Consumer-Generated Content: Putting the You in Adversiting

With increasing power in consumers' hands, consumers now have a say in everything from fundamental functions like product design and development to something that has always been kept from them up until now: advertising.

Nowadays, companies are doing what might be considered unthinkable several years before: letting the consumers make an ad for them. These ads are called consumer-generated advertising (CGA). CGA is a part of a new trend toward an increase in consumer-generated content on the Internet , which is facilitated by the growth of Web 2.0 applications and access to broadband connections.

Many companies have implemented CGA in one form or another to their advertising campaigns in the past 2 years. Some were successful like Converse's Gallery, Mastercard's Priceless, and Burger King's Mask. However, some also failed miserably like Chevrolet's Tahoe, Walmart's The Hub and many other CGA campaigns that nobody has even heard about at all.

With this widespread use of CGA, one might wonder the impact that it might have to advertising. Many experts believe that CGA is just a fad that will fade away soon while others believe that CGA is just a part of a bigger trend that is evolving in the advertising world today.

In order to examine CGA and its possible impact to the advertising better, this Web site will cover various topics related to CGA from factors involving in the rise of CGA to the reasons why CGA is and is not successful to the future of CGA.

The Rise of Consumer-Generated Advertising Diagram

Click each element on the image to learn more about it

Internet, "an extensive computer network made up of thousands of other smaller business, academic, and governmental networks,"(1) has more than billion users in the world. For the U.S., 70% of people or about 200 million people use Internet and this number has grown 120% since 2000 (2).

Evolution of Internet (3)

1958 - As a response to Sputnik, the first satellite launched by the Soviet Union, the U.S. government formed the Advanced Research Project Agency (ARPA) in order to regain technical superiority for the U.S.

1969 - ARPANET, the first packet-switching network, was created. It connected computers from 4 universities: Stanford, UCLA, UC Santa-Barbara, and University of Utah.

1972 - E-mail was created by a Cambridge, Massachusetts, computer scientist.

1977 - "Internetting" was used for the first time to describe connections between various networks

1981 - The first desktop personal computers are introduced

1983 - The computer is names Time magazine's "Man of the Year"

1984 - The domain name system. ".com," ".org," ".edu" was established. Writer William Gibson coins the term "cyberspace"

1989 - Tim Berners-Lee developed a new technique to distribute information on the Internet called the World Wide Web

1994 - Initial commerce sites are established and mass marketing campaigns are launched via email introducing the term "spamming"

1995 - CompuServe, America Online, and Prodigy start providing dial-up Internet access

1998 - Google opens its first office

2000 - The "dot-com bubble" which has been growing since 1997 reaches it peak

2003 - The number of U.S. broadband subscribers reaches 14 million. Apple launches iTunes

2005 - Seventeen million new sites go online

2006 - more than 100 million Web site online

Online Advertising Spending in Million (5)

Online advertising starts in 1994, at the same time as the establishment of commercial sites. The first online ad appeared in a form of banner ad sold by HotWired in 1996. The ad was paid for by AT&T to lead people to its Web site. Online advertising grew dramatically from 1996 to 2000 with online advertising spending in U.S. reaching $8.2 billion for the first time in 2000. However, after 2000, online advertising spending came to a standstill point because of the skepticism that companies feel toward the effectiveness of online advertising and the decrease in click-through rate. Companies also feel that online advertising lack brand-building quality that other media have. Without seeing any concrete result from online advertising, companies start to shift their money back to traditional media causing a decrease in online advertising in 2002. In 2003, online advertising was revived back to life by several factors from better economy and increasing skepticism toward the efficacy of television to increase in broadband subscribers and the increase in a more interactive form of online advertising which allow for more creative forms of online advertising that might counteract the long skepticism toward online advertising's inability to build brand (4).

