Feature

User-generated content uncovered: Power to the people

User-generated content is driving the next stage in the growth of the internet. Larissa Bannister examines the opportunities for brands and agencies.

Most of the current buzz-words in digital marketing (blogging, podcasting, social networking) and most of the websites being fought over by the big media conglomerates have one thing in common: they are built on user-generated content.

Whether a page on MySpace, a short film on YouTube, or a blog, the web is stuffed full of video and text uploaded by people who want to share what they're doing with the world.

It's a shift that is behind the growth of what people are calling Web 2.0 - the second phase of the internet. This time around, it's not only about the amount of time people are spending online (significant though that is), it's also about what they're doing online. And what they're doing is creating content and sharing it with each other.

According to Nigel Morris, the chief executive of the Aegis-owned digital network Isobar, this change means the media market itself is moving from an old and inflexible model to an environment of infinite flexibility, where content from anywhere can be viewed by anyone. "There's also a dicho-tomy between what's edited and what's unedited," he says. "YouTube is the unedited world and it has clearly struck a chord with people. There's an absolute fascination with this kind of real-life content. It's a bit like the rise of reality TV."

Damian Blackden, the director of strategic marketing technologies for Europe, the Middle East and Africa at Universal McCann, says the change in behaviour from consumption to creation represents a real challenge to broadcasters and agencies. "For some people, TV is becoming the new radio - so TV is the background medium and the internet is the lead," he says.

This might sound scary to a market built around a traditional broadcasting model. But, in fact, it's also an opportunity for media owners, advertisers and agencies alike. By getting involved in user-generated content, you can get people more involved in your brand than they ever have been before, increase their loyalty, even make them your brand advocates. And you can find out exactly what they think about your product.

For brands, this means a change from traditional marketing methods such as advertising to getting involved in dialogues with consumers. "It's not about your message any more," Morris says. "Now, it's all about whose consumers are telling the best stories about them."

A threat to broadcasters?

In April, Mark Thompson, the director-general of the BBC, said user-generated content was something that could future-proof the Corporation. "At a moment when media consumption is being transformed by digital technology, a publicly funded, monolithic broadcaster like the BBC looks increasingly irrelevant," he said, before outlining plans to restructure its website around content such as blogs and home video.

The BBC is not the only broadcaster keen to try to take advantage of the trend. TV channels, particularly those in the youth market, are aware that their younger audience is spending more time away from the TV screen - and that to keep them interested they need to provide them with ways to contribute as well as consume.

In May, Flextech launched Trouble Homegrown, a website asking users to submit 30-second video clips that would be featured on Trouble TV.

MTV has since launched a similar initiative, MTV Flux. The website allows users to create their own homepage to which they can upload clips, music or pictures. A new TV channel will launch in September.

Angel Gambino, the vice-president of commercial strategy and digital media at MTV Networks UK, says the decision to launch its own user-generated content platform came as a result of watching how its audience was consuming media.

Research showed two things - that the audience wanted greater control over what it watched and that it expected to be able to respond and come up with its own content. The site gives people the tools to do both: viewers can vote for what they want to see broadcast on the TV channel and can also access tools that make it easier for them to create their own films. MTV is also partnering with art colleges to assist students who want to get involved in TV and video production.

These initiatives, along with the cost of monitoring the site to ensure postings are kept within legal boundaries, means the launch has required significant investment. But, according to Gambino, the cost is more than made up for by the potential.

"We are trying to reinvent music TV," she says. "Flux could expand on to other channels, but the main revenue opportunity is about reaching a new audience, reducing churn and making sure our core market is spending more time with us. That will help ad revenue and will make MTV a must-have channel for any new satellite or internet protocol TV carrier. There will be some new revenue streams over time as well - text-to-screen applications, gaming elements and other new advertising formats."

"Ours is a business in transition," she adds. "Our core business is still TV, but we acknowledge that our audience is spending its time in different ways."

A threat to brands?

The growth of video-based user- generated content on sites such as YouTube has had a lot of press coverage, but, according to Blackden, is not yet as widespread as some estimate. "At the moment, user-generated video is viewed by a large number of people but created by a small number, mainly young men. I can see that broadening over time though," he says.

What isn't in doubt is that when someone does create a piece of film that strikes a chord, it can become very popular, very fast. If a brand is part of that film, it needs to respond. But how it should respond is the problem.

Coca-Cola and Mentos were faced with that dilemma earlier this year when videos of the explosive fountains created when you mix the two products together were viewed more than 2.5 million times on www.revver.com and other websites.

The way the two brands reacted was a lesson in itself. While Mentos sponsored the original film, Coke issued an official statement saying it hoped "people want to drink Diet Coke more than try experiments with it".

