Marketing in Action Case Real Choices at Brud

1. Summary of case
2. Situation Analysis:

-External Environment Analysis

-Internal Environment Analysis

• SWOT analysis
• Answer Questions:

• What is the decision facing the company?

• What factors are important in understanding this decision situation?

(3) What are the alternatives?

      Should come up with at least two or more alternatives.

      -Alternative One: 4 P’s and Pros and Cons of strategy

      -Alternative Two: 4 P’s and Pros and Cons of Strategy etc.

      -Alternative Three: 4 P’s and Pros and Cons of the strategy etc.

(4) What decision(s) do you recommend?

      Choose alternative(s) that is most suitable for the company at the time of situation. Provide reasons that you chose the alternative for the decision.

(5) What are some ways to implement your recommendations?

Your deliverables are:

A. Paper: You will create a 2-3 pages written case analysis paper (12-point font, single-spaced). You will need more than company web site research to do this right.

Marketing in Action Case Real Choices at Brud

Many of us look to recommendations from others to help make decisions about which clothes to buy, what skin care products to use, or which technologies will make our lives easier. This need has spawned the social media influencer marketing industry. Influencer marketing is a method of advertising products via credible individuals with loyal social media followings whose popularity allows them to influence others on platforms such as Instagram, YouTube, Snapchat, and Facebook. The influencer marketing industry is expected to grow from $8 billion in 2019 to $22 billion by 2022.

Millennials and Gen Z consumers seem to pay particular attention to influencers. In a recent study, 72 percent reported that they follow at least some influencers. Some consumers feel that the advice of a social media influencer may be more authentic than traditional advertising since it comes from a real person. But what if the influencer is not real but instead is a virtual influencer? A technology startup known as Brud is one of several companies testing the idea with its computer-generated influencer, Lil Miquela.

Modern influencer marketing has been enabled by the rapid expansion of social media tools and usage, with Instagram being the influencer tool of choice. Seventy-nine percent of brands choose Instagram as the predominant tool for influencer campaigns as compared to Facebook (46 percent) and YouTube (36 percent). The currency of influence in Instagram is “likes”—the more an influencer gets, the more his or her ideas are worth.

One of the top influencers today is Miquela Sousa with over 2.6 million Instagram followers. A 19-year-old model from Downey, California, Lil Miquela (as she is sometimes known) now lives in Los Angeles where she is pursuing a music career but still finds time to hang out with celebrities like Migos and Amanda Stenberg. She is half-Spanish, half-Brazilian and has freckles, brown eyes, and hair often styled in double buns. Modeling keeps her busy: She’s done gigs for fashion brands Prada, Lululemon, and Calvin Klein (posing with Bella Hadid) and has appeared in Vogue. You can check out her music on Spotify—each month, more than 80,000 people stream her songs.

Miquela shares openly in her Instagram posts, letting followers track her emotional ups and downs, her likes and dislikes, including her love for (and sadly, her recent breakup with) boyfriend Nick (aka “angel boi”). She also talks about saving the environment, a social cause that is important to her. But in 2018, she shared her most dramatic Instagram post in which she stated: “I am not a human being. I’m a robot.”

Brud, the mysterious company that created Miquela, describes itself as a “transmedia studio that creates digital character driven story worlds.” Its creations fit into the category of CGI—computer-generated images. The result is an extremely lifelike still or video image that can be blended with photographs or videos of humans and other real-world images (like products). Miquela may consider herself to be a robot, but in reality (so to speak), she is just a very well-crafted visual image.

If you forgot for a moment that Miquela is not real, you are not alone. One study showed that 42 percent of Gen Zers and millennials have followed a social media influencer that they did not know was a non-human. While much of Miquela’s story is fake, her influence and that of similar digital creations is very real. In one study, 55 percent of 18- to 34-year-olds following a virtual influencer said that they have purchased something because of the influencer. The money that major brands pay her (or more precisely, her creators) to wear their fashions is real, too. She even has a real agency managing her—CAA; that’s the same one that has represented Tom Hanks, Emma Watson, and Ryan Gosling.

Virtual influencers are an attractive option for some marketers. Real human influencers are subject to real human frailties, such as making insensitive remarks or engaging in illegal or otherwise unsavory behavior. Human endorsers may switch teams. The Verizon “Can Your Hear Me Now?” guy now pitches for Sprint. Human influencers may be reluctant to deliver a specific brand message that may not be consistent with their values or their personal brand. A virtual influencer is totally under the control of the company’s storytellers, graphic designers, and programmers. The specific messages the company (or its sponsors) wants the virtual influencer to deliver can simply be programmed in, word for word. A dream spokesperson, right?

While these CGI influencers may offer marketing benefits the ability of a virtual influencer to impact consumers’ decisions raises questions about the very nature of influencer marketing. While Miquela cannot be “known” because she is not human, how well do consumers “know” the human influencers who recommend products to them? Defenders of the virtual approach to influence point out that the images of human influencers are often digitally improved so that the images are less than “real.” However, CGI images can produce a level of perfection that can never be attained, a real concern in an era in which body positivity is being encouraged.

Miquela is the top virtual influencer among several other digitized peers that include Shudu, Bermuda, and Blawko22. Investors in Brud believe there are opportunities for these characters to star in movies or their own Netflix shows, reminiscent of BET’s show Cita’s World, the first show to feature a virtual reality black character (named Cita) as the host. The show included a series of videos between which Cita would answer viewer mail and give her opinions on a variety of people and events. As the technology improves and images become more lifelike, real human influencers may also have a digital version of themselves that becomes an additional source of influencer marketing revenue. Whether these virtual influencers continue to grow in popularity will depend on the skills of their creators but even more on whether their followers continue to find the virtual stories they tell—and the images they project—interesting and “authentic” enough to continue to follow them.132