2005 Online Advertising Revenue by Format (5)

Major Online Advertising Formats

Banner Ad

Banner ad is one of the first forms of online advertising. The ad appears as a banner on the screen with as many as 14 different sizes based on the Interactive Advertising Bureau's standard. The graphic can be either animated or static. The ad's objective is to attract traffic to a Web site; therefore, the ads's effectiveness are usually measured though click-through rate.

Interstitials

Interstitials are known more widely as pop-ups or pop-unders. It serves the same function as banner ad, to attract traffic to a Web site. Pop-ups, as its name suggests, are new windows that pop up when a user enter a Web site to lead the user to another Web site. Pop-up ads are not as quite popular today as they were before because of the irritation they create to the users.

Sponsorships

Online sponsorship works in the same way as traditional sponsorship. Companies will sponsore Web sites that contain information that is related to the companies. Companies usually use sponsorship to generate goodwill and brand awareness more than to generate click-through like in banner and pop-up ads.

Rich Media

Rich media is a generic term used to describe online ad that includes animation and other interactive features to visually and audibly appeal to the viewers. Most of the banner and pop-up ads now use rich media in order to attract user's attention more than just static graphic.

Keyword Search

As another effective way to lead traffic to the Web site, advertisers might bid for search terms from a search engine like Google, Yahoo!, and MSN so that when users search about some specific topics, their Web site would appear before others. Keyword search has surpassed other online advertising format in recent years because of its ability to deliver the message to the consumers at the specific time when they need it most.

Referrals

Online referrals work in almost the same way as offline method. They are used to generate traffic to a site by providing incentives such as gift or rewards to users who refer the site to others.

E-mail

E-mail is used in the same as traditional direct mail except that with E-mail, promotional messages can be sent to thousands of consumer within seconds with very low cost compared to traditional direct mail. However, this method is less and less effective since consumers are paying less and less attention to commercial E-mails and see them as annoyances.

Based on Liu and Shrum (6), interactivity is "the degree to which two or more communication parties can act on each other, on the communication medium, and on the messages and the degree to which such influences are synchronized." From this definition, interactivity includes three main components, interaction between user-machine, user-user, and user-message.

The interaction between the users and the machine is when human interact with the machine and it responds to their action. The second component, the interaction between users and users, resembles interpersonal communication except that it does not have language or time barriers. The last component, the user-message interaction, means that users can manipulate, create or change the message any way they like.

In addition to the three components of interactivity, Liu and Shrum also propose additional three dimensions of interactivity. These three dimensions are active control, two-way communication, and synchronicity.

Active control refers to users' control over the message. This means that users can consume the message in any way they prefer. With interactivity, users are not limited to consuming the message in a linear way like when they read a newspaper or a book in which they can only follow the story from the beginning to the end in one linear direction. Instead, with interactivity such as in online newspaper, users can jump between different points in the story or jump to other topics that are related to the story without having to follow the course of the story.

The second dimension is two-way communication. Interactivity provides the ability to communicate back and forth between companies and users or between users and users. In traditional media, communication usually is a one-way message from companies to consumers and even if companies do want to receive feedbacks from consumers, they usually take a long time to collect that by the time companies receive the feedbacks, the companies' response to the feedbacks might not be effective anymore. Therefore, apart from a two-way communication, time is also a very important factor in interactivity.

This time factor leads to the last dimension of interactivity, synchronicity. Synchronicity refers to the ability of users to receive responses to their input in a timely fashion. This means that users and the companies or other users can communicate back and forth simultaneously like in a face-to-face communication.

Why Does Consermer-Generated Advertising work?

Technology-wise

Consumer-generated advertising exists mainly because of the development in technology. Without Web 2.0 applications, it would have been nearly impossible to make CGA as widespread as it is today. Several technology-related reasons contribute to the rise of CGA:

1. An increase in broadband access. As many as 31 million households in U.S. had access to broadband in 2004 and this number is expected to rise up to 71.4 million by 2010. (12)

2. Development in easy-to-use softwares that allow amateurs to manipulate images and video such as iMovie and Movie Maker

3. The creation of Web sites that serve as platforms for users' creativity such as YouTube, Heavy.com, Revver, etc.

People-wise

Apart from the availability of technology to facilitate the production and delivery of CGA, what is equally important is the consumers themselves. There are several reasons why consumers want to engage in making the ads for themselves.

