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Is UGC Dead? What’s Next For High-Conversion Online Advertising

Is UGC Dead? What’s Next For High-Conversion Online Advertising

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Last Updated:  
June 6, 2023
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Everyone’s an influencer, both theoretically and realistically. The rise of social media and everyone (and their grandma) sharing things online has led us to where we are today: user-generated content (UGC) is so oversaturated and inauthentic that we don’t even know who to trust anymore. If every ad you come across is some gal telling you how a product changed her life, then we just must be surrounded by life-changing products and experiences, right? Probably not. In this article, I’ll detail the rise and fall of UGC and how it might be time to explore a different way to reach your ideal audience with your ads.

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Socializing Online = Talking About Products

In the early days of social media, Facebook, YouTube, and Twitter made it very easy for every human with access to the internet to make their opinions known, and for better-or-worse, it completely changed how we all communicate with each other. It didn’t take long for companies to realize the power they had at their fingertips to promote their brand, and what began as honest sharing of a product a customer liked turned into a separate advertising arm. Honest and authentic user-endorsements were so valuable and highly likely to convert; many studies have shown that influences of friends or peer groups is likely to impact purchasing behavior. According to GlobalWebIndex, 54% of social media users are using the platform to research products, and 71% are more likely to make a purchase based on social media referrals. With numbers like that, it’s pretty clear how UGC took hold of the marketing content on social networks. Brands encouraged users to create and share content related to their products or services, and it was all golden for a long while! Not only was this a cheap way to get eyes on their products, the content was converting. Authentic content was king. 

Why UGC Became the Dominant Advertising Machine

From the humble beginnings of consumers honestly sharing content, the evolution of UGC came in the form of paid campaigns. Brands encouraged consumers to create their own ads/content and submit them for a chance to either be featured or win prizes. The consumer themselves would benefit from exposure or winning the featured product, and the brand would tap into their creativity and the engagement spurred from the unique content. With the rise of Instagram, brands created unique hashtags for their company or product to encourage social sharing and build community. Getting personal with customers and creating community was the key to a lot of brands’ success in recent years, especially during the COVID-19 pandemic, when we spent a lot less time in close proximity to each other. Using actual humans to tell stories allowed brands to connect on a personal level, which was invaluable during a time such connections were lacking. 

Besides the connectivity portion, advertising using UGC was simply easy for brands. They didn’t need a full production studio or to pay videographers to create commercials, they just needed Sally with an iPhone. Apple probably contributed heavily to this type of content with their ‘Shot on iPhone’ campaign which displayed the images captured by 77 photographers on giant billboards in 24 different countries around the world. They didn’t use fancy product photography (as they usually do) to talk about the iPhone camera, they simply showed us what the iPhone camera could do. It was genius, unsurprisingly, and the high-quality cameras that have evolved on iPhone and Android devices ever since have made it possible to capture HD with a piece of technology that lives in your pocket. Anyone can be a photographer, which means anyone can be a part of a marketing campaign. 

UGC rose to prominence because it was real! Most people respond well to authentic user-generated content because it came from the right place: a person just sharing what they loved about a product in a post or short video. When someone evaluates a product by sharing their personal experience, it really makes us feel like we’re part of the ‘in-crowd’. UGC also allows individual expression and creativity to shine through and is often felt to be more authentic than most advertisements.  

A collage of screenshots of user generated content from Youtube, TikTok and Instagram.

