CGM and its Potential for the World of Advertising

Sandra Leingruber

 

Introduction

 The Internet, the Web, and related technologies are constantly changing and improving, which makes it almost impossible to follow all these innovations and to stay on top of things. Every couple of months a new feature or application adds value to the Web and most likely increases the already wide range of possibilities available for users even more.

This paper discusses the immensely popular phenomenon of consumer generated media (CGM), which literally exploded in popularity in 2006 when the video sharing network YouTube became the new rising star of the Web. More specifically, this paper examines the possibilities and limitations CGM offers to advertisers and marketers aiming to reconnect with consumers in this new media environment.

First of all, a brief outline of the history of the Internet and its commercial and noncommercial beginnings is provided, followed by a detailed discussion of the current state of online advertising. Moreover, the paper explains what consumer generated media is and what this growing trend means for the advertising industry. Particular attention is given to the success stories of MySpace and YouTube and their promising commercial potential. Finally, future developments of CGM in general and its implications for the advertising industry in particular are discussed.

 

The Evolution of Today's Web

 The noncommercial beginnings

The origins of the Internet can be found in 1969, which marks the year when the ARPANET, the precursor to the Internet, was born. The ARPANET was the first packet-switching network that broke messages up into ‘packages' and sent them separately to a destination, where they were reassembled into the original message. This first true computer network was designed for education, research, and government organizations and was also expected to provide a safe communications network that would link the country in case of a nuclear attack (Network Timeline, 2007).

Once computers were linked with each other in networks and started ‘talking' to each other, the person-to-person communication, the sending of news and personal messages, soon became the most popular feature of the ARPANET (Sterling, 1993). As more computers started communicating over networks, the need for a standardized system that enabled the identification of the sender became inevitable. In 1972 Ray Tomlinson introduced the @ symbol that separates the sender's name from the network name in the email address (Peter, 2004). Today, email continues to be the most popular application of the Internet.

In an effort to regulate and facilitate the communication between the fast growing number of networks, the Transmission Control Protocol/Internet Protocol (TCP/IP) was introduced in 1973 and eventually became the standard common language for internet communications between computers in 1983 (Network Timeline, 2007; Search and Go, 2007).

The introduction of the NSFnet (National Science Foundation net) in 1987 was crucial for the further development of the Internet. The NSFnet, which would become the civilian replacement for ARPANET by the year 1990 (Network Timeline, 2007), was developed with the intention to “encourage the use of the internet throughout the higher educational system” within the U.S. (Universiteit Leiden, n.d.).

In 1989 Tim Berners-Lee, a scientist at CERN, the European Laboratory of Particle Physics, in Geneva, developed a new technique that would simplify the retrieval and distribution of information on the Internet and named it the World Wide Web (WWW) (Network Timeline, 2007; Universiteit Leiden, n.d.) . The next step was to design a ‘browser' system that “allowed the links to be hidden behind the text” (Universiteit Leiden, n.d.) and to be activated by a click with the mouse. The concept of the hypertext and HTML (Hypertext Markup Language) built the foundation of how the web would eventually work (Peter, 2004). Tim Berners-Lee describes the difference between the Internet and the World Wide Web as follows:

“The Web is an abstract (imaginary) space of information. On the Net, you find computers -- on the Web, you find document, sounds, videos,.... information. On the Net, the connections are cables between computers; on the Web, connections are hypertext links. The Web exists because of programs which communicate between computers on the Net. The Web could not be without the Net. The Web made the net useful because people are really interested in information (not to mention knowledge and wisdom!) and don't really want to have to know about computers and cables.” (Universiteit Leiden, n.d.)

In 1993 the first popular browser Mosaic X, which was to be succeeded by the Netscape Navigator, was launched. This browser improved the graphic capabilities of websites enormously by using “in-line imaging instead of separate boxes” (Universiteit Leiden, n.d.). These first web-browsers opened the Internet to whole new groups of users. The growth of the Web had now officially exploded.

The following image shows a screenshot of a website in Mosaic.

