The Beginning

The first recorded concept of the Internet appeared in memos written by J.C.R Licklider of MIT in

August of 1962 when he discussed his idea of a “Galactic Network.” This idea was not exactly the Internet

that we know today, but it included a vision of "globally interconnected computers which allowed people

from all over to quickly access data and programs." Licklider worked for the computer research program at

Then in 1965, Thomas Merrill and Lawrence G. Roberts connected a computer in Massachusettes to a

computer in California using a low speed, dial-up telephone line. This connection would be known as the

"first-ever, wide-area computer network" in history (A Brief History of the Internet).

In 1967, Roberts went on to publish his plan for the ARPANET which he created after further

development of his computer network concept. After two more years of planning, the ARPANET consisted of

four host computers and this is what is known as the beginning of the Internet (A Brief History of the

From 1971-1972, ARPANET sites completed implementing Network Control Protocol which then opened

the doors for network users to begin developing applications. Electronic mail was introduced in 1972 (A

The Internet was originally created to aid in the development of research and for a means of

quick communication; however, in the 1980’s the Internet began to move away from this and toward more

commercial activity that would include a broad user community (A Brief History of the Internet).

The 1990’s brought with it the creation of organizations such as the Internet Society and the

Internet Architecture Board. These groups aided in community support of the Internet. Also, the creation

of the World Wide Web led to a need for the World Wide Web Consortium which took responsibility for

“evolving the various protocols and standards associated with the web.(A brief History of the Internet)”

In 1995, the term ‘Internet’ was defined by the Federal networking Council. The resolution

created is as follows: “The Federal Networking Council (FNC) agrees that the following language reflects

our definition of the term "Internet". "Internet" refers to the global information system that -- (i) is

logically linked together by a globally unique address space based on the Internet Protocol (IP) or its

subsequent extensions/follow-ons; (ii) is able to support communications using the Transmission Control

Protocol/Internet Protocol (TCP/IP) suite or its subsequent extensions/follow-ons, and/or other IP-

compatible protocols; and(iii) provides, uses or makes accessible, either publicly or privately, high level

services layered on the communications and related infrastructure described herein (A brief History of the

Since the Internet and the World Wide Web have been established, it has grown to include not only

commercial websites and advertisements, but also user generated content which includes blogs, and websites

In October of 1994 the first web advertisements appeared on the Internet. HotWired (Wired News)

is known to have produced the first online advertisements on its website for brands such as Zima, Club Med,

and AT&T. The ads were banner ads which were 60 pixels tall and 468 pixels wide to be specific (The Decade

In March of 2000, the NASDAQ peaked at 5,049 due to the dot-com-craze, and those companies went

on to bust shortly thereafter. Consequently, online advertising dropped by 25% between 2000 and 2002.

Advertisers were hesitant to use the web for a couple of years while consumers became more comfortable

with the medium. The number of Americans using the Internet grew 7% a year from 2000-2004 which forced

advertisers to get comfortable with the web again. In 2001, 7.1 billion dollars were spent in online

advertising which was 3.1% of of all U.S ad spending. In 2008, it is projected that 17.8 billion dollars

will be spent in online advertising which will be 5.7% of total U.S ad spending. Notice, as dollar

expenditure in online advertising increases dramatically, the percent of total U.S ad spending on online

advertising increases only gradually- see Table 1 below. Up until 2003, the web was seen as a buyers

market; there was a lot of space and not many buyers, so the ads were fairly cheap. It wasn’t until 2004

that the market became a seller’s market. Ad spaces are selling out months in advance and the number of

spaces is limited compared to the number of advertisers (The Decade in Online Advertising).

Note: As dollar expenditure in online advertising
increases dramatically, the percent of total U.S ad
spending on online advertising increases only gradually.

There have been several trends recently in online advertising such as: marketers demand greater

accountability, rich media, high speed internet, search advertising, consumers demanding control, and

The first AT&T banner featured on HotWired allowed consumers to click the ad and this was the

method used to measure success of the ad. Now, there are many more sophisticated ways to measure success:

post-click conversions, cost per conversion, unique reach of ads delivered, average frequency of exposures,

frequency-to-conversion ratio, ad exposure time, ad interaction rate, brand impact lift vs. control ad,

view-through rate, share of voice, web page eye tracking, and offline sales lift (The Decade in Online

Rich media is high quality animation, audio, video, and software-like features that can be

embedded into small ad files. Most of this type of advertising is created using Flash, introduced in 1996,

which can deliver a message consistently to about 98% of internet-connected computers. Rich media is

favored among fortune 500 companies and the auto and telecommunications industry as can be seen in Table 2

below. The retail industry is one that does not use much rich media in their online advertising (The

Note: Auto and telecommunications industry dedicated
more than half of their online ads to richer media

Between the years 2000 and 2004, the use of high-speed internet increased dramatically in the

U.S. In September of 2000, only a little over 10% of American homes used high speed internet. By December

of 2004, 54% of households with internet connection used high speed internet. This trend parallels the

rise in popularity of rich media as shown in Table 3 below. In March of 2002, a little over 20% of U.S

homes used broadband internet and less than 5% of impressions were rich media. Then, in September of 2004,

a little over 50% of U.S homes used broadband internet and about 30% of impressions were rich media (The

Note: Broadband share and rich media
share parallel in growth from
September 2000 to December 2004

Another form of online advertising that has caught on in recent years is search advertising.

