From Pixels to Profits: How Virtual Influencers are Rewriting the Rules of Fame, Commerce and Authenticity, Part 2

READ MORE: From Pixels to Profits: How Virtual Influencers are Rewriting the Rules of Fame, Commerce and Authenticity — Part 1 (NAB Amplify)

As virtual influencers continue to multiply in the marketing space and prove their economic might in the music industry and beyond, the question looms: What’s next for these digital disruptors?

Part 1 explored the rise of virtual influencers in South Korea, their impact on the music industry, and some of the ethical concerns surrounding their human-like personas. In this second installment, attention is directed to Japan, where a groundbreaking TV commercial featuring an AI model has ignited a nationwide dialogue on the future of both advertising and entertainment. From the innovative utilization of AI in Japanese advertising to the strategic incorporation of AI-generated personalities in China’s e-commerce landscape, the far-reaching impact and ethical complexities of virtual influencers cannot be denied.

Japan’s AI Revolution Hits the Airwaves

Japan has aired its first-ever TV commercial featuring an AI model, sparking a nationwide conversation about the future of advertising and entertainment. The commercial, produced for Japanese tea brand Ito En’s Oi Ocha Catechin Green Tea, carries a forward-thinking message, “The time to change the future is now!” and features a woman who starts drinking the beverage so she can live a healthy life in the future. The woman, an AI model, ages over the course of the ad as she is depicted skipping around, drinking the tea and smiling.

“We weren’t intending to create a commercial personality with AI,” a company spokesperson Ito En explained to Shiho Fujibuchi at Japanese media outlet Mainichi. But the company determined that using AI would be the “best way” to age a character 30 years into the future.

The artificial character was created by Tokyo-based developer AI model Co. by training an AI model on a large number of faces, after which designers and other artists made changes.

READ MORE: ‘Will AI replace performers?’: Japan-first TV ad with artificial model draws attention (Mainichi)

On social media, some users made comments pointing out the lifelike features of the spokesmodel, Bryan Ke reports at NextShark, but others were more critical. “Yeah, the technology is impressive and all, but realizing ‘This person doesn’t really exist’ makes me feel sort of empty inside.”

READ MORE: Japanese tea company uses AI model to promote new drink line (NextShark)

While the commercial has been largely well-received, it has also raised questions about the ethical implications of using AI in media. Some are wondering if this could be a “scandal-free future,” given that AI models don’t come with the controversies that sometimes plague human celebrities, Casey Baseel observes at Japan Today.

“With AI models, there’s no risk of them getting involved in scandals,” one comment on the video read.

“If you’re upset about companies using AI models, you should complain to celebrities who cause scandals,” read another.

“Japanese celebrity endorsement marketing is almost entirely focused on the spokesperson’s image,” Baseel writes. “So when that image becomes sufficiently cracked, it has the potential to take the entire promotional strategy down with it, and it wouldn’t be a shock if the advantage of being able to opt out of all those risks is part of why Ito En is going with an AI model this time.”

READ MORE: Japanese tea commercial actress created by AI, has some wondering if it’s the scandal-free future (Japan Today)

The E-commerce Revolution in China

In China, the world’s largest e-commerce market, virtual influencers aren’t just a trend; they’re a business strategy. These AI-generated personalities are becoming increasingly prevalent, especially in the realm of livestreaming. But what does this mean for human influencers, and what’s next on the horizon?

“Today, livestreaming is the dominant marketing channel for traditional and digital brands in China,” Zeyi Yang notes in the MIT Technology Review. Human influencers can broker massive deals in just a few hours, selling more than a billion dollars’ worth of goods in one night. However, the cost of training and retaining these human hosts is significant, making AI-generated streamers a cost-effective alternative.

“Since 2022, a swarm of Chinese startups and major tech companies have been offering the service of creating deepfake avatars for e-commerce livestreaming,” says Yang. “With just a few minutes of sample video and $1,000 in costs, brands can clone a human streamer to work 24/7.”