The Oversaturation of User-Generated Content 

What began as honest content turned into paid campaigns and created an actual industry of “influencers”, the next thing your kid wants to grow up to be (I know many parents whose child aspires to be The Toy Opener Kid). Influencers are now paid to make UGC, which means the authenticity has mostly gone out the window. Content creators are paid to generate engaging and entertaining material for brands, but there seems to be a shifting pattern in content consumption. Where UGC once led the way, we now see a prevalence of professionally-curated content, branded content, and influencer-led content. Sally with an iPhone isn’t going to cut it any longer, and there are a few reasons why: 

  1. Quality control: when brands are utilizing UGC, they lose control of the kind of content each user contributes, leading to inconsistent quality content. A lack of good content could mean lack of customer interest and engagement, and ultimately less sales.
  2. Content saturation: straight up, there’s just too much UGC out there. Everyone is getting bored, and our attention spans keep getting shorter. If I am swiping through the For You page on TikTok and it’s the same UGC-style ad but a different product, I’m just not even paying attention anymore. When it comes to driving sales, that’s no bueno.
  3. Credibility concerns: not all UGC can be reliable or factual, which leads users to question authenticity. If a customer is questioning the authenticity of the ad, how do you think they feel about the product?
  4. Lack of expertise: The right person needs to be promoting your product, and if the user generating the content doesn’t have the correct expertise or specialization, it won’t pass the sniff test. 
  5. Authenticity: It’s why UGC worked in the first place, and it’s why it doesn’t feel right any longer - the rise of sponsored content and paid partnerships have made it clear that sponsored content is disguised as genuine UGC. It just feels icky to consumers, and they’re not buying it (literally or figuratively). The same can apply to fake reviews and phoney UGC content. It’s caused us to all be just a little more skeptical.

What Consumers Want: Stop Lying to Me and Entertain Me

Let’s get back to the more polished, high-quality content that is reliable, informative, and entertaining. Nick Shackleford, Co-Founder and CRO at Konstant Kreative, recently joined Ash and Rabah on our Adspend podcast to discuss the future of marketing. Nick specifically touched on why he believes UGC is no longer the way to go, and using higher-end video/imagery is the future. For his specific brand of cannabis and mushroom infused next-gen social tonics, Brez, Nick’s team focused on elevated, CGI-enhanced imagery which matched the brand’s vibe. The imagery is meant to be a little mind-bending, and inviting through the whole experience.

Brez’s brand is clear, attractive, and fun to engage with. Ads that focus on captivating an audience will see a rise in utilization in the years to come, and are an important part of any future marketing strategy. Consumers are utilizing streaming platforms, social media, and other video-sharing websites more than ever, and grabbing attention with engaging content is the way to reach them. Since video content remains the most dynamic and immersive in nature, it’s a preferred choice over other forms of media. 

The most effective ads have:

  1. Great storytelling: Again, entertain me while evoking emotions, addressing pain points, or provoking curiosity. 
  2. Visual appeal: A well-produced ad is visually stunning and can hold the customer’s attention. 
  3. Clear messaging: Get to the point and make sure it lands with your target audience.
  4. Strategic placement: You can use advanced targeting options on platforms like YouTube or TikTok to pinpoint the right demographic, or specific interests or behaviors. Don’t just run ads willy-nilly.
  5. Have a Call-to-Action (CTA): Your ad should make me want to do something (like make a purchase) and drive me directly to do so from the ad, for example: “buy now”. 

Center Your Data to Maximize ROI

It’s not enough to just run cool creative, you need to analyze and iterate the creative based on how those ads perform. Many companies don’t have a handle on this, because it’s hard to manage all of that data. But it’s truly the key to marketing success! 

To be data-driven in your ad spend, you need to leverage the insights and analytics to inform ad targeting, messaging, and campaign optimization. When you center your ads around the data you have at your fingertips, you can create ads that are precisely targeted to improve ad relevance, which means they’ll land with the right potential customers. 

By optimizing ad performance and tracking key metrics like impressions, click-through rates, and conversions, businesses can understand the effectiveness of their campaigns. One great way to do that, and to evaluate your ads’ performance across multiple platforms, is by using Triple Whale’s Triple Pixel. 

To conclude, UGC is still relevant for many small businesses, but in the oversaturated environment of social media, it will be wise to adopt new advertising strategies in the current landscape. Depending on the personality of your brand, options might include high-quality video content meant to engage and entertain versus quick influencer-driven explainer videos. Whatever method you choose to advertise, make sure you’re watching how your campaigns perform to focus on the best return on your investment to drive sales.

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