their mark in the near future.