This is where advertisers bid on keywords in order to get the rank of their text ads moved up on search

results pages. However, the advertisers only pay when their ad is clicked on, this was a trend started by

Proctor and Gamble when it told Yahoo! that it would only pay on a cost-per-click basis. As of 2004,

search advertising is where online advertisers have spent the most money. Nearly 40% of ad spending was

used on search advertising. Table 4 below shows how the pie was split up for online advertising in 2004

Today, it is debated by experts whether mass media still exists. In 1965, if an advertiser were

to run a commercial on CBS, NBC, and ABC, they would have reached nearly 80% of Americans aged 18-49. In

2004, the four major channels (including FOX) could only reach 31% of that same audience. Advertisers are

being forced to get to know their consumers better with more choices of not only WHAT to watch and read,

but also HOW to watch or read it. Now, with the advent of technologies which allow the consumer to choose

whether to view an advertisement, advertisers must reach the small part of their target who would opt in to

watch the ad. Such technologies as TiVo, pop-up blockers, and podcasting/itunes have made it extremely

difficult for advertisers to reach their entire target market (The Decade in Online Advertising).

The latest trend or - some would argue - fad, is consumer generated content. This includes

blogs, social networking, audio podcasting, and mobile-camera-phone photography. Consumer generated

content is created by 'everyday, normal, consumers' or amateurs by using their own resources. The latest

trend in UGC is the use of it in advertising and this is usually produced on the internet. There are blogs

out there for companies and products as well as personal blogs where consumers discuss different products

that they love and hate. Online stores and service providers like Amazon.com and Expedia.com have allowed

consumers to rate products and voice their opinions for a while now. Similarly, MySpace and Facebook have

also been used to advertise for bands and aspiring artists. In the Super Bowl this year, there were even a

few ads that were produced by consumers or at least concepted by consumers. This topic will be discussed

Because user generated content (UGC) is new, an exact definition is still being refined. For many

people, UGC means that the piece produced was created by an amateur by way of their own amateur equipment

such as digital camcorders or camera phones and perhaps with the use of software such as Adobe Photoshop

Premiere and Elements. Then, it is put on YouTube or MySpace and marketed using word of mouth. In other

words, it was not created by a professional. The word -user- indicates that it was not created by an ad

agency or a marketer, but a ‘normal’ person (Who’s the “User” in User-Generated Content?). Often, the

Internet is used to promote UGC and create buzz around the video, photography, etc... that was created.

For the first time ever, the ‘everyday consumers’ are the art directors, copywriters,

producers, and distributors of advertising content, and the rest of the ‘everyday consumers' love it.

UGC is a novelty that sets some advertising apart from the corporate stuff, and it creates buzz. Many

argue that this is the downfall of user generated content, and it will be out of the picture once the

novelty wears off. Others say that the novelty will not wear off and UGC is the death of the corporate ad

agency. This is hard to believe, however, because a single consumer may come up with a few TV ads, but they

could not manage an entire advertising campaign including print, radio, TV, and internet.

User generated content comes in many forms such as social networking, blogs, audio podcasting,

and mobile-camera-phone photography. Much of this UGC has involved the Internet because that is the

quickest way to get your stuff noticed, but relatively few ads ever make it beyond the Internet to such

mediums as TV or print. However, there is a new cable channel called Current TV that is strictly user

Many companies have caught on to this trend, and the U.S has seen a dramatic increase in the

number of UGC commercials, especially during the much talked about Super Bowl this past February. This

There is much debate about whether UGC is a fad and if it is effective or accurate. UGC is the

latest trend on the Internet, advertising, and online advertising. As stated earlier, consumer generated

content is created by 'everyday, normal, consumers' or amateurs by using their own resources. There are

blogs out there for companies and products as well as personal blogs where consumers discuss different

products that they love and hate. Online stores and service providers like Amazon.com and Expedia.com have

allowed consumers to rate products and voice their opinions for a while now. Similarly, MySpace and

Facebook have also been used to advertise for bands and aspiring artists. Even a few of the Super Bowl ads

There are a few key theories as to what has spurred the growth of UGC: increase in audience

fragmentation, perceived ineffectiveness of traditional advertising, and the desire to reach the elusive

18-34 year old demographic (Blogs, Pods, and Really Simple Stuff Deliver Advertising at an Increasing

Rate). Generation X and Y include people who are used to choice and customization with websites out there

such as MySpace and YouTube where they can create their own content for the world to see. Marketers are

beginning to realize that in order to reach this market, mass communication is no longer a possibility.