1. The first and most important reason for many is professional advancement. Many of the most successful CGA creators are people who are already in the business. Pete Macomber of Firefox's "Daredevil" is an aspiring director,   Tyson Ibele of Sony's "Robot" is an animation artist who wants to be hired by Pixar, while Jeff Gill of Firefox's "Wheee" is a Savannah College of Art and Design junior majoring in animation. All these people not only use CGA as a chance to practice their skills but also to make their names known in the industry.  

2. For those who do not seek professional advancement, another motivation for them might be self-actualization, the highest level in Maslow's Hierarchy of Human Needs. Self-actualization is a human's need to reach one's full potential. CGA participants might feel that they make the most of their abilities to reach the best that they can by creating an ad for the brand that they love. Creating the ad might be the best thing they can do for their brands because it helps others understand the brand and see the brand the way they do.

3. Another most obvious reason might be rewards. Most of the contests give out at least $1,000 to $10,000 to the winner and other contestants in the final round. While most companies give out money, others also give out products, traveling trips, or a chance to meet celebrities.

Marketing-wise

Not only does CGA beneficial to consumers, it also proved to be an effective marketing tool. Several marketing benefits from CGA are:

1. Engagement: Marketers are less and less interested in only getting consumers' attention or awareness. The new marketers' holy grail is in engaging consumers. Marketers are using various tactics to get consumers to engage with the brands or the products from sponsoring events to other attempts in making an ad seemed less like an ad and more entertaining. With CGA, marketers will surely be able to generate engagement. Getting consumers to create an ad for the brand engages consumers in intensive thinking about the brand and the product as well as getting consumers to vote for the ad they like best after willingly viewing various ads.

2. Community: Not only does CGA involves people who participate in the contest, it also involves the community in by letting them choose the ad they like best. In this way, CGA also engages other consumers, especially the most coveted 18- to 34-year olds, into active participation with the brand.

3. Break through the clutter: Because consumers are the ones who create CGA, it usually involves less marketing and advertising cliché. CGA is viewed as more authentic than traditional ads as what Mike May, an interactive media analyst and consultant, said "There's something to be said about an ad created by someone who really loves the product, versus what get from someone who is paid."(13) Therefore, with this difference between CGA and traditional ad, CGA might have a higher chance to break through the ad clutter than the traditional ads do.

4. Finance: CGA saves a lot of money. Instead of spending six- to seven- figures on advertising fees, companies will only spend four- to five- figures at most for a CGA campaign. And not only do companies able to shift their production costs and creative fees for advertising to consumers, they also receive free industry buzz and media attention.

Why Doesn't Consumer-Generated Advertising Work?

Although consumer-generated advertising yields many benefits to the companies and consumers, it can also create negative consequences to the companies. There are several reasons why CGA might not be as effective as one thinks:

Product Types

CGA does not work well with all product categories. It usually does not work on commodity products in which consumers can find it extremely hard to get excited about. CGA usually only works on products or brands that can generate a high fanaticism like Apple, NFL, and Converse. These brands can already generate inputs from consumers without any incentives from the brands. Apart from the brand itself, the brand's target is also another important factor. Most of the CGA works only when the target audiences are tech-savvy which usually fall into the 18- to 34-year-old group. Therefore, CGA might not work well with products that target older people.

Brand Inconsistency

The main key in creating a strong brand image is through giving out the same consistent message through every communication touch points. However, with the use of CGA, each ad comes up with different messages, different feels, and different viewpoints towards the brand which might resulted in confusion of brand identity if the brand does not already have a strong identity. Therefore, instead of relying on CGA too much, companies should still take control over the brand identity just as Denise Yohn, former Sony marketing VP, said, " brands are the responsibilities of the companies that produce them. Companies are ultimately responsible for the perceptions of and relationships with consumers that brands develop," (14) not the other way around.

