Creator economy outlook Part 2: The Metaverse & AI factor and rise of virtual influencers

The number of content creators has been rising exponentially. As per a recent Meta report, the global Creator Economy is forecasted to reach over $100 billion. Over the years, YouTube has emerged as a major platform for creators. According to a statement issued recently YouTube said that in 2021, its creative ecosystem had contributed over Rs 10,000 crore to the Indian GDP and supported more than 750,000 full-time equivalent jobs in India.

In this two-part report, Adgully deep-dives into the content creator ecosystem to find out the trends that will drive this economy in 2023, the engagement with brands on the one hand and with consumers on the other, the emergence of virtual influencers, and much more.

Also read:

Creator economy outlook for 2023 Part 1: Year of micro & nano influencers and innovation

Content creator as a brand spokesperson

When a content creator is being used as a brand spokesperson, they have to be part of the brand-building process, feels Nidha Luthra, Executive Director, Thought Blurb Communications. She further says, “It is imperative that the content generator is familiar with marketing concepts. I see more collaboration between marketing professionals and influencers in the future as a way to close that gap. While an influencer brings in the outside opinion advantage, the core values of the brand would still be guaranteed.”

While brands are active more or less on a few social media platforms, customers have their own preferences, Luthra adds. According to her, brands would have to go where the customers are and speak to them in their environment.

She cites the case of Instagram, where customer behaviour is very different from Twitter. “One of the critical challenges in social media will be to integrate brands onto multiple social platforms and shape communication according to customer behaviour on each. As 5G rolls in, I see more video content coming in. Also, user-generated content will grow, which is great for any brand. It increases consumer involvement with the brand and conversations within the consumer community. The goal would be to create ‘brand fan clubs’, rather than one-dimensional messaging from the advertisers,” she explains.

Ajit Narayan, CMO, Socxo, notes that search is going social – meaning, people are going to mainstream social apps like Instagram or Twitter or Facebook and TikTok (if in the US) to search for content they are seeking instead of just relying on a search engine. “A search on TikTok could throw more personalised results, plus these can also be filtered by engagement. Insta searches also become personalised to the person searching it and throw up results that are not just text filtered by format, but also by cultural nuances,” he adds.

Narayan further says that with the entry of YouTube Shorts, which is still being experimented with, and with their already set up monetisation engine, it would only need a few tweaks to establish a winning formula for video shorts. “Instead of relying on brands, creators can monetise their shorts soon enough and that would be a huge draw. From the looks of it, this seems like a no-brainer for emergence of self-monetisation, shoppable ads and so on, making this the biggest draw for the influencer community,” he says.

While influencers have been promising reach and impressions of their content, Narayan  adds, more and more brands are now asking for hard results as well, especially from the big buck influencers. “And this impact is a percentage swinging towards performance-based deals. So, the expectation of clients to deliver on certain metrics will impact the way remuneration is dished out. For example, there might be royalty-based deals which are long-term and depend on delivery of metrics over time instead of fee payments up front,” he adds.

Virtual influencers

Virtual influencers are yet to become mainstream in India. Angad Singh Manchanda, CEO & Co-founder, Chimp&z Inc, points out that AI and virtual reality technologies are here and they are here to stay.

He adds, “It’s a natural progression and we will soon see AI-based virtual influencers with well-rounded personalities in the coming years, how soon this change happens, time will tell if not in 2023. Going by how much we converse with voice assistants like Siri and Alexa, it’s clear that we want our AIs to be as human as possible. Several virtual influencers around the globe have managed to create just that. India is starting to catch on. Unlike the global market though, Indian brands are yet to reciprocate this excitement for CGI-generated influencers. As we see more development in the field, Indian brands will begin to warm up to the idea in the coming years.”

Virtual influencers are digital avatars or characters that are used to promote products and services online. They are often highly stylized and have their own unique personalities and back stories, says Ian Goh, Co-founder & CEO, Tiki.

The use of virtual influencers has grown in popularity in recent years, as they allow brands to create more engaging and immersive marketing campaigns. While some people see virtual influencers as a novel and innovative way to promote products, others have raised concerns about the potential for these avatars to blur the line between reality and fiction. According to Goh, for it to work in India, the virtual influencers should be able to understand the local culture of the audience and speak the language of the people to be mainstream.

Meanwhile, Danish Malik, Co-Founder and CEO, Boomlet Media, says that while virtual influencers are gaining popularity, will take time and technological advancement to become mainstream. He maintains, “Virtual influencers cannot replace influencers, given their limited capabilities and their inability to connect to the target audience at an emotional level. In 2023, we can expect more evolved virtual influencers to help brands at different levels, such as for one to one communication while helping with purchases.”

According to Nidha Luthra, the purpose of using influencers to market products is two-fold. The first is obviously to use their minor celebrity status to boost the brand. But then, unlike celebrity endorsements, the brand has no control over the messaging. The purpose of AI-powered CGI-generated virtual influencers is to correct this issue. “To me, this appears to be the tail wagging the dog. Creating a character is one thing. Making that character a popular star is in the court of the audience,” she adds. 

The Metaverse

There is no denying the fact that creators will have to evolve in the days ahead with the Metaverse, AI, etc., shaping the creator economy and influencer marketing sector in 2023.

“AI is here to stay and will become a household conversation in 2023. From art to communication to chatbots to digital influencers – it will all begin to show its true potential this year,” says Angad Singh Manchanda.

According to him, the Metaverse is something that we will see booming this year too. “It will be a big investment for most big brands this year and we can see the change in marketing budgets getting a little diverted to the Metaverse for sure. Both will be able to help massively shape the creator economy, we will see influencers who are upcoming experts in the Metaverse and tech category and they will continue to grow and find more support,” he notes. 

Adding further, he says, “We’re already seeing brands making use of AI-generated imagery and even chatbots. In 2023, we’ll see AI evolving and leading brands jumping onto the bandwagon to incorporate it within their communication. AI and artificially produced content, however amusing and exhilarating they may be, are also starting to ignite several debates. Apart from AI and Metaverse, audio will be playing a massive role in marketing and shaping the creator economy, podcasts and audio conversations will be on the rise and you will see a lot of influencers walking into the audio space with brands like Spotify, Apple and YouTube Music and audio.”

Ian Goh believes that creating a short video creator platform to connect creators with users is a Metaverse in itself. “In the creator economy,” he adds, “AI can be used to help creators generate and distribute content, as well as to analyse and understand their audiences. It can also be used to create new tools and technologies that enable creators to create more engaging and interactive experiences for their audiences.”

The year 2022 saw the rise of AI-based image, text and video tools, which can quickly generate text, visual images or videos-based on user-provided text descriptions, points out Ajit Narayan. “This sounds like an ‘Eureka moment’ for all creators, but it is still in the development mode and will evolve over time. It is a no brainer that influencers or creators are the first to jump on this bandwagon and test them out. In this age of hyper content, AI-based tools will only speed up the process,” he concludes.