Customization is what will appeal to these individualistic decision-makers. This brings up the topic of

traditional advertising which includes TV, radio, and print. These are forms of mass communication media.

Generation X and Y do not use these types of media as much as past generations. People log onto the

internet to find out news, to watch the latest episode of 'Heroes,' and to listen to music. These

individuals are also prone to using many types of media at once. They regularly watch TV, text message, and

web surf all at the same time. This makes the media experience convoluted and puts all of these types of

media in direct competition with each other. On that note, the 18-34 audience of today is extremely

elusive. They are distracted because they are multitasking by using so many media at once. It is hard to

grab their attention when so many other things are competing for it. Not to mention, Generation X and Y

tend to be numb to advertisements so they ignore them or skip right over them with their TiVo. Advertisers

are finding it hard to reach their audience for all the clutter (Generational Shifts in Media Habits).

Many companies believe that UGC advertising is the answer to these problems. So far, UGC is a

novelty, and it creates buzz and attracts attention. For example, let's look at the Doritos commercial for

this year's Super Bowl. In the months leading up to the Super Bowl, Doritos held a contest (Crash the Super

Bowl) where consumers could enter their homemade commercials for a chance to have it aired on the Super

Bowl. Doritos got several submissions, but they involved non-contestants by allowing them to vote on which

ads they thought were the best. This interactive campaign created tons of buzz for Doritos. From January 1

to the 28th, the Doritos site attracted 227,000 unique visitors, and that is why companies are drooling

over UGC. Also, it was found by comScore Networks that 27% of Americans surveyed thought that the UGC

commercials aired during the Super Bowl were more entertaining than the professionally produced

commercials. UGC advertising is huge right now and there are few companies that want to be left behind

Many argue, however, that UGC is inaccurate and will fade away as soon as the novelty wears off.

In an article that Walt Crawford wrote, he gives examples of his experiences with inaccurate ratings. One

reviewer gave the movie West Side Story one star because they were expecting an action film rather than a

musical. Also, who is to say that some ratings are not written by employees of the company who manufactures

the product being reviewed. There is also the possibility of the same person taking on different identities

and writing more than one good or bad review. Then there is the arguement that UGC will go away once the

novelty fades. Right now, consumers are infatuated with UGC advertising because it is new and exciting,

and they can relate to the people who created it. But when every company starts to do this, it will no

longer be anything to talk about (User-Generated Content: This is the Promised Land?).

Right now UGC advertising is huge, but only time will tell if it is a fad that will turn into a

As discussed earlier, UGC means that the piece produced was created by an amateur by way of their own

amateur equipment such as digital camcorders and Adobe Premiere software loaded on a home computer.

It is then usually marketed by the person who created it using word of mouth and aided by websites such as

YouTube and MySpace. The Internet is often used to promote UGC and create buzz around the video,

photography, etc... that was created. Simply put, the word -user- indicates that it was not created by an

ad agency or a marketer, but a ‘normal’ person (Who’s the “User” in User-Generated Content?). This is the

latest trend on the World Wide Web and in advertising. Below are several examples of UGC and UGC

The CSTV Network is getting in on the UGC craze while trying to intensify the mania of March Madness among

students and other fans. A section of the CSTV website - cstv.com/postup - allows consumers to upload

A-B has teamed up with Blue Lithium - an online marketing company - to introduce a promotional program

which will allow members of MingleNow.com - a social networking website - to upload and share photos and

videos. A-B also wants to add video sharing its new entertainment website - bud.tv.

All of these sites allow consumers to upload their homemade videos for the entire community to see. Some

All of these sites allow people to talk about themselves. People can create profiles of their interests

and upload pictures while accumulating “friends” from all over the U.S. These sites allow people to

Doritos, GM, and the NFL all took part in the user generated content craze by running ads in the Super Bowl

that were created by consumers or based on consumer ideas. These are examples of UGC advertising.

There are a few key theories as to what has spurred the growth of UGC: an increase in audience

fragmentation, perceived ineffectiveness of traditional advertising, and the desire to reach the elusive

18-34 year old demographic. These three things could be the reason for the growth numbers and percentages

presented below (Blogs, pods, and Really Simple Stuff Deliver Advertising at an Increasing Rate).

