By Timothy


The Rise of the Robot Influencer

In October ’94, the first banner ad hit the Internet. It was a small, low-res black rectangle with multicolored text and the foreboding phrase, “Have you ever clicked your mouse right here? You will.”

Banner Ad - Virtual Influencers
Image credit: Fast Company

According to FastCompany, the ad was commissioned by AT&T, and placed – for about $20,000 to $30,000 – on the ‘leaderboard’ spot of Wired magazine’s then-digital propertyHotWired.

From the perspective of the modern advertiser, the creative looks a bit like something a Bond villain would buy – if Bond villains bought banner ads – but back then, it was surprisingly intuitive: the colorful letters were meant to stand out from otherwise grayscale content, and when a reader clicked, they were treated to an interactive brand experience that didn’t directly sell anything.

What followed has led to a $140 billion online advertising industry and the rise of companies like Facebook, Google, and Amazon. The same industry that – ahem – sells and displays ads that 70% of people dislike.


The Next Big Thing

The AT&T ad shown above yielded a 44% click-through rate in 1994. Today, the average CTR across all placements and formats is 0.05%. At first glance, you might think that advertisers no longer believe in display ads, but they’re spending more than ever on the medium – thanks in part to analytical techniques that offer a more appropriate and accurate ROI model than click-through alone can provide.

That said, brands have understood the benefits of omni-channel (something about eggs and baskets) for some time, rounding out their portfolios with pay-per-click, social, native, online curators (e.g., Uncrate) and collaborative content. For a time, the brands that could afford to purchase celebrity endorsements did so, only to discover that in some cases this practice – which had worked so well in the halcyon days of yesteryear – wasn’t so hot in an economy that was beginning to reject paid endorsements.

Enter Influencers

Influencer marketing frames endorsements in the context of a content-driven, often platform-dependent marketing campaign such as an Instagram story or Facebook Live event. Rather than rely on a widely-known celebrity, brands engage or collaborate with individuals that have a smaller but theoretically more powerful influence on a hyperlocal audience. Influencer marketing is therefore democratized in the sense that unlike professional athletes, ordinary people can (with the requisite passion and skill) become an influencer within a community of likeminded people. Further, since ‘smaller’ brands can engage with ‘smaller’ influencers at a lower cost, endorsement marketing became viable for businesses both big and small.

Influencer marketing plays on the psyche differently than traditional endorsement marketing. In the latter model, consumers might be led to purchase a product because of its tribal association with a favorite team or celebrity as observed through a direct advertising medium (e.g., a billboard that advertises a bank as the official institution of the local team). In the influencer model, the act of persuasion can be much more discrete and personal because influencer content is largely opt-in rather than pushed directly to the consumer. Put differently, people usually follow the influencer and consume their content by choice. Because that relationship is thought to be more authentic, brands hold a lot of faith in influencer campaigns.

Reality Strikes

Here’s where theory spars with practice.

First, whereas ‘celebrity’ has a generally-accepted definition that limits its use, ‘influencer’ does not: just about anybody can label themselves an influencer within a certain category. This has given rise to a number of ‘influencers’ whose business models and practices are opaque at best. Brands are therefore challenged to analyze many factors when selecting an influencer, including their number of followers relative to the size of their community and the quality (as measured through engagement) of the content that they publish.

From the brand’s perspective, influencer endorsements are often non-standard compared to those that include celebrities. Unlike a celebrity that has agents and counsel, influencers might work with brands directly to flesh out the details of their campaign. Some brands may prefer direct engagement with the content producer and talent, whereas others may prefer a more predictable manner of conducting business.

If brands feel limited by the organic reach of a particular influencer, they might elect to promote their content to reach a wider audience. The problem with this strategy is that it relies on either the brand’s own audience-widening heuristics (e.g., to a pre-defined demographic matching their target audience) or the platform’s algorithms, neither of which may be accurate. Worse still, an influencer’s ability to – well, influence – somebody outside their own purview (even if that person is a brand customer!) is unproven. In these cases, a different ad entirely might be more effective.

The Rise of Virtual Influencers

According to an Oxford University study, 47% of U.S. jobs are at risk of automation. Until recently, most people probably assumed that the work performed by models, spokespeople, and online influencers is at a relatively low risk of automation. Not so fast: meet virtual influencers.

Yes, that’s a mattress-loving, chicken-slinging virtual Colonel Sanders just ‘doing his thing’: he might not be what 2019 asked for, but he’s what 2019 deserves.

The concept of virtual influencers is meant to assuage the risk of rogue celebrities, to formalize the process of engaging with an influencer (the virtual Colonel even has a media kit), and to theoretically reach a wider audience while preserving a targeted message by leveraging heavy advantages in both flexibility and speed. It’s an attractive proposition: these perfectly-manufactured brand ambassadors are less regulated than their human counterparts but can connect with customers by the thousands every hour of every day. Moreover, virtual influencers don’t require extra takes, they take nothing personally, and they’re more or less predictable.

But these avatars aren’t human, so how can they be trusted to make peer recommendations? Put another way, how can an entity without free agency credibly recommend products to another with choice?

We proposed a similar challenge to Alexa and Siri before welcoming them into our lives: “how do you know where I want to go?” and they responded by being useful and pertinent in the moment.  In 1998, Gorillaz gave rise to virtual hip-hop – will virtual influencers do the same in fashion, and are we comfortable supplanting human beings with robots in yet another area of our lives?

There aren’t any easy answers for brands, especially when you begin to assess the value of real influencers with robot followers against virtual influencers with human followers. After all, if audience engagement is the ultimate metric, then does it matter (from the advertiser’s perspective) whether the influencer is a human, robot, or Shiba?