According to Huang Wei, the director of virtual influencer livestreaming business at the Chinese AI company Xiaoice, these AI-generated streamers won’t outshine star e-commerce influencers but are good enough to replace mid-tier ones. “It’s harder to get a job as an e-commerce livestream host this year, and the average salary for livestream hosts in China went down 20% compared to 2022,” Yang reports. However, the potential for these AI streamers to complement human work during off-hours makes them a valuable asset.

“Now, all the human workers have to do is input basic information such as the name and price of the product being sold, proofread the generated script, and watch the digital influencer go live,” says Yang. “A more advanced version of the technology can spot live comments and find matching answers in its database to answer in real time, so it looks as if the AI streamer is actively communicating with the audience. It can even adjust its marketing strategy based on the number of viewers.”

Silicon Intelligence, a Nanjing-based startup, plans to add “emotional intelligence” to its AI streamers. “If there are abusive comments, it will be sad; if the products are selling well, it will be happy,” says Sima Huapeng, the company’s founder and CEO. This emotional layer could add a new dimension to the shopping experience, making it more interactive and engaging for consumers.

READ MORE: Deepfakes of Chinese influencers are livestreaming 24/7 (MIT Technology Review)

Ethical and Cultural Implications

As virtual influencers continue to rise in prominence, they bring with them a host of ethical and cultural questions that societies around the world are grappling with. From regulatory responses to public sentiment, the landscape is as complex as it is fascinating.

One of the most pressing concerns is transparency. “Many virtual influencers already present as human-like, and it may become increasingly difficult to distinguish between them and real people,” Mai Nguyen notes at The Conversation. This is particularly problematic in advertising, where the line between reality and virtuality can blur, leading to ethical dilemmas.

India has been proactive in addressing this issue. “In January, its Department of Consumer Affairs made it mandatory for social media influencers, including virtual influencers, to disclose promotional content in accordance with the Consumer Protection Act, 2019,” Nguyen reports. Similarly, TikTok has updated its community guidelines to require clear disclosure for synthetic or manipulated media.

Nguyen points out that the relationship between virtual and human influencers seems “more poised for coexistence than a total replacement.” This sentiment varies from country to country, influenced by cultural norms and public opinion. For instance, in South Korea, virtual influencers are seen as a less problematic alternative to human celebrities, while in other countries, the rise of virtual influencers has been met with skepticism.

“For now, virtual influencers can’t connect with people the way a real person can,” Nguyen says, highlighting the limitations of current technology. However, as AI continues to advance, incorporating emotional intelligence into these virtual personalities could change this dynamic, making them more relatable and engaging.

Nguyen also delves into the potential for exploitation, especially when it comes to the use of a person’s digital likeness. “People may unwittingly or desperately sell off their digital likeness without consent or adequate compensation,” she warns, raising questions about consent and ethical use of digital identities.

READ MORE: Virtual influencers: meet the AI-generated figures posing as your new online friends – as they try to sell you stuff (The Conversation)

The Future of Virtual Influencers

Virtual influencers are more than digital novelties; they’re a disruptive force across industries — from marketing and music to e-commerce. In marketing, they offer a cost-effective, scandal-free alternative, especially in tech-savvy countries like South Korea. In the music realm, they’re landing record deals and challenging traditional notions of talent. Meanwhile, in China’s booming e-commerce landscape, they’re becoming a strategic asset, promising to make the shopping experience more interactive through emotional intelligence.

However, their rise is not without ethical and cultural complexities. As they become more human-like, issues around transparency and ethical use of digital likenesses are emerging, prompting varying degrees of regulatory action across countries.

The future of virtual influencers is a tapestry of technological innovation, ethical considerations, and cultural nuances. As AI continues to advance, these digital personalities are poised to become more sophisticated and emotionally intelligent. But as they evolve, so too will the ethical and cultural questions they raise, making the landscape ever more complex and intriguing.