Involvement

Even though CGA has an ability to engage consumers, it also poses a big chance of leaving out a large group of consumers who do not participate in the contest, whether it is from technology problems or lack of awareness of the contest.

Cluster

The problem of cluster can be best summed up by Ben Wiener, CEO of WONGDOODY, a full service advertising agency doing interactive design and PR,

" 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." (13)

As in every new trend that hits the advertising business, CGA will be utilized by many and will not be as effective as it was anymore. There is a slim chance that many people will continue to make an ad for more than two products.

Control Issue

Most of the CGA implemented by companies are usually not as boundless as they seemed to be. Companies usually set out some rules for the competitors and usually retain some control over the message before letting it out for the world to see since after the gate is opened, there is no pulling back. This lesson might be one of the most hard-earned lessons for Chevrolet Tahoe.

In February 2006, General Motors came up with the competition for consumers to create their own ads by utilizing different video clips and soundtracks the companies provided on its Web site and writing their own copy. The whole competition became one of the most talk-about mistakes in CGA, including a story on the front page of the New York Times' Business section, after people started submitting ads with anti-SUV messages.

Anti-SUV Ad for Chevy Tahoe

Despite the widespread circulation of negative messages about Tahoe, Chevrolet still maintained that the competition has worked well since more than 5 million people interacted with the site with 5.8 million pages viewed and "only" 16% of the 30,000 ads submitted were negative (16% of 30,000 is as many as 4,800 ads). Does this high awareness really worth the risk of damaging the brand's reputation by showing them 4,800 negative messages about itself?

Chevy Tahoe's case illustrates that unforeseen consequences are bound to happen when the companies relinquish all of its power to consumers without setting any boundary especially in this viral age in which everything, especially bad things, travel fast.

Consumer-Generated Advertising Tools

With the growth of consumer-generated advertising, a new types of business also emerges. UGENmedia and ViTrue are the two companies that were founded in 2006 to help companies handle CGA by providing platforms to help companies create and manage CGA campaign.

UGENmedia was founded in 2006. It provides a platform which can be integrated into the companies' Web sites. The platform makes it easier for consumers to upload their submssions, view or rate others' submissions, and E-mail any submissions to other people. The platform also makes it easier for companies to approve, reject, or publish the submissions with one simple click.

UGENmedia charges companies on an average of $75,000 to $125,000 to create and manage an online contest. Several UGENmedia's customers are 1-800-flowers.com, Bud Light, Sketchers, and MHSC Partners.

Similar to UGENmedia, ViTrue provides companies to with easy-to-use platforms to manage CGA especially for the mash-ups style competition. Apart from CGA, ViTrue also offer other services such as Branded Video Community in which the company helps customers integrate video-sharing function on their Web-site.

ViTrue charges customers on an average of $75,000 to $100,000 to set up a CGA Web site. Some of ViTrue's customers are Pringles, and talentload.tv.

Converse

One of the most successful CGA campaign up to the moment cannot be any other campaign but Brand Democracy by Converse. Together with Butler, Shine, Stern & partners, Converse created conversegallery.com in 2004 as a place for Converse fans to showcase their works for Converse. Converse's strategy is to make consumers feel like they own the brand as much as the company does and that their view matters and they do have power to change this brand.

As many as 1,600 films were sent in by fans. Fifty made into television ads, while 80 were shown on the site. Makers of television ads receives $10,000 for each ad while makers of web ad receives $1,000. The campaign, Brand Democracy, also received 2006 Bronze EFFIE, the advertising industry's most prestigious result-based award, in Apparel and Accessories category. (15)

http://www.imediaconnection.com/content/9265.asp

Mastercard

Mastercard came up with the campaign, "Fill in the Blank" in 2006 to drive traffic to its Priceless Web site. Consumers were invited to finish several "Priceless" ads with their own sentences by submitting their entries on the Web site. The competition received over 100,000 submissions and the site received more than a million visitors in November and December alone. (16)

http://www.imediaconnection.com/content/9265.asp

Burger king

In 2005, Crispin Porter & Bogusky Miami together with Heavy.com created a CGA campaign for Burger King by distributing "The King" masks to Heavy.com's users and inviting them to submit clips of them wearing the mask in various different situations. One of the most famous Burger King's clips is a clip of a woman with the King's mask stripteasing to the camera, in the end, the woman takes off her mask and "she" turned out to be a man! More than 4.1 million visitors view this clip on Heavy.com. (12)

