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How Virtual Influencers, AI, and SMS Marketing Form a New Channel in the Consumer Journey

Humphrey Ho

U.S. Managing Partner @ Hylink Digital Solutions

You know the saying: "The customer is always right." The statement may be dated, but the message doesn’t change. Customer service is both a science and an art. Personable, systematic, constantly evolving — these are the hallmarks of exceptional customer service. Traditionally, conversations about consumer journey touchpoints have focused on the usual suspects — offline awareness to online search, online mass awareness on video-connected TV, or even just influencers. These touchpoints drove consumers to websites or campaign pages, of which approximately 10% would be retargeted and successfully converted if they did not convert the first time. We have traditional media and social media; what’s next?

Enter the customer service trifecta virtual influencers, artificial intelligence, and SMS marketing. Together, these innovations create a new additive channel in the customer journey to provide brands with the opportunity to up their advertising game. Rather than steering brands away from the traditional OTV/CTV x search x social x retargeting funnel, this new customer pathway would be additive to allow brands to reap the benefits of increased retargeting opportunities, conversions to site, and, subsequently, a greater number of transactions. 

SMS Marketing for Savvy Retargeting

As all things vintage make a comeback, it is fitting that SMS marketing returns with a vengeance to engage recipients through the allure of exclusivity. Both SMS marketing and AI chatbots are associated with a significantly higher engagement, with documented open rates of 98%. And according to  SimpleTexting, the average SMS marketing conversion rate is 29% — which is eight to nine times the typical conversion rate of traditional consumer journey retargeting. 

There is no secret sauce to SMS marketing’s success in retargeting and encouraging users to come back on-site to transact; this tool has been effective because it is not only personalized and personable, but it exists off-site. SMS marketing to on-site chat is the next generation advertising equivalent to what the telephone was to email, or OTV and CTV are to native and static ads. One does not replace the other — SMS marketing is not as good as email marketing in terms of loyalty conversions and campaigns — but with chatbots, we have never been able to unleash its full potential. It’s easy enough to engage a potential customer with a chatbot when they are already on-site, but an SMS marketing campaign can exist even after they have exited and forgotten about your page. SMS marketing has been what we have all been looking for to drive users back.

The Gen Z Approach to Mass Brand Awareness 

Given that SMS marketing is only useful when the user is in the consideration phase after landing on a brand's website, how do we achieve the high click-through rates and conversions to websites that will allow SMS marketing to come into play and work its magic? In the traditional customer service funnel, this would have been through traditional TV, display advertising, and influencers. But why are we still using a “Boomer” funnel to appeal to the tech-savvy Gen Z generation, which NCR has reported will comprise 40% of US consumers and become the largest customer base by 2026? 

Hylink Digital Solutions has extensive experience with creating virtual influencers. As a result, we are confident in including them on the list of modern solutions for mass brand awareness. These life-like computer-generated equivalents to human influencers have taken the advertising world by storm, each with its own personalities, values, and characteristics. Already, prominent brands such as Samsung, KFC, L’Oréal, and Balmain have included virtual influencers in their marketing strategies. HypeAuditor found that virtual influencers generate engagement rates that are three times higher than that of human influencers, despite infrequent posting and non-linear follower growth trajectories. In addition, virtual influencers represent a multi-engagement opportunity given that they do not require high activity levels as human influencers do to achieve the same levels of engagement. The result? Reduced cost and increased flexibility that human influencers may not be able to achieve in a particular brand awareness or conversion campaign.

Not A One-Size-Fits-All Funnel

The main tradeoff of this suggested funnel? Budgets — what else? This is not a one-size-fits-all funnel that can apply to all brands. Rather, it's most successful in increasing conversions for ecommerce and direct-to-consumer brands (D2C) that have the necessary digital infrastructure to execute the new strategy and for performance marketers who already have established brand awareness but have a new product or service to launch. This new methodology is likely to be less effective for up-and-coming startup brands as of right now, typically due to the financial investment necessary across the journey. 

With that, the new customer service trifecta is born — at the top of awareness and responsible for generating high conversion rates is the virtual influencer, which can give rise to SMS marketing and artificial intelligence to redirect lapsed customers back on-site. Coupled with a traditional retargeting platform such as AdRoll, brands can expect to generate at least ten percentage points of users coming back to convert via text message, email, display, or video retargeting. The trifecta doesn’t replace — instead, it exists to supplement and amplify. You may not need it, but you will certainly feel its absence. 

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