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Digital Concept: User Generated Content, Part 1
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From the course by University of Illinois at Urbana-Champaign
Marketing in a Digital World
5213 ratings
University of Illinois at Urbana-Champaign
5213 ratings
Course 1 of 7 in the Specialization Digital Marketing
From the lesson
Digital Tools for Persuading Customers to Buy Your Products
How are products promoted in our digital world? In this module, you learn how new digital tools are enabling customers to take a more active role in promotional activities.
Meet the Instructors
Aric RindfleischJohn M. Jones Professor of Marketing
Department of Business Administration
>> 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 company --
excuse me, 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.
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