The creator economy is made up of about 207 million creators worldwide, and this sector is predicted to grow 22.5% annually until it reaches $528.39 billion by 2030.
Brands and retailers are investing extensively in their influencer marketing strategies — and in many cases they are not only diversifying the types of creators they partner with but the vehicles they use to tell stories. As a result, eMarketer found that creators are also diversifying and generating more revenue across:
- Sponsored content: $8.14 billion, up from $5.12 billion in 2023;
- Platform payout: $3.23 billion, up from $2.34 billion in 2023;
- Affiliate marketing: $1.1 billion, up from $570 million in 2023;
- Merchandise: $450 million, up from $130 million in 2023; and
- Subscriptions: $270 million, up from $90 million in 2023.
Some of that diversification involves going beyond real-life influencers. The rapid evolution of artificial intelligence (AI) is unearthing a new era in the creator economy — one powered by virtual influencers. In June 2024, TikTok announced it would allow businesses to create their own virtual influencers — the latest in a series of investments the platform has made in this sector. Meta also has big plans, including building its “AI Studio” platform, which allows Instagram creators to create AI versions of themselves to interact with followers.
Are these virtual spokespeople making the space more competitive (or more lucrative) for real-life creators? According to author Sharon Gai, the answer is both. After all, there are two types of virtual influencers: completely new characters and digital replicas of real people. And both are carving their own unique spaces in the creator economy.
A New Kind of Storyteller
China was an early adopter of the first category of virtual influencers created as entirely new characters, according to Gai. “You design how they look, their speech patterns, their age, where they live — this entire storyline is birthed from a brand or influencer company,” Gai said.
Advertisement
For example, Tmall created AYAYI to be the (digital) face of the brand. Other virtual influencers, such as @lilmiquela, represent themselves and simply acquire brand deals and partnerships.
In the early days of the metaverse, we saw these young-looking, highly futuristic avatars break onto the scene, largely because they fit naturally into these highly digitized spaces. However, Gai believes there was another reason why these digital avatars swept onto the scene in China. In 2018 and 2019, there were many celebrity scandals, including the sexual assault case against rapper Kris Wu. Wu had many endorsement deals with brands ranging from Balenciaga to Coach, so when the scandal struck, it created a lot of risk for these brands, Gai explained.
Because virtual influencers can be fictitious, “they will never get into sexual harassment cases, say the wrong things or be canceled. They’re playing in a realm that’s very safe and controlled,” she added.
Celebrity Sponsorships at Scale
Virtual influencers are also being created as mirror images of real people ‑ largely celebrities, macro influencers and key opinion leaders. “Because we’re entering into this more efficient way of doing product placement and this new model [of creating content], it’s trained off of an actual human,” Gai explained.
For example, singer FKA Twigs created a digital avatar called AI Twigs to better manage her Instagram account and hold conversations with fans on her behalf. “In the past year, I have developed my own deepfake version of myself that is not only trained in my personality, but also can use my exact tone of voice to speak many languages,” the singer said in her statement to the U.S. Senate Judiciary Subcommittee on Intellectual Property regarding her fears surrounding AI. “I will be engaging my ‘AI twigs’ later this year to extend my reach and handle my online social media interactions, whilst I continue to focus on my art from the comfort and solace of my studio.”
FKA Twigs used the technology to prove how slippery IP can be in an AI-powered world, yet she is also benefiting from the technology. She can use her own physical likeness, the sound and tone of her voice, and even her vocabulary and word choices, to interact with fans at scale. She also has ownership over where, when and how this AI is used. Talent agencies like Creative Artists Agency (CAA), which represents major celebrities ranging from Chris Rock to Ariana Grande, are realizing these benefits and exploring how they can develop virtual avatars based on their already prominent (and profitable) clients.
Avatars Give Fans a Taste of the Celeb Interactions
Creating digital replicas of celebrities and other well-known personas ultimately leads to “a more accessible version of that person,” Gai said. “I don’t think it’s less authentic, it’s just another version of them. It’s their digital identity, and they were created with their consent, and they wanted to participate in creating an avatar of themselves to make themselves more accessible to the masses.”
Gai used Taylor Swift as a timely and powerful example. As one of the most in-demand artists in the world, Swift cannot interact with every fan at all times. However, an AI version can tap into her likeness to give fans the level of access and connection they crave with their favorite artist. Of course, every person is different, but Gai noted the feedback she has seen from consumers is largely positive so far.
“It depends on how receptive you are to this type of experience,” Gai said. If you’re chatting with one of these avatars on Instagram or TikTok, “you’re not actually chatting with them, you’re chatting with a chatbot version of them, which will be infused with their personality, maybe some –isms they say. It’ll seem like you’re chatting with them, but you’re not. Some consumers are fine with that; they’ll very much enjoy the experience of pretending like they are engaging with someone they fawn over.”
And of course, these celebrities also are profiting from creating digital avatars. AI enables connection at scale, so when they have a digital avatar, they can essentially be everywhere. Virtual influencers have yet to reach this level of adoption, but it’s never too early to prepare for the future — especially for celebrities and creators who cash in on their likeness. “They would rather they proactively do it than have a bad actor create a version and profit from their likeness,” Gai said.