Source: www.internethistory.leidenuniv.nl

The Commercialization of the Web – the Beginnings

Until the mid 1980s the development of the Internet was almost exclusively ‘science-led'. Hardware and software suppliers had been adding TCP/IP to their products for several years, yet neither the vendors nor the buyers had a lot of information about how these products worked and how they could use TCP/IP protocols for their own needs (Universiteit Leiden, n.d.). In 1985 the Internet Architecture Board (IAB) organized a workshop targeted specifically at the private sector to discuss the potentials and limitations of TCP/IP protocols. This workshop marked the beginning of a dialogue between the government and academic scientists on the one hand and the private sector on the other hand. Finally, in 1987 UUNET, the first subscription based commercial company, was founded (Universiteit Leiden, n.d.). At this stage of the Internet's development, the most popular applications for the commercial sector were e-mail, newsgroups, chat-facilities and computer games.

The Internet had become a global information infrastructure and had the ability to support a wide variety of commercial services besides the original vendors of networking products and the service providers (Leiner et. al., 2003). It did not take long for companies to recognize the great advertising potential of this new medium. The Internet was thought to be a promising new way to generate revenue and to build brand awareness among consumers. The Prodigy Communications Corporation, for example, which claims to be the first company to offer consumer online service, was also among the first to use online advertising as a means to generate profits (Prodigy (ISP) – Wikipedia, n.d.). Almost every Prodigy page displayed the equivalent of a banner ad.

The first ‘real' web advertisements were introduced on Hotwired.com in 1994 and included ads for brands such as Zema, Club Med, and AT&T. The narrow ads were positioned on top of the pages and were 60 pixels tall and 468 pixels wide. These dimensions are still very popular today (Bruner, 2005). AT&T's banner ads of the “You Will” campaign already reflected how substantially the media communication would change. The following ad from this campaign reads “Have you ever clicked your mouse right HERE? You will.”

Source: AT&T, 1994, one of the first Internet ads, on HotWired

AT&T must have already foreseen that a decade later millions of people would click on these ads encouraging advertisers to spend a substantial amount of their advertising budget on online advertising.

 The Current State of Online Advertising (I)

  This section provides a broad assessment of the industry of online advertising; it discusses where it came from, what it has achieved and where it is believed to be going in the future (Bruner, 2005). Just about a decade ago the Internet, which has become such an important daily part of most people's lives, was practically unheard of. Along with the Web, online advertising changed dramatically over the past years. It has come a long way since the first AT&T banner ad was posted on HotWired.com in 1994.

The development and evolvement of online advertising has been a time of trial and error. Advertisers had to learn that the advertising techniques they used for traditional media frequently did not work for this new interactive medium. It simply is not as easy as posting the equivalent of a print ad on your website. The many new forms of online marketing and advertising that are now available, such as permission email, keyword-targeted search engine advertising, floating animated page takeovers, interactive on-page rich media ads, streaming audio and video, and consumer-fueled “viral marketing”, have tried to take advantage of the unique features of this interactive medium and as a consequence to be able to get consumers engaged and revitalize their excitement about advertising.

 

First Attempts - Life before the Banner Ad

The banner ad is (still) one of the most frequently used forms of online advertising. Thanks to ever-developing technologies, the banner ad has become a rich media ad that can include advanced graphics, animations, and audio and video streams, just to mention a few features. However, before the growing popularity if the banner ad, numerous other forms of online advertising were widely used and most of them predate the banner ad (Sterne, 1997).

Several of the following examples describe a poor utilization of online advertising. Eventually advertisers learned from these mistakes and understood that many of them could be explained with the difficulties they were initially facing concerning the transition from traditional to interactive advertising.

 

Spam

Newsgroup Advertising

During the beginning of the commercialization of the Internet, two lawyers sent their advertising message to every newsgroup they could find leading to a massive wave of complaints (Sterne, 1997). This example illustrates a negative example of newsgroup advertising caused by the spamming of a big number of newsgroups with messages completely irrelevant to them.

E-Mail Advertising

Not long after newsgroups got spammed with unwanted messages, the practice of sending out mass-emails became popular and was even considered a wonderful new concept at that time (Sterne, 1997).

