Disclosing the virtual nature of virtual influencers: The effect of disclosure prominence and the role of product digitality

As virtual influencers, digitally created personas with human-like appearances, gain traction on social media, concerns have emerged regarding transparency and consumer awareness. While regulatory bodies increasingly mandate the disclosure of a virtual influencer's artificial nature, little is known about how the prominence of such disclosures affects consumer perceptions. To examine this, we conducted two online experiments among U.S. female Instagram users aged 18–34. In Study 1 (N = 245), we adopt insights from the persuasion knowledge model and the source credibility model, employing a one-factorial between-subjects design (prominent disclosure vs. subtle disclosure vs. human baseline) examining how disclosure prominence affects perceived source credibility and subsequently brand attitude and purchase intention. In study 2 (N = 429), in line with the match-up hypothesis, product digitality is considered as a moderator. Overall, our results show that prominently disclosed virtual influencers were perceived as less credible than subtly disclosed or human influencers. Credibility perceptions of subtly disclosed virtual influencers were mixed compared to human influencers. Furthermore, source credibility mediated the relationship between disclosure prominence and the two brand responses. However, contrary to the match-up hypothesis, product digitality did not moderate these effects. Theoretically, this research advances our understanding of how disclosure design shapes perceptions of virtual influencers and challenges assumptions about endorser–product congruence. Practically, it suggests that prominent disclosures may reduce advertising effectiveness, while subtle disclosures have a less negative impact—raising important considerations for balancing transparency and persuasion in virtual influencer marketing.