Digital Concept: User Generated Content, Part 2

The first study was published in the Journal of Interactive Marketing in 2009. This particular study was conducted by two scholars at New York University. So, it takes a look at how UGC affects the sale of music, thus the purpose of this study was to determine the degree to which UGC actually benefits the product that is the focus of these user contributions. 

This research tracked the sales of 108 different music albums that were released in the U.S. They then assessed a variety of UGC measures such as average album ratings across various music related websites as well as a number of user contributions on music blogs. 

The results of this study reveal that both of these two types of UGC have a positive association with album sale one week before its released. 

Thus, this research provides some evidence that UGC does improve the sales of a product. The second study that I would like to discuss was also published in the Journal of Interactive Marketing. This was published more recently in 2012. 

In this study, three scholars from York University, so the first study was New York University. This is York University in Canada. These scholars examined UGC across three different social media sites. Twitter, Facebook, and YouTube. 

The goal of this study was to determine if brands were portrayed differently across these three different types of social media. 

To do this, they examined UGC for two different clothing brands. These were actual accompanies. The first is called a company called Lulu Lemon, and the second was American Apparel. 

They picked these two brands because they are in the same industry but different in terms of their social media activity. Lulu Lemon is very active in social media while American Apparel is not. They then randomly selected 100 different user contributions for each of these two companies across those three different social media sites. So, they picked 100 Twitter contributions, 100 Facebook contributions, and 100 YouTube contributions for both brands. 

They then conducted what is known as a content analysis to determine if these contributions were positive, negative, or neutral. In essence, what this entails is having their research assistants look at the content for each of these contributions and then code them into one of these three categories. 

Across both of these two brands, about half the contributions were positive while only about 10% were negative. 

Also, the contributions for Lulu Lemon were much more positive and less negative than those for American Apparel. Interestingly, the degree of positive contributions on both Facebook and YouTube were about the same for both brands. 

However, Twitter was much different. While 64% of Twitter contributions for Lulu Lemon were positive, only 22% of American Apparel's Twitter contributions were positive. So, that's a factor of three times more positive for Lulu Lemon that for American Apparel. 

So, this article reveals that most UGC on social media are much more likely to be positive than negative. It also suggests that firms that are more active on Twitter are more likely to obtain much more positive contributions. Well, now that we have taken a look at this academic research, let's now turn to some practical recommendations. If you're a company, what can you do to enhance user-generated content? Well, first of all, it may sound simple, but just ask to share. 

As noted earlier, about one out of every three Internet users has made at least one UGC. There are now about three billion Internet users around the world, thus there are about one billion people who have shown a willingness to contribute their time, energy and ideas on behalf of a brand. 

The trick is, however, to direct their efforts towards your brand rather than your competitors. As noted in the study by Smith and colleagues that we just discussed, consumers are more likely to provide favorable contributions to firms that are active in social media and encourage their participation. Surprisingly, although most large firms have a Facebook page and a Twitter account, few of them actually encourage the customers to contribute. 

So, for most first, social media is a one-way communication flow instead of a two-way conversation. That should be the ideal. A good way to get this conversation started is to simply ask customers to share their ideas with you. 

Second, be responsive. 

After a first asks its customers to give them ideas, and if it's lucky enough to receive these contributions, it needs to close the loop by being responsive. 

For example, Dell Computer has a team of individuals that are just devoted solely to monitoring its discussion boards and responding to consumer postings. 

So, first choose to be responsive through financial rewards. For example, the fast food restaurant Taco Bell, sends gift cards to active social media users who make positive contributions to their brand. By being responsive to user contributions, firms are more likely to obtain higher levels of UGC in the future. 

Third, remember the Pareto Principle. 

If you've had an economics class, you may remember this principle. 

The Pareto Principle comes from the Italian economist, Vilfredo Pareto who found way back in 1896 that 80% of the land in Italy was owned by only 20% of the population. 

Since this time, this principle has become generalized to be known as the 80/20 rule, and it has been found to apply to a large number of phenomenon. For example, 80% of the world's income is owned by 20% of its population. This principle is also exhibited in UGC where approximately 90% of all the content is created by only 10% of its contributors. 

Thus, not all contributors are equal. Some are more influential than others. Firms should keep this principle in mind and seek to identify these influential contributors and reward them for their efforts. 

Fourth and finally, integrate UGC with traditional promotions. 

Thus far we have largely discussed UGC as an alternative to traditional promotions such as television advertising. Indeed, these two forms of promotions are quite different and often conducted as separate activities. However, firms should consider trying to link these two forms of promotion together. 

For example, Target has highlighted in its educational initiatives by creating a television advertising campaign that features videos from its customers. 

These videos capture the moment in which their sons and daughters open up their college admission letters. So, it's very emotional and lots of happy moments. This advertising campaign was voted as one of the best ads of the year and has resulted in substantial attention and goodwill for this brand. 

 

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Digital Concept: User Generated Content, Part 1

 Hi, let's take a look at user generated content or UGC for short. Historically, most firms have carefully managed the promotion of their products. One of the reasons why promotion has been carefully managed is because this activity is quite expensive. For example, in the U.S., a 30 second commercial on a national television channel usually costs at $100,000 just to have it broadcast. Since most commercials are shown multiple times, this cost quickly multiplies into millions of dollars and this doesn't even include the cost of developing the commercial in the first place. 