Commercial Spamming, which can be defined as “the abuse of electronic messaging systems to send unsolicited bulk messages, which are almost universally undesired” (Spam – Wikipedia, n.d.), started with the mass postings of the two lawyers mentioned earlier. Even after this initial online advertising attempt, they continued to promote the spamming of newsgroups as well as e-mail spam as an innovative new means of advertising. The focus of spam (and anti-spam efforts) eventually moved to e-mail, where it still remains today (Spam – Wikipedia, n.d.).

Even though advertisers might consider spamming an economically viable means of online advertising due to its low operating costs, it causes numerous problems. Spam does not only irritate the recipient but causes problems for internet service providers as well, who have been forced to add more capacity to be able to handle the deluge (Spam – Wikipedia, n.d.).

The above mentioned examples represent the failure of advertisers to understand that traditional direct marketing practices do not work on the Internet. Advertisers had to learn that the Internet was not a cheap new information delivery system. Failures like these built the basis for necessary future developments such as email and newsletter subscriptions and Opt-in mailing lists, which enable the advertiser to select a more targeted group of recipients.

 

Pop-Up Ads

Another example of a poor implementation of promising   technological advancements in the field of online advertising are pop-up ads. Pop-up or pop-under ads, which open a new browser window behind the active window, attempt to increase web traffic to websites or to capture e-mail addresses. Advertisers saw these push-type pop-up ads as a way to attract the consumer's attention and to stand out from the clutter. However, pop-up ads soon became such a nuisance for consumers that companies such as America Online and iVillage decided to ban these ads from their website even if it meant losses in advertising revenue for them. In addition, pop-up blocking software quickly gained in popularity among users (Pop-up ads – Wikipedia, n.d.)

     Source: www.wikipedia.org

 The dot-com flops

The late 1990s mark the period of the explosive growth of dot-com companies. These start-up or already existing companies were eager to create websites as new shopping platforms for the fast-growing number of online shoppers. However, many of these dot-coms started their online businesses without reliable business plans, grew too fast or simply did not understand the needs and wants of their customers. “Webvan”, an online grocery store that delivered your groceries right to your door, tops the list of the “Top 10 dot-com flops”. Other flops include pets.com, kozmo.com, and etoys.com. All these businesses started with a good idea but failed to further develop their ideas with the consumer in mind (Witiger, 2007).

 

Consumer Generated Media

 

The consumer in control

As the number of media choices available for consumers is growing rapidly, so is the volume of advertisements consumers are exposed to each day. If you include not only TV, radio, magazine, and newspaper ads but also websites, emails, ads and logos on bus stops, billboards, and T-shirts etc., the number of ads the average American is exposed to every day, can easily reach 5,000 (Bruner, 2005). Understandably consumers feel overwhelmed by this flood of ads and increasingly opt out of advertisements whenever they can. What started with the fast adoption of the remote control in the 1980s has now progressed into MP3 podcasting as a self-made substitute for commercial radio, pop-up blockers to avoid annoying online ads, and finally TiVos and DVRs, which enable to consumer to simply skip ads when watching TV (Bruner, 2005). In addition, an ever-growing number of consumers are opting in and paying for media experiences such as XM Radio, Netflix, and Video-on-Demand, which grant the consumer even more control. Some experts speculate that this has trend does not necessarily mean that consumers want to avoid advertising at any cost but can probably be explained with the consumers' “desire for greater control over what content they want and when” (Bruner, 2005). This trend has not remained unnoticed by advertisers who are trying to find new ways to get invited into the consumers' lives.

Blogs, social networks, video blogs, podcasting and other consumer generated content are the most significant expressions of the consumers' ambition to take control and to create their own content. The popularity of blogs is undeniable. A study conducted by Alexa Internet in 2005 (see graph below), reported that starting in 2005 the million-plus blogs published by the publishing service blogger.com had a larger audience of users than NYTimes.com (Bruner, 2005).

 

Source: www.doubleclick.com

What is Consumer Generated Media?

“Consumer generated media (CGM) encompasses the millions of consumer-generated comments, opinions, and personal experiences posted in publicly available online sources on a wide range of issues, topics, products, and brands. CGM is also referred to as “online consumer word-of-mouth or online consumer buzz” (Nielsen BuzzMetrics, 2007). CGM emerged from blogs, message boards and forums, newsgroups, clubs or groups on portals such as Yahoo! and MSN, opinion and review sites, and feedback and complaint sites.

