How Important is User-Generated Content?

Discover how user-generated content is effective, affordable, and quite possibly, the future of digital marketing.

Content is, and will probably remain, king.

It’s everywhere, all the time, and nearly everyone will be exposed to some form of content-based advertising regularly.

But like any business, there comes a time when that content needs to refresh and evolve with the current generation.

It needs to evolve.

User-Generated Content is that evolution.

What is User-Generated Content?

User-Generated Content (or UGC) is content that’s funded or sponsored by a brand but created by users.

It comes in many forms, but the most recognizable example would be influencer posts on Instagram. A company will pay an influencer to make a public post featuring their product. The influencer’s fans will see it, associate their trust for that influencer with the featured brand, and hey presto.

You’ve got yourself some new customers.

But How Effective is UGC?

Instagram recently performed a case study in partnership with Clinique, a high-end skincare and cosmetics brand. They compared the results of an influencer marketing campaign with a traditional photo ad campaign. For the influencer marketing campaign, here’s what they reported:

- A 54% Lower Cost-Per-Purchase (Compared to the Photo Ad Campaign)

- An 8.7x Return on Ad Spend


- A 1.8x Higher Return on Ad Spend (Compared to the Photo Ad Campaign)

These results are impressive, to say the least.

In a separate study from 2020 on the use of UGC in eCommerce, Adsmurai shared these findings:

- UGC is 42% More Effective than Branded Content

- UGC has a 6.9x Higher Engagement Rate than Branded Content

These figures are fairly conclusive. UGC not only works, but it works incredibly well.

Who Should be Using UGC?

By now, most modern brands and businesses have a content strategy in place, particularly those operating in the physical product domain.

But there’s no reason that brands operating outside of that domain can’t make use of UGC. If you offer any sort of service, physical or otherwise, it can be hugely beneficial to have a strategy for sponsored posts and influencer marketing.

If you want to learn how your business could benefit from a UGC strategy, you can get in touch with us here.

Why Does UGC Work?

In a world where new products and services are so abundant, trust has become a big issue for consumers. Anyone can create a new product or service and start an Instagram account. But how do you know if you can trust them? Does anyone else you know trust them?

UGC is able to answer those concerns. It’s able to bring a sense of authenticity to a brand like no other form of advertising.

This idea of authenticity is a big problem for marketers. A recent study from BusinessWire shone a light on this alarming statistic:

- 92% of marketers believe most, or all of the content they create is authentic.

- 51% of consumers say less than half of brands create content that resonates as authentic.

This is a fairly significant blow for marketers. But you can’t ignore the writing on the wall.

Traditional branded content is waning in popularity, and UGC is growing at an exponential rate.

It’s always been the case that trust drives sales. Established brands have, for a very long time, enjoyed the benefits of widespread trust. They don’t need to focus on the idea of authenticity - they only need to worry about exposure.

But it’s a different story for new brands. They need to build both trust and exposure from the ground up. UGC and influencer marketing present a relatively simple but incredibly effective way to tackle both problems.

This explains why Grand View Research Inc. recently valued the global influencer marketing platform at $4.6b.

North America accounted for the largest share of this sum, followed by Europe. From these figures alone, it’s clear to see that UGC is here to stay, and it’s only going to get more popular.


In Summary…

UGC is here to stay - for years and likely decades.

It’s incredibly effective, and every company should be investigating its possible use in their marketing strategy.

It’s unclear whether or not it will replace traditional branded content, but it’s undoubtedly going to play a very large part in the future of advertising.

If you want to learn more about UGC strategy and how it can help fuel your business, feel free to contact us and let’s chat!


Sources:

https://business.instagram.com/success/clinique-australia/

https://www.adsmurai.com/en/articles/user-generated-content-ugc-more-effective-sales

https://www.businesswire.com/news/home/20190220005302/en/Stackla-Survey-Reveals-Disconnect-Content-Consumers-Marketers

https://thesilab.com/global-market-for-influencer-marketing-platforms-predicted-to-grow-significantly-over-the-next-five-years/

https://blog.reevoo.com/branded-content-versus-user-generated-content/

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