According to the first installment of PQ Media’s Alternative Media Research Series, the Blog,

Podcast, and Really Simple Stuff Advertising outlook, advertising spending on UGC online media (blogs,

podcasts, and RSS) did not begin until 2002. By the end of 2005, spending had grown to $20.4 million, this

was a 198.4% increase from 2004. At the time of this report, it projected that spending on blog, podcast,

and RSS advertising would reach $49.8 million in 2006. It also forecasted that spending on that same UGC

online media would grow at a compound annual rate of 106.1% a year from 2005 to 2010, reaching

$757.0 million in 2010(Blogs, pods, and Really Simple Stuff Deliver Advertising at an Increasing Rate).

UGC advertising medium	2005	2010
Blogs	$16.6 million	$300.4 million
Podcasts	$3.1 million	$327 million
RSS	$650,000	$129.6 million
Total	$20.35 million	$757 million

While UGC has created a lot of buzz and hype for some companies, and it has set the everyday

advertisement apart from the rest, other companies have discovered that dabbling in UGC could get you

Chevy discovered this when it created a website just for consumers to create their own Chevy

Tahoe commercials. Users could mix and match audio and visual and insert their own words, but this

backfired on the company. Consumers were coming up with headlines such as “$70 to fill up the tank, which

will last less than 400 miles.” Another reads “Like snowy wilderness? Better get your fill of it now. Then

say hello to global warming.” Still another reads “ Our planet’s oil is almost gone…you don’t need GPS to

see where this road leads.(Chevy Tries a Write-Your-Own-Ad Approach, and the Potshots fly)”

Executives at Chevy said that they expected the good with the bad. UGC has created a gold rush

that advertisers are fighting to mine, and the executives at Chevy say that Chevy Tahoe doesn’t want to be

left behind. So, in the end did all the press and PR hurt the Tahoe or did it help it? Its hard to say

The next trend is payment for user generated content. It is projected by some that almost every

large site that focuses on viral video will have some kind of payout method. A few sites are ahead of the

game already such as break.com which pays $400 - $2,000 to contributors about 100 times a month for

exclusive rights to videos. Also, spymac.com pays between $3000 and $5000 for UGC a month. There are other

methods of payment besides the one time payout. Revver.com pays the video’s creator every time a person

clicks on the advertisement placed at the end of the video. Viewpoints.com will have both paid and non-

paid reviewers who will write about hotels, restaurants, doctors, and other services (Websites Want to Pay

YouTube.com is soon to catch onto this trend, it just announced its plan to start compensating

individual creators. YouTube executives explained that they did not want to compensate creators at first

because they wanted to build a loyal community around video rather than only attracting those interested in

money. Some website executives such as those at viewpoints.com hope that their non-paid reviewers will do

it for the love of the recognition and conversation. However, one of its paid reviewers said that this

type of non-monetary reward only goes so far, and he wouldn’t do it without some form of compensation

Many UGC creators are not looking for a life in the entertainment industry, but they are excited

at the thought of some monetary reward for their work and the revenue that they bring to the site (Websites

Some people are of the opinion that UGC is a novelty and a fad which will soon fade away. Right

now, consumers are infatuated with UGC advertising because it is new and exciting, and they can relate to

the people who created it. But when every company starts to do this, it will no longer be anything to talk

about (User-Generated Content: This is the Promised Land?). The Super Bowl Commercial for Doritos was

created by 'normal' consumers which was the result a contest (Crash the Super Bowl). Consumers were allowed

to enter their homemade commercials for a chance to have it aired on the Super Bowl. This interactive

campaign created tons of buzz for Doritos. From January 1 to the 28th, the Doritos site attracted 227,000

unique visitors. Also, it was found by comScore Networks that 27% of Americans surveyed thought that the

UGC commercials aired during the Super Bowl were more entertaining than the professionally

producedcommercials. UGC advertising is huge right now and there are few companies that want to be left

behind (Consumer Generated Super Bowl Ads Attract Interest). It will be several years until it is clear

Right now, UGC is the latest trend on the Internet, advertising, and online advertising. UGC is

content that is created by amateurs and using their own resources. UGC advertising means that the ad was

created by a 'normal, everyday person' and not by a corporate ad agency or a marketer.

UGC comes in many forms such as podcasts, blogs, and social networking sites. All of these things

allow people to use their own creativity in creating and producing their own content. Video sharing

websites such as YouTube and Revver allow people to look at other people's work as well as distribute their

own. Social networking sites allow people to create buzz around their bands, videos, etc... UGC is most

popular on the Internet because it is a quick form of communication, but even the Super Bowl this year had

There is much debate going on right now as to whether UGC is a fad or whether it is really

accurate or effective. For now, companies are jumping on the UGC bandwagon because it is getting the

consumers' attention and is creating buzz around the products. No one wants to be left behind. However,

companies like Chevy have learned that UGC can go terribly wrong. Only time will tell if UGC is here to

Thanks for visiting my site. I hope you learned a lot about the UGC and how it applies to the

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The Beginning, Present, and Future of User Generated Content (UGC)