Bloggers everywhere reacted with scorn - and Coke's subsequent attempts to get involved by relaunching www.coca-cola.com as a user-generated-content site were met with derision. "Seems that Coke loves the buzz from the Mentos-Coke deal after all, as long as they are controlling how it occurs!" one blogger wrote.

That reaction aside, Coke had the right idea in attempting to create a place on the internet where people can express their opinions about the brand.

Other companies have done the same, with varying degrees of success. In the US, the retail giant Wal-Mart has just launched its own social network site called The Hub, at www.walmart.com/school-yourway. AOL's "/discuss" campaign, which encouraged people to talk about how the internet has changed their lives, saw 4,000 users sign up and get involved in the debate.

Honda, meanwhile, has sponsored a site on the blogging network 2Talk About, where users can give their views on the company's products; Honda uses it as a way to understand what its consumers are thinking.

There is, however, no way to control what people are saying about you online, and by making the decision to get involved in user-generated content, brands also have to realise that they can no longer control their message.

"Some marketers are worried about the sanctity of their brands, but people have always taken the piss - the only difference is that now you know about it," Morris says.

Bant Breen, the executive vice-president and global director of strategic development and innovation at IPG, says that although the control issue is something that clients tend to get nervous about, you can manage the content creation process.

"Brands should not make the mistake of thinking you can send something out on the web and expect people not to try to change it or comment on it," he says. "But you can influence where it goes, monitor what happens when it leaves you and respond to it."

The agency's role

In an attempt to get a handle on how to deal with user-generated content, Interpublic, WPP and Publicis have all entered joint venture partnerships with social networking sites, while IPG also has its own user-generated content practice.

Breen says the opportunity for agencies lies in thinking beyond the usual internet advertising techniques. "If you think about everything you hear about this audience not responding to interruptive advertising, then it's clear that they aren't going to respond to banner ads either," he says.

The most common way for advertisers to try to get involved is by creating their own social network space, either as part of their own site or on popular sites such as MySpace. As well as the Coke, Wal-Mart and Honda examples, Campbell's Soup has a successful recipe exchange section on its main website, and Dove's Campaign for Real Beauty included a social network site where women could share their thoughts on body image.

Adidas took the alternative route, creating a World Cup page on My-Space that allowed people to create their own ads for the brand. More than 53,000 people linked to the page as a "friend", and 22,000 tried their hand at making an ad.

According Peter Friedman, the founder of LiveWorld, which has just entered into a partnership with WPP to offer advice on user-generated content to its clients, there are three main ways in which advertisers can get involved. The first is merely to monitor what people are saying about your brand online and attempt to respond; the second is to build a page on an existing social network site, and the third is to create your own place where people can talk to each other.

LiveWorld specialises in helping brands set up their own networking sites and, according to Friedman, a site can cost anything between $25,000 and $200,000 (though most clients spend $75,000-$100,000), plus monitoring costs of between $5,000 and $50,000 per year.

"The thing is to create additional functionality and give people the ability to connect to their friends in ways they can't achieve on their own," Blackden says.

Breen agrees. "Personally, I think brands creating their own MySpace pages is past its peak - it's a bit of a gimmick that has been useful but I don't think it's a long-term trend," he says. "There are opportunities for brands to sponsor existing conversations, and communities are also a great market research tool. There is also a lot of scope for local marketing - people don't think it's sexy but it's a huge business. You can imagine a pizza shop in a college town getting a lot out of these sites."

However difficult it might be to imagine how clients can make the most of the media, and however much the lack of control might worry them, this doesn't look like a problem that's going to go away. MySpace has just signed up its millionth member; Google has agreed to pay News Corporation at least $900 million for the privilege of selling on to sites including MySpace; and when IPTV really takes off, it's only going to be easier for people to create, upload and view each other's content.

"As an advertiser you genuinely have no choice now," Friedman says. "Whether you like it or not, this is where your users are and, if you don't show up, you are taking yourself out of the market."

Next week: The future of agencies

WHAT USER-GENERATED CONTENT MEANS FOR ...

BROADCASTERS

- A new way to reach your audience, particularly your young audience

- The chance to build a closer relationship with viewers

- Young people are turning away from TV - but now you can extend your brand across different media platforms

AGENCIES

- Holding companies are starting to invest time and money in this area - and agencies also need to look at how UGC can help their clients

- A new creative opportunity - like all things digital, this is a blank canvas

- But ad agencies need to accept that consumers might have something to contribute to the creative process

ADVERTISERS

- People have always had opinions about brands, but now they have the tools to share those opinions with a worldwide audience

- You won't always be able to control what people say about your brands

- A new market research tool

- And a new way to build a closer relationship with your target market.