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Are Consumer-Generated Ads Here to Stay?

Robert Moskowitz
Are Consumer-Generated Ads Here to Stay? Robert Moskowitz

A couple of weeks ago we took an "In Focus" look at consumer-generated advertising, and now we'd like to revisit the subject from another perspective: CGA's present role and possible future in advertisers' ongoing efforts to connect with prospects and customers.

"These campaigns generate a lot of press for their innovativeness," says Mike May, an interactive media analyst and consultant with The Acorn Group, a company that programs and produces conferences on interactive media, marketing and commerce. "Essentially, GE's 'Imagination At Work' campaign [introduced in January, 2003] found a new way to use the interactive media to engage consumers. That was the innovation and that was the breakthrough, because so many people participating in the campaign says a lot about consumer willingness to engage in a conversation."

Adds Ben Wiener, CEO of WONGDOODY, a full service advertising agency doing interactive design and PR from offices in Seattle and LA: "Consumers also like the opportunity to be creative, because they feel they have some impact and some ownership. It's not just information being created and put forth by the corporation."

However, if the relatively unrestrained Converse Gallery campaign scores a "10" on the scale of tapping into consumer creativity, most other consumer-generated campaigns would score between a "3" and a "7", because they have backed off from encouraging folks to submit full-blown original video commercials. Instead, they offer more of a "mix and match" opportunity. For example, New Line Cinema recently asked fans to create mixed versions of music from the movie called "Take the Lead" by selecting from material available on the film's official website. And as mentioned in our In Focus, Home Depot, Chevy Tahoe and MasterCard have been pushing the genre toward similarly limited creative opportunities.

Success or failure of the genre?
"The Converse campaign is successful because it has received quite a number of submissions," opines Wongdoody's Wiener. "It has made a real impact in the market. The submissions have been very high quality. People are putting a lot of time and thought into what they are doing. The campaign has also succeeded in terms of press and buzz attention: they're getting a lot more value from the PR than from what they're buying in media placements.

"Subservient Chicken was great," Wiener suggests, "but campaigns that sought to walk in those same footsteps began to reach people who couldn't care less. In some ways, user-generated advertising is this year's BMW films. That was brilliant, but after it was copied a few times by other advertisers, it began to become awful and played out. You can't have other marketers piling onto the bandwagon and expect to have the same success, although that's what usually happens with these new ideas. The success of user-generated campaigns is partly due to their content, sure, but also partly to their novelty. And that's wearing off."

While there seems to be a great potential for consumer-generated advertising campaigns to flop, it's hard to find any trace of such "failures." But The Acorn Group's May is not surprised. "There could be any number that never gain any sort of broad awareness," he says. "If something is a failure, we just won't ever hear about it."

Another reason failure may not be an option is that, in many cases, these campaigns are not supported by traditionally sized media budgets. How much success do you really need to cost-justify a four-figure or five-figure campaign?

Why go this way?
Duh. Let's see: On one hand, you have six- and seven-figure creative fees for advertisements that are attracting less and less interest, and arguably having smaller and smaller impacts on sales; on the other hand, you have a source of basically free advertising with built-in audiences and tremendous potential for ancillary PR. Which one should advertisers prefer?

"The cost of producing your basic 30-second commercial has become astronomical," Wiener points out. "It's incredibly cost-effective to get user-generated content."

If that weren't reason enough, consumer-generated advertising is also a great way to measure consumers' passion for your product or brand. It's not hard to count how many people are submitting movies, for example. And there's always the potential for hitting the jackpot with a really iconic ad or discovering a new advertising genius. Advertisers are highly attuned to the vast pool of talent out there, and they know how easily good ideas can arise from the ranks of consumers.

In addition, more than a few advertisers are persuaded to try this approach by the effectiveness angle.

"Advertisers are grasping for new ways to reach people," suggests Wiener. "Consumers are now in fragmented target audiences, and the web is a critical means for communicating with them. You want to give them a sticky experience they'll tell their friends about, and the way to do this is with compelling content. Right now, users can often generate the most compelling content of all."

Jackie Huba, co-author of "Creating Customer Evangelists," suggests that advertisers like consumer-generated advertising in part because they "are finding that many of their traditional marketing strategies are less effective. Competition for time, attention and loyalty is more acute. Challenger brands are experimenting with these new ideas and finding out they can create a good deal of word of mouth backed by eye-opening results."

Of course, consumer-generated advertising is unlikely ever to replace an agency, not the least because agencies generally stay closely involved with every aspect of such a campaign. But consumer-generated advertising lets you "tap into the authenticity of a brand aficionado," says May. "Companies like Apple have been enjoying this kind of popularity for years. A woman wrote a song about how much she liked her Mac, put it on the internet, and it took off like wildfire. There's something to be said about an ad created by someone who really loves the product, versus what you get from someone who is paid."

Next: How well does CGA work, and what's its future?

Content marketing budgets increase with industry growth

According to Forrester Research, your future customers are between 67 and 90 percent of the way through their shopping before they reach out to you. Consumers are also more empowered than ever to conduct their own self-directed research, which requires a deeper level of useful yet actionable content. In recent months, brands have started losing visibility with organic content posted to social media due to algorithm changes designed to generate more profit, while ad blockers are reducing impressions for display advertising across publisher websites. As a result, custom branded content has become a priority for marketers.