Mozilla's Firefox

In December 2005, Firefox announced a new competition called "Firefox Flicks" inviting consumers to submit 30-second television spot they made by themselves. More than 280 clips were submitted with the winner, Pete Macomber's "Daredevil" , receiving more than 29,000 votes and the second-prize ad "Wheee" by Jeff Gill with not much less popularity. (15)

Current TV

Current TV was launched in summer 2005 by Al Gore to democratize television by letting viewers create up to 30% of the programmings. Apart from the consumer-generated programmings, Current TV also let consumers make their own ads. The channel, in cooperation with various sponsors from Toyota Motors, Sony Electronics, L'Oreal Paris, to Mountain Dew, and T-Mobile, pays $1,000 per piece to air the ad consumers make on Current TV. Consumers might also receive anywhere from $5,000 to $50,000 more if the sponsors want to use the ad on other channels. Consumers can upload their ads or see a new assignments on the V-CAM(Viewer-Created Advertising Message) page on Current TV's site. The assignments are ongoing with different brands take turn posting different assignments for their products. One of the most famous ads on Current TV is the robot ad made by Tyson Ibele for Sony Electronics.

Home Depot

In February 2006, Home Deport also joined in the CGA trend by inviting consumers to go to the store's Web site to vote for the ad that they want to air on television the most. Even though the ads were not made by the consumers like in other CGA campaign, Home Depot also claimed that its campaign was successful with more than 450,000 people voting on its site. The winning ads, titled "Indecision," showed an indecisive man who lingered on in the store long after the store was closed because he could not make up his mind on what to buy. This winning ad alone received more than 168,000 votes. (17)

http://www.imediaconnection.com/content/9265.asp

Coke

Coke, together with Wieden & Kennedy, came up with a new beautiful Web site called The Coke Show. The site features various monthly creative challenges such as how would you make a creative first move (see the ad) or to create a new character that you would like to add into Coke's Happiness Factory ad. Some of the work submitted on the site were made into a television ad like the "first move" one while others were just shown on the web.

Wal-Mart

Even Wal-Mart, the giant retailer, also jumped into the CGA trend with "The Hub: School Your Way."   This is a part of a back-to-school project from Wal-Mart created by GSD&M to reach out to fashion-conscious teenagers and to lead them to the Web site which they called "The Hub". On the Web site, Wal-Mart invited young consumers to create their own Web pages and videos to be feature in Wal-Mart's cable television ad. The project did not receive as high participation as it expected and Wal-Mart had to close the site down.

GlaxoSmithKline

Because of the company's belief that it cannot use nonsmokers to tell smokers to quit, GlaxoSmithKline came up with a new campaign in which the company invited 4 smokers in Los Angeles' area, Lisa, Keith, Matt, and Kim, to use the company's Commit nicotine lozenges to help them quit smoking over a 13-week period. The four smokers were given video cameras to tape themselves during the 13 weeks. The tapes were later edited and shown on television, Internet and made into a documentary to be shown in film festivals.  