With technology constantly developing and improving, new forms of consumer generated media emerge and as a result require regular changes of what we mean by CGM. New definitions include:

CGM is sometimes also referred to as “Web 2.0”. This label was created because the term “consumer generated media” was considered too restrictive for the vast amount of changes that have been and are consistently occurring in this field. (Schipul, 2006). The term “Web 2.0”, which stresses the interactivity of the Net, is usually described as “a collection of emerging technologies that enable social networking by offering Web users the ability to add and edit content” (Schipul, 2006). In essence, Web 2.0 is a platform for sharing information of all kinds.

 Why is CGM important for advertisers?

Advertisers would be well advised to start to pay increased attention to blogs, as they are often great sources for rich consumer insights. Some experts even claim that the comments found on blogs often provide an even better insight into how advertising really works since the “brand commentary is often incidental, implied, and even unconscious in nature.” (Blackshaw, 2005). Review and rating sites, another form of CGM, are considered extremely powerful tools in terms of influencing consumer purchase behavior. The reviews that can be found on websites such as edmunds.com or epinions.com are usually based on relevant experiences of consumers and thus add credibility and trust to the comments. Moblogs, a form of consumer generated multimedia, are mobile-enabled blogs and allow users to post pictures from virtually anywhere. Telling labels such as “BadMcDonaldsExperience” give other consumers a good idea of what kind of picture to expect when they browse through pictures online. These examples of CGM and CGM2 are proof of the changing media landscape and the fact that ”marketers and advertisers no longer “control” the message or the medium” (Nielsen BuzzMetrics, 2007).

A research study conducted by Forrester Research Inc. and Intelliseek shows that the trust consumers place into other consumers when looking for information about products is considerably higher than the trust they place in traditional marketers and advertisers. As the following graph depicts, ‘consumer opinions posted online' rank fourth on a ranking that measures the level of trust consumers place in different forms of advertising and are perceived as more credible than advertisements in more traditional media channels such as newspapers, magazines, TV, and radio.

 

www.nielsenbuzzmetrics.com

The opinion of other consumers has become an essential source of information for online shoppers and consumers are eager to share the experiences they had with the products or services they purchased with others. Websites such as tripadvisor.com, yelp.com, and Amazon.com make comments about the trip you are about to book or the car you want to purchase easily accessible to everyone. Auto buyers and travelers in particular, increasingly rely on these online comments that help them make their purchase decisions; “nearly 50% of recent auto buyers and travel purchasers visited a message board, forum, or online community within the past 60 days”, one study says (competeinc, 2006). Moreover, one in three of these buyers pointed out that the consumer generated content they found helped them with their purchase decision.

The competeinc study results also show that CGM is only one source of research for consumers during the shopping process; however, it is a very important one, especially since opinions of other consumers are usually considered highly credible, whereas only 35% of the surveyed consumers find information that comes directly from brands credible (competeinc, 2006).

“ When it comes to finding out if a product works for you, I can't think of a better resource than those that have used it every day, and have taken the time to write about it, and let others know what they thought.” (consumer response from competeinc CGM survey 2006)

Going back to the example of auto and travel buyers, 51% of them declared that they used CGM to narrow down their choice of products or services, 23% used CGM to confirm their choice and 15% used it to select a top choice (competeinc, 2006). Finally, an amazing 24% of auto and travel purchasers pointed out that CGM even made them change their mind about the vehicle or travel package they ended up buying.

In addition, CGM is clearly not just a source of information for young consumers anymore. The competeinc survey found out that three-fourths of the survey participants were between the ages of 25 and 54; among the auto and travel buyers, 12% of the consumers surveyed were actually over 65 years if age (2006). Finally, the types of products that consumers were most likely to learn more about by consulting various CGM websites, ranged from cameras, household appliances, TVs, and mobile phones to cars, insurances and loans (competeinc, 2006).