Well, the rise of new digital tools has dramatically changed this equation, low cost digital cameras, free digital editing software and online broadcasting platforms such as Youtube, Facebook and Twitter have made the creation and dissemination of promotional messages much cheaper and far easier than ever before. 

As a result, a growing number of firms are taking advantage of these development to reduce their promotional cost. 

For example, the U.S. beer brand, Old Milwaukee, has dramatically reduced its promotional cost by airing its ads on Youtube instead of on television. 

In addition to reducing the promotional cost for firms, these tools have also enabled customers to take a more active role in the development and dissemination of promotional material. For example, there are now about 300 million Twitter accounts which produce in total about 500 million tweets a day. It is estimated that about 20% of these tweets are somehow brand related, thus every day there are about 100 million free promotional messages just on Twitter alone. 

Today, anyone with an internet connection, a computer and an idea can create and disseminate a promotional message for just about any product. 

So in essence, digital tools have democratized the promotional landscape. This is the basic idea behind UGC. Here are a few examples of user generated content. All of these examples are cases in which firms are encouraging UGC in an active manner; however, UGC often occurs without firm's encouragement or approval, such as when travelers post reviews about restaurants at hotels on websites such as Travelocity.com, perhaps you've done this yourself. Our first example is a company called Go Pro; this California company develops and sells high definition video cameras. These cameras are quite compact, they're very durable and relatively cheap and are often used by extreme sports enthusiasts, such as mountain bikers, wind surfers and skydivers. They use these cameras to capture their adventures so Go Pro strategically uses UGC by holding contests in which they ask their customers to submit photos or videos of their adventures that they have taken with their cameras. 

These submissions provide a steady stream of content to Go Pro's various social media sites and also provides a very persuasive form of promotion by showing potential customers how Go Pro can be used and its value of owning this product. The second example is a company called Warby Parker; Warby Parker is a manufacturer and retailer of eye glasses that has a few physical retail locations but does the majority of its business online. This company offers a service called home try on; in this service, it mails its customers five different pairs of eye glasses. These customers can try them on for five days and then send the ones that they don't want back to the company. 

Warby Parker actively encourages these customers to take photos of themselves and share these photos on social media using the hash tag Warby home try on. 

In fact, many of the customers do take and share these photos online as a way of gaining helpful feedback from others. In addition to helping their customers, these shared photos also provide Warby Parker with increased exposure and a free source of promotional material. The third example is T-Mobile, the mobile phone market is a very competitive industry and has intense competition among carriers such as T-Mobile, AT&T and Verizon. 

T-Mobile has effectively used UGC to help fight these battles. For example, February 2014, it conducted a Twitter campaign called Breakup Letter; this campaign encouraged users of competing carriers to switch to T-Mobile by sending their old carrier a breakup letter and then posting this letter on social media. This campaign was very successful with over 80,000 new customers submitting breakup letters. In addition to generating many new customers, this campaign also resulted in substantial embarrassment for its competition. 

Now that we've had these examples, let's take a look at defining what UGC really is. 

Well, user generated content occurs when a product's customers create and disseminate online ideas about the product of the firm that markets it. These ideas often come in the form of text but can also come in other forms, such as music, photos or videos. UGC has three defining characteristics; first, the contribution is by the users of a product rather than the firm that sells the product. Second, these contributions are somewhat creative in nature and the user adds something new to what's been done before. And third, these contributions are posted online and are generally accessible to others, thus an email that transmits a link to a Youtube video created by somebody else wouldn't be considered UGC. Typically, UGC is not a commercial in nature and doesn't make any direct promotional appeals, thus it's a very interact and very subtle form of product promotion. Now that we have this definition, let's take a deeper dive into this interesting issue and the concern surrounding it. For purposes of this discussion, I want to focus on three key issues; number one, what are the different types of UGC? Although most UGC appears on social media platforms such as Facebook, Twitter and Youtube, it can also appear in other online platforms, such as blogs, discussion forums or even a firm's website. 

Some of the most common types of UGC include blog postings, product reviews and various types of submissions to firm based invitations, such as the T-Mobile example that we discussed earlier. Of all of these different types of UGC, product reviews appear to have the most important impact in terms of convincing customers to buy a product. 

Number two, what motivates users to contribute? 

Well, the factors that motivate customers to engage in UGC are very similar to the motives that encourage them to engage in co-creation which we discussed earlier. The biggest motive by far is simple social recognition. Being an active contributor on a social media platform such as Facebook or Twitter can help provide a certain amount of fame and prestige. In addition, customers can also gain social recognition when a firm profiles their contributions on its web page or in its advertisements. For example, the yogurt company Chobani, has placed its customer tweets on physical billboard signs across U.S. highways. 

In addition to social recognition, some users are motivated by financial incentives. 

Typically there are few financial rewards for UGC; however, a few firms are trying to encourage UGC by holding contests that provide winners with cash, gift cards or some other type of tangible reward. 

For example, Dunkin Donuts encourages UGC by holding contests in which customers submit photos of themselves consuming its products and it rewards winners with a variety of prizes such as smart phones and televisions. 

Third, what are the benefits of UGC? 

Well, user contributions provide firms with lots and lots of benefits. 

First of all, this type of promotion is typically low cost since the content is provided freely by a firm's customers. In addition to this cost savings, UGC also has a positive impact on product sales. 

In fact, research suggests that most customers trust UGC more than they trust traditional promotions such as paid advertising. 

UGC also helps meet a firm's need to keep its content fresh and makes their website much more interesting, thus websites that feature UGC benefit from both higher traffic, as well as longer page views.