Juice Wireless' founder examines the user-generated ad phenomenon and what role these ads may play in the future of marketing.

The other day I was pouring a big pile of ketchup, and I noticed on the packet that there was a contest to make the best user-generated commercial for Heinz ketchup -- with the winner's ad actually running on TV. As my mind filled with ideas for my own creative ways to use the red stuff, I started to think about this: As user-generated content becomes increasingly mainstream, will user-generated ads follow in popularity? 

Actual consumer product reviews have already become key to our selection of everything from restaurants to toys, cars and movies. When I select toys to buy online for my incredibly cute nephew, I read every one of the consumer reviews because they provide invaluable insights; for example, how hard they are to assemble. 

But beyond consumer reviews online, will user-generated rich-media ads become more than the occasional promotional contest in which the brand marketing value comes as much from the contest -- thousands of people thinking about your brand and product -- as from the ad itself? 

My first thought is why not? We are much more likely to listen to friends or colleagues than a random advertiser, right? And, when it comes to actual content, users have shown they can be as creative as any studio. So, why not have ads function like new media content: made by users, for users? 

One reason is because what entertains us is personal, and diverse and ever-changing. What influences us is a highly structured science, studied and fine-tuned with a focus appropriate to the trillions of dollars worth of products and services advertising helps sell. As much as we may complain about ads on TV, they create brand awareness, they entertain and they inform. Simply put, they work. A user may rave about a particular car or restaurant or toy, but if that is the primary manner in which we are told about the product, it may do little more than to let us know that that person really likes that product. 

Plus, there is the question of how user-generated ads get placed, and when they will be viewed by consumers. With most user-generated content, users search for what they want and then watch it. But, the whole premise of ads is that they are "inserted" into the content we want to watch, and they are part of the viewing experience; not the most significant part, but a part nonetheless. Will users go out and search for the ads specifically? It's possible, but the rare ad that is so funny or racy that we watch as entertainment is likely to remain an exception, not the rule.

It would seem that the answer to my earlier question would be no; user-generated ads will be an occasional promotion and not much more. However, in reality, there's still hope: truth is, user-generated ads are so new that their potential may still be determined. So, here is my guess as to what will happen.

For mainstream media viewing -- think TV -- mainstream ads will remain the dominant force. What you may see more of is the insertion of "raw" user-generated ad content about that product into a professionally designed ad. You may also see more interactivity, in which users see an ad and send in their own product experiences; these experiences can later be viewed online or on a mobile phone when users want to learn more about what they've seen.  

For online media viewing, what we are likely to see is a more even mix of professionally and user-created ads, with the scale still tilting heavily in favor of professionally created ads. The insertion of user-generated ads will be keyword based, so if you search for "bars in Los Angeles" you will find the UGC and the inserted ads that match that content. Our product, JuiceCaster, will be unveiling one such system later this year. 

I believe that user-generated ads have great appeal where the product or service is local -- either geographically or in interest value -- because what user-generated content and user-generated ads enable is for the vast majority of businesses -- from the local bar to the local plumber -- to create more engaging, more targeted ads. For example, imagine the plumber in your area turning the camcorder on himself and giving you tips on what to do when your toilet clogs. Then, when you go online and search "what to do when my toilet clogs," his self-made ad, with its informative content, shows up. The local plumber being helpful is a stepping stone to his gaining local customers.

Or, imagine the local bar on a slower night. The owner turns on his cell phone camera and takes a video that offers $1 drinks for the next half hour. Everyone in the local area gets that "ad" as an alert, and people pile on in.

Indeed the future isn't just one path; it's a murky combination of things. But, what will remain a truth is that people with goods or services, or plungers, will continue to find new and interesting ways to reach all of us. 

Nick Desai is founder and chairman of Juice Wireless. Read full bio.