 

How advertisers can use CGM to their advantage

As the popularity of CGM is consistently growing, advertisers and marketers have to learn how to manage the threats and opportunities this new trend creates. There are two main reasons that describe the importance of CGM and that make it a relevant and promising trend for advertisers:

  1. consumers' increasing desire to learn more about other buyers' opinions and experiences with certain products and services .
  2. relevant CGM is easy to find and always available for interested consumers, it has a considerable impact on the purchase decision of consumers, and consumers are very likely to create their own CGM postings based on their experiences (viral effect) (Blackshaw & Hart, 2006).

Hart and Blackshaw also suggest measuring the CGM sensitivity of a certain business, product, or brand (2006). The CGM sensitivity determines the importance of CGM for a certain product or service based on various characteristics such as ‘perceived financial risk', ‘perceived ego risk', ‘need for information about purchase being considered', ‘negative consequences of wrong decision' etc. Hart and Blackshaw compare the CGM sensitivity of voice-over-Internet-protocol telephone service with the CGM sensitivity of consumer staples, for example paper goods. As shown in the following graph, he DGM sensitivity of VOIP telephone service was found to be much higher than the one of consumer staples suggesting that CGM has a much higher impact on consumers shopping for VOIP telephone services. The authors conclude that CGM is irrelevant for “products that involve ‘routine-response behavior' (people automatically buy what they have always bought) or ‘limited problem-solving' (people consider a few brands or alternatives before buying)” (Blackshaw & Hart, 2006). However, for products that consumers have not developed certain preferences yet, a lot of consumers would certainly value comments and opinions written by other consumers. Consequently, CGM provides advertisers and marketers with enormous opportunities to engage consumers and compile information about their needs, product improvements, line extensions, accessories, new products, and competitors' products and services. (Blackshaw & Hart, 2006)

 

Source: Blackshaw & Hart, 2006

 

Other experts emphasize to pay particular attention to the attitudes and behaviors of in-market consumers as opposed to all consumers that are active in CGM communities (competeinc, 2006). This article defines in-market consumers as the consumers that are close to the point of purchase and tend to use CGM when considering a purchase. The authors point out that just because consumers are ‘in-community' does not necessarily mean they are also in-market, as the example of Milwaukee 's Best illustrates; 3 million hits on Milwaukee 's best YouTube video and 197 blogs did not lead to increased sales in their case. Consumers were actively involved in the buzz around their brand but did not end up buying more beer. Simply monitoring the brand mentions from any consumer across the Internet can be misleading and lead to wrong conclusions. The authors suggest implementing behavioral and qualitative monitoring programs of connected (are they active bloggers themselves?), in-market consumers in order to better understand the impact of CGM on their product preferences and purchase motivations (Blackshaw & Hart, 2006).

 

When blogs become a threat

There are numerous examples of the catastrophic effects CGM can have for a business when handled inappropriately. Dell Inc. had to make this experience in July 2005 when the blogger and mainstream media expert Jeff Jarvis attacked Dell Inc. on his blog ‘BuzzMachine' and complained about Dell's bad customer service and their inability to resolve his problem (Blackshaw & Hart, 2006). His blog soon became one of the most visited websites for several days attracting numerous other angry Dell consumers who posted their stories on the blog. The main problem with online comments like these is that they cannot easily be removed. They leave digital tracks – anyone who searched for “Dell” at that time was very likely to come across a vast number of negative comments of Dell consumers posted on various blogs.

Dell attempted to solve the problem by closing down its user-support forums, which they could not have done at a worse time since many users speculated that the forums were closed to silence consumer's complaints. Hart and Blackshaw warn businesses to be careful when handling issues like this and point out that “anything that smacks of censorship, conspiracy, or misrepresentation is virtually guaranteed to produce a severe “blogospheric” backlash” (2006). Dell could have probably prevented this horror scenario from happening if they had listened to their consumers and had tried to do something about their problems.

 

What advertisers should look out for

It is essential for companies to learn to identify possible CGM threats. Not every comment on a blog has the potential to become the next big story on the Net. High risk factors businesses should look out for are the quality of the posted comment and the skill with which it has been created, i.e. how articulate is the writing, does it describe a detailed personal story, is the story unique or funny, are pictures included etc (Blackshaw & Hart, 2006). Other risk factors include:

The nightmare story of the company Kryptonite is a good example of the devastating consequences online postings that make it into mainstream media coverage can have for a company. The following graph shows how what started with an online complaint posting lead to the downfall of the company's reputation and cost them about $10 million dollars.

