User-Generated Content – A Tough Nut For Advertisers

As the popularity of community sites over the internet continues to flourish, chief executive of the Internet Advertising Bureau, Guy Phillipson, examines the phenomenon of UGC and asks how advertisers can make the most of its growth …

If you’ve been keeping an eye on the world of online recently, it would appear the medium sees more “next big things” than the average issue of Heat magazine. Every week I’m introduced to some cool new online community, blog, vlog or digital i-gizmo demanding my attention and promising like-minded nirvana.

Five years ago hundreds of websites popped up daily to satisfy my nichest of interests. In 2005 blogs grabbed the spotlight for the same reason. Community sites based on user-generated content on the surface appear to be the latest online phenomenon – 2006, the year of UGC.

In a nutshell, this means the internet user produces a website’s content rather than the media owner themselves, providing value to both consumers and to marketers as a way of deepening relationships and fostering loyalty. Yes, the audiences of Bebo, YouTube and MySpace are growing at an incredible rate, but online community sites and UGC are as old as the internet itself.

User-generated content has been the common thread through all the most successful internet enterprises. Tim Berners-Lee’s original vision of the internet was a space where people could simply write to each other, the primary embodiment of the ways in which we work, play and communicate. The original browser was an editor where comments and pages could be added easily.

Post dot-com crash the big companies that survived and flourished were the companies that harnessed the participatory nature of the internet. Google, Amazon and eBay all used the thoughts, opinions and the shared intelligence of users to make their sites as relevant and as user-friendly as possible.

MySpace is arguably the most famous UGC community nowadays. Thanks to benefactor Rupert Murdoch, this online network of user profiles, photos, weblogs, email, forums and instant messaging looks likely to achieve a worldwide audience of 100 million by the end of the year. Others include Flickr, Friends Reunited, eBay, FourDocs and Wikipedia. Amazingly Bebo, a similar site aimed at 13 to 24-year-olds, has just overtaken MySpace for hits in the UK after only six months.

Bebo allows users to create home pages, blogs, films and make friends. My daughter and her friends have a space where their latest masterpiece is a downloadable three-minute movie about making a cow-pat chocolate krispie cake. All agree it is loads more fun than watching TV (perhaps with the exception of Big Brother).

Is UGC just a kids’ thing? No, they are just the early adopters and have a little bit more time on their hands than we do. But UGC is where consumers of all ages are migrating when they aren’t shopping, searching or emailing and marketers need a new mindset to touch them. The internet is not just a marketplace or communications tool, it is a creative space for all – a diary, a blind date, a portfolio, a water cooler.

With the popularity of UGC becoming more widespread, new generations of consumers are growing up with bigger expectations. They want to interact, communicate and share ideas. Today the consumer has a big influence on brands and marketers need a two-way conversation to engender customer loyalty and brand advocacy.

So what’s the opportunity for advertisers? At its most basic, they can buy banners, sponsorship, or even product placement on community sites, but the trick is to develop something that becomes ‘social currency’.

In the US, blue chip brands are already experimenting. Sony recently ran an animated commercial created by a 19-year-old who won a UGC competition; Wendy’s fast food chain has a tongue-in-cheek page on MySpace; MTV has its UGC ‘Starzine’; and trendy trainer brand Converse solicited homemade videos, turned them into ads and exhibited them on ConverseGallery.com.

These brands aren’t trying to reinvent themselves; they simply recognise that if an audience has a voice in creating a message then peers may engage with it. Consumers are demanding that marketers allow them to define brands on their own terms.

So what you have to do is let go, set your brands free and try to give the consumer some control. If you can crack that, well, you’re onto a winner.