See Lisa's story

See Keith's story

Ban

In March 2006, a deodorant brand, Ban, invited teenage girls to participate in its "Feel Ban Fresh" campaign in which teenagers were asked to take picture of themselves with anything they would like to ban. Ban received more than 4,600 submissions. It picked the 50 best ones and let consumers choose the one they like best. The winning ad was made into a print ad and ran on US Weekly in March 2006.The campaign was a big success for Ban. It brought in a 13.6% rise in sales by November 2006 after a three-year decline. (15)

Consumer-generated Advertising in 2006 Super Bowl XLI

With the increasing popularity of CGA, this year several companies went a step further by giving up their most expensive time slot, the $2.6-million-per-30-second Super Bowl time slot, to CGA in order to reach the 90 million American television viewers.

Doritos

Doritos' "Crash the Super Bowl" invited consumers to create an ad to show their love for Doritos. More than 1,080 clips were submitted and the best five were shown on crashthesuperbowl.com for people to pick the one they liked best to be shown during the Super Bowl. The winner of this contest was Dale Backus' "Live the Flavor" ad in which Backus boasted as having the smallest budget ($12.79), the smallest cast and crew (five people), the youngest crew (22 and younger), and the shortest production time (4 days).(16)

Alka-Seltzer

Alka-Seltzer took a different turn than other companies by inviting consumers to write song lyrics and performing it in its "Bring Back the Fizz" contest. The only rule Alka-Seltzer had for its contest was that the lyrics must include Alka-Seltzer's catchphrase, "Plop, Plop, Fizz, Fizz, oh, what a relief it is." The winning jingle was the "Concert" written and performed by Josh Anderson.

National Football League

For 2007 Super Bowl, NFL invited football fans to send in their idea for NFL's ad in "Pitch Us Your Idea for the Best NFL Super Bowl Commercial Ever. Seriously." Contest. The winning idea was "Hard to Say Goodbye" by Gino Bona, a lifelong Buffalo Bills fan. The idea then was turned into a commercial and aired during the fourth quarter.

Chevrolet

In order to target the coveted 18- to 25-year-olds, Chevy looked no further than the 18- to 25-year-olds themselves by inviting college students to submit a storyboard and script for Chevrolet's 30-second Super Bowl ad. The winning idea "Car Wash" was from Katelyn Crabb. Crabb came up with the idea as a part of a class project through University of Wisconsin at Milwaukee.

Future of Consumer-Generated Content

Experts' opinion differ on the future of consumer-generated advertising. Many see CGA as a fleeing trend that will soon reach its peak and dissappear just as Reuben Hendell, CEO of digital and direct marketing agency MRM Worldwide, said,"It's a great engagement device, but over the long term, I don't know why consumers will continue to spend their time on it. It's a fad."(12)

Another CEO also agrees with this view.

"The success of user-generated campaigns is partly due to their content, sure, but also partly to their novelty. And that's wearing off." Said Ben Wiener, CEO of WONGDOODY, a full service advertising agency doing interactive design and PR.(13)

On the other hand, many experts believe that CGA is only a part of something bigger. Based on Battelle's idea, there are two kinds of media at the present, the traditional Packaged Goods Media (PGM) and the Conversational Media (CM). (18)

Packaged Goods Media are characterized by corporation's control of content and distribution channels. These media are associated with traditional ads made by corporation and sent through expensive channels like television, cable, radio, magazine, etc. in order to reach the increasingly segmented consumers.

On the other hand, Conversational Media possess five main characteristics that differentiate them from PGM. First, CM involve conversation not dictation. CM's content is a back and forth conversation between author and audiences and the roles are interchangeable not a fixed one-way message from the corporation to the audiences. Second, platform is more important than the distribution. CM's platform's major role is to be a place for free distribution of information among audiences to take place not to control the distribution. Third, service is more important than the product. Rather than presenting itself as a product like PGM do, CM are service providers. An example of CM would be online newspaper, which major function is to serve information to the consumers and engage consumers in further communication among themselves. Fourth, instead of PGM's perfection and deliberation, CM's key is speed and repetition. CM's main function is to provide platforms that deliver fast information over and over again to generate conversation among users not to deliver perfect and deliberate information as like in PGM's case. Last of all, CM stress engagement over consumption. The goal of CM is to get consumers to engage in the message rather than to get them to consume the product.

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