 

Source: Blackshaw & Hart, 2006

Consumer generated media is not just relevant for marketing and advertising. CGM issues and opportunities can also affect legal departments, consumer service, quality control, new product development and other areas of companies (Blackshaw & Hart, 2006).

 

Monitoring the Web

The Internet with its endless sources of information has become an important part of the modern business environment and it needs to be monitored. Companies such as Cymfony and Intelliseek, which claims to have created the term ‘consumer generated media', offer software programs that help companies monitor online commentaries and look for signs of opportunity or trouble (Mandese, 2005).

 

The commercial potential of MySpace, YouTube and Co.

 Social networking sites such as MySpace.com, photo hosting and sharing sites such as photobucket.com, and user generated video sites such as YouTube.com had a major impact on the immense growth of consumer generated media in the past years. Today some of these websites can be found among the sites with the highest traffic on the Internet.

A recent study conducted by the company Hitwise, the leading online competitive intelligence service that provides their clients with information regarding their customers' interaction with competitive websites, analyzed the commercial potential of these websites as well as its influence on mainstream media.

Hitwise's report points out that “in September 2006 one in every 20 Internet visits went to one of the top 20 social networks” (Prescott , 2006), which confirms that social networking has become an important part of the online activities of many users. The leading social networking site MySpace.com with a market share of nearly 82% has millions of loyal fans who spend a considerable amount of their time on this site (The average session time is 30 minutes and 22 seconds. In comparison, the average visit time of other websites is 10 minutes and 54 seconds) (Prescott , 2006). The increased integration of social networking into users' daily online activities such as e-mailing, using search engines, and online banking indicate opportunities for promotional partnerships and advertising on social networking sites like MySpace. The Hitwise study also measured the amount of traffic that was distributed from Myspace to other commercial websites. As the following chart shows, the upstream traffic to all investigated categories and to the Telecommunications category, which includes cellular phone and telecom websites, and the shopping and classifieds category in particular, increased considerably between February and September 2006 (Prescott, 2006). The numbers include referred (through ads or links) as well as non-referred (organic) traffic to the commercial websites under investigation.

 

www.hitwise.com

Within the shopping and classifieds category, websites of the sub-categories music, ticketing such as ticketmaster.com, apparel websites such as American Eagle outfitters and Hollister as well as video games, electronics and DVDs such as netflix.com and the auction website ebay received the most upstream traffic coming from MySpace. Websites of the shopping and classifieds category considering advertising on sites like MySpace have to ensure that their products appeal to a largely very young (average age of MySpace users is between 18 and 34 years) and socially active audience (Prescott , 2006). MySpace is also responsible for the majority of upstream traffic going to other websites that display consumer generated media such as the photo sharing and hosting websites photobucket, imageshack, and slide, which makes these websites also interesting advertising platforms for advertisers.

The CGM success story of 2006 was undoubtedly the rise of YouTube, which eventually culminated in the acquisition of the online video sharing website by Google. The website is drawing entertainment seekers in like a magnet. In September 2006 it ranked number 26 of the most visited websites by U.S. online users (Prescott , 2006). The Hitwise report points out that YouTube receives a lot of its traffic (18.1%) from search engines such as Google and Yahoo. Thus it is inferred that the close monitoring of search terms that drive users to CGM websites, can assist marketers and advertisers in identifying trends that might be relevant for their target audience. Furthermore, videos and comments referring to these videos can provide an insightful source to uncover brand associations (Prescott , 2006).

It is also important for advertisers to understand the connection between YouTube and mainstream media websites, as the Hitwise study found that much of the traffic to websites in the entertainment and television category comes from YouTube. As of October 2006, the top 5 websites of YouTube users in this category were cartoonNetwork.com, ESPN, Disney Channel, TV.com, and Nickelodeon Online (Prescott , 2006). According to Prescott the potential for consumer generated media websites such as MySpace, YouTube, and others to continually grow and to become a promising and successful advertising platform for advertisers and marketers may depend on the following factors:

  1. “their ability to continue innovating in a way that increases their value to users.
  2. to encourage targeted advertising that drives results but does not alienate users.” (2006)

The key for advertising on CGM websites is that it must not alienate users. It is not as easy as putting up any old banner ad on a blog. “The point is to catalyze and amplify conversations [of bloggers], that is, to create ads that link to sites that can assist the consumer.” (Mandese, 2005)

 

Consumer Generated Media – the Next Phase

 

“It began with conversations. Then we got into broadcast media.