Despite the challenges marketers face to create engaging content, experts say it works. Seventy-seven percent of B2C marketers and 86 percent of B2B use content marketing to help achieve goals. According to a new report from Forrester Research, three-quarters of respondents indicated positive bottom-line outcomes, ranging from increased loyalty to reduced marketing and media expenses. Nearly 60 percent of respondents said they experienced positive top-line business outcomes including increased revenue and sales.

According to Content Marketing Institute, content marketing budgets are growing fast:

  • Fifty-nine percent of marketers said they increased spending on content marketing in 2015.

  • Twenty-five percent of marketers increased their content marketing budget by 30 percent or more compared to 2014.

  • Nearly half increased content marketing spend by at least 20 percent.

  • The most effective consumer marketers allocated 29 percent of their marketing budgets to content marketing.

  • The most effective B2B marketers spent 39 percent of their marketing budgets on content.

According to Custom Content Council, the average per company content marketing budget is more than $1.8 million annually. Fifty-two percent of content marketing dollars are spent on people. Content creation accounts for 32 percent of content marketing spending, while distribution accounts for 18 percent. As demand for content marketing services and tools increases, so does investment. Venture capitalists have already invested more than $1 billion in content marketing technology companies since 2006, and the industry is on track to generate $313 billion in revenue by 2020, based on a PQ Media Global Content Marketing Forecast.

Start with a plan

Before you go to your boss to ask for more funding for your content marketing programs, put together a strategic plan. Identify overall business, sales, and marketing objectives that content marketing can effectively support. Incorporate metrics and benchmarks for each objective. Build a strategic plan including strategic initiatives, supporting tactics, and human resource requirements. Identify target audiences, channels, and key messaging. You need to determine whether you have all the necessary content creation resources available in-house or if you will need additional budget for freelancers or agencies. Create a budget and timeline, and assign owners for key initiatives. Factor in internal, competitive, and industry data to justify the budget, which should include both production and syndication of content as well as any advertising budget to promote, boost, or otherwise market the new content to your target audience. Don't forget to budget for necessary content marketing tools and platforms (e.g., HubSpot, Linkvana, or Hootsuite).

A well-designed content marketing program can support a variety of objectives and initiatives. The most common goals for content marketing programs (and associated metrics) include:

  • Increasing customer retention/loyalty (renewals, lifetime customer value)

  • Increasing engagement (time spent on website, increased activity on website)

  • Increasing conversion rates on website (website conversions to leads or sales)

Leverage existing resources first

Many businesses view content marketing as a separate marketing activity that's not integrated across the organization. Think inside your organization to leverage, improve, and extend your existing content and distribution. Collect, modify, optimize, and syndicate existing content from your employees. Leverage relationships, resources, and budgets from other departments including sales, customer service, and public relations. Look outside the company to strategic partners, vendors, and even clients for additional support with your content marketing initiatives.

Going for the gold

If you've struggled to secure adequate content marketing budget to fuel your inbound marketing efforts in the past, fear not. There are three effective sales strategies you can use to secure additional content marketing budget for the future: appeal to logic, appeal to ego, or simply beg for forgiveness.

Appealing to logic
I usually open content marketing budget discussions with research, which we've provided in great detail above. Regardless of your industry focus or customer profile, there will be some sort of secondary research available online. Digital market research organizations like Content Marketing Institute, eMarketer, and MarketingSherpa regularly share insights via regular research studies and reports. Your industry trade association should also have some level of market research. If you're an active member of your association, and it lacks relevant industry research, request that it conduct a study or survey of membership regarding budgeting for content marketing. If the data you uncover is insufficient or not compelling, consider conducting your own primary research: Host a focus group of your customers, partners, and peers, or create and share an online survey (SurveyMonkey offers limited functionality for free) and distribute the results widely. You may be surprised at the findings.

Appealing to ego
If management is not swayed by the analytical approach, then the ego approach usually works. Conduct a competitive industry benchmark audit, assessing your competitors' use of, and efficacy with, content marketing initiatives. You can't lose with competitive benchmarking. Either your competition is killing you online, or they're not. Either way, you need to maintain a leadership position or play catch-up. I haven't met a CEO who is comfortable with getting beat by the competitors, especially when developing, implementing, and managing content marketing campaigns can be relatively affordable and quick to launch.

Begging for forgiveness
If the foundational research efforts fail to secure the desired resources, one sales strategy remains. Due to the risky nature of this approach, I offer this disclaimer: The forgiveness strategy can get you fired. Boiled down, the forgiveness strategy is simple: Run a limited test using existing budget and/or resources (usually shave a few percentage points from the traditional marketing budget or tap your team for help creating content for your campaigns). For those of you with unresponsive management, consider sending an email or memo in advance, outlining your plans "unless otherwise directed" in order to offer additional protection. Once the test is complete, analyze the results. If the data is compelling, share it with management, all while "begging forgiveness" for running the test without formal approval. If the numbers are there, it should be easy to gain approval for any additional budget. If the numbers are not there, re-evaluate and reformulate a future test program when budgets allow. Hopefully, you won't get to this point, as the logic or ego approach will have been successful.

Armed with the content marketing research and best practices outlined above, you should have much greater success securing the content marketing budget you need to grow your business today and beyond. For more information, check out the useful resource links below.

Additional resources

Kent Lewis is president and founder of Anvil Media.

On Twitter? Follow iMedia Connection at @iMediaTweet.

"Notepad with words content marketing concept and glasses" image via iStock.


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