Now we are going back to conversations. It's a full circle.”

--Terry Catchpole, The Catchpole Corporation

(Israel & Scoble, 2006)

 

In their book “Naked Conversations” Scoble and Israel call the present time, which is marked by this enormous growth of consumer generated media, the Conversational Era (2006). They emphasize that “in this new era, companies don't win just by talking to people. They win by listening to people as well” (Israel & Scoble, 2006).

If advertisers want to stay relevant in this new media environment, they have to adapt faster and learn to better engage consumers in a world, where individuals have a lot more choices and control over the messages they want to receive. The new advertising will have to be “more entertaining, more informative, timelier, more relevant, more authentic, and more in tune with customers” (Bruner, 2005) in order to be invited into consumers' lives.

More and more companies aim to become a part of the consumer generated media trend by creating advertainment that they hope will eventually be shared with friends and thus become a part of the network effect that makes social networking sites so successful. CSTV Networks, a division of the CBS Corporation, has recently started the “Are you fan enough?” campaign, which allows basketball fans to create their own video clips and share them with other users during the “March madness days” of college basketball (Elliott, 2007). CSTV hopes to intensify this basketball mania by providing fans with the tools they need to express their support as well as their disapproval of opposing teams.

Not just media companies like CBS and Time Warner but also marketers and advertisers have increasingly started to explore the territories of consumer generated media. Unilever, for example, ran a commercial created by a consumer to promote their new oil body wash during the Academy Awards. Anheuser-Busch has recently launched its entertainment website Bud.tv (Wallenstein, 2007). However, Bud.tv failed to meet its expectations of reaching 2 – 3 million visitors per month and instead only attracted 253,000 visitors to the website during the month of February. Anheuser-Busch's $30 million initiative “was aimed to put Bud.tv on the same playing field as entertainment companies online” (Wallenstein, 2007). The site's lengthy registration process, which is necessary to weed out underage users, has weakened the desired viral effect and is thought to be one main reason for the website's weak performance.

New social networking sites are literally popping up on the Internet on a daily basis. Diverse organizations such as the Portland Trailblazers, the University of South Carolina , Nike, and even Senator Barack Obama created their own social websites (Stone, 2007). However, it often seems to be a challenge to attract new users to new social networks, such as Nike's Joga.com, a soccer community site that does not appear to attract much interest. Some experts believe that social networking sites only work for some types of brands; however, it seems to be difficult to identify those (Stone, 2007).

Netscape co-creator Marc Andreessen, who recently launched his own new social networking site Ning, claims that social networks will very soon be as ubiquitous as regular websites (Stone, 2007). With Ning Andreessen aims to provide a tool that enables anyone from ordinary people to large companies to create their own social websites tailored to their needs. The increased interest of companies in building their own social networking sites to bring their customers together highlights an important shift in what companies think about social networks (Stone, 2007). In addition, Ning is more flexible than other comparable sites and allows users to choose different features (photo and video sharing, blogs, forums etc.) they want to include in their sites and literally build their own worlds. Finally, the trend of these new online networks to serve more specialized niche interests that users may have also seems to gain in importance, which might be an advantage over bigger sites such as MySpace that are too diverse to be able to adapt to all individual needs of users. This ‘specialization' of social networks could also become interesting for more targeted advertising in the future.

Summing up, consumer generated media has become too big of a phenomenon to continually be ignored by advertisers and marketers. Advertisers will have to figure out how CGM could be beneficial to them. The possibilities seem to be endless, yet they have to be chosen and implemented with great care in order to not repeat the mistakes made in the past. Whichever way CGM will further evolve, one thing is clear: consumers will not give up their newly gained control anymore and advertisers will have to learn to live with that.

 

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