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The effect of user generated content on companies

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As Hinton and Hjorth (2013,p.57-61) mention, social media has emerged from web 2.0 technologies, which has led users to be participants and prompted them to produce user-generated content (UGC). With deeply analysis of this phenomenon, an increasing number of companies have got grip of UGC. Some commercial practitioners believes that great UGC is likely to increase purchase behaviour, enhance brand values and help marketing metadata research, while opponents argue that these contents has copyright issues and managerial difficulties. In addition, it is worthwhile to explore how do companies motivate user to create UGC.

  • Increase purchase behaviours

As a part of social media campaign, UGC is seems as a highly engagement of users, which is likely to result in the growth of purchase behaviours. Obviously, UGC is a bond which links to customers and brands. Through these creative contents, users are able to have board understanding of the marketing campaign and company culture, and then UGC are possible to stimulate consumption behaviour (Malthouse et al., 2016,p.427-444).

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In the social media campaign named the Air Miles Reward Program in Canada, Malthouse and his team used 10 bonus reward miles to encourage user to share stories in winter. Although companies value 10-mile incentive at just 1 Canada dollar, over 6000 people contributed to this campaign. According to the evaluation of entry model and opening model, people who actively participated UGC elaboration had better behavioural response than usual consumers who did not share experiences. Consequently, UGC is regarded as an effective engagement tool in social media campaign. However, it is not easy to measure the effect of UGC on long-term consumption behaviour, so some research solely focuses on the immediate results that users were aware of and involved the social media campaign. As a result, short-term user participation and ongoing purchasing behaviour both require companies to consider and assess, which is an important condition of a successful social media campaign.

  • Enhance brand values

Moreover, the influence of UGC on brand value is a marketing consideration in a social media campaign. Due to the closer relation between companies and customers, UGC provides users opportunities to form personal meaning of the brand (Andéhn et al., 2014,p.132-144).

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On the one hand, this shaping process means brand values has co-created by costumers. As a result, they are able to enhance the brand value and develop the brand loyalty. On the other hand, this interactive process is more effective than traditional promotion. Based on UGC, companies would achieve the success of one-to-many communication because users have a chance to interactive with their followers. For example, Andéhn and his colleagues collected much data about a word “Stockholm” in Twitter. They found that users have shaped different themes in 33952 tweets over 3-month period, such as Sweden/Swedish and Syndrome.

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Another example is a car brand MINI. Dennhardt and his peers constructed a fan page in Facebook and posted a questionnaire among users. Their finding demonstrates the engagement of user in social media contents enhanced brand awareness of users (Dennhardt, 2014,p.100-105). As a consequence, UGC is a new resource of the brand formation for companies.

  • Help marketing metadata research

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The last part is about the analysis of metadata in market research. UGC is a visible involvement of online users in a marketing campaign, and is a necessary part of campaign monitoring. According to Wyrwoll (2014,p.35), companies can collect metadata that related to the reflection of products, brands and companies, and assess UGC to adjust public relation strategies and promote the development of campaign. He also points out that many companies including Attensity and BIG, use this UGC to analyse the result of social media. Furthermore, the study of UGC metadata would support companies to sharp board understanding of the virtual world and organise optimal marketing activities in the future (Dennhardt, 2014,p.37-39).

 

  • Critics 

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However, for corporations, UGC has some controversial issues about intellectual property and management problems. Firstly, there is a continuous discussion about the ownership of copyright. In 2012, an Australian DJ Fernandez produced a song that mixed some clips of the song named Bon Bon. He put this song into his official website and had commercial promotions for the concert propaganda. Although Bon Bon did not release in Australia, the behaviour of Suave was regarded as the infringement of moral rights (Australasian legal information institute, 2012). As a result, while this case might be a personal behaviour, corporation should consider potential risks in the legality of UGC.

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Similarly, when companies use UGC as the commercial promoting source, the admission of the author requires corporations to acquire. The last problem is about management. UGC is an open-hierarchy system that the right of content generation open to public (Sawhney & Suri, 2014,p.235-236). Therefore, it is difficult to control the whole process of UGC because nobody knows who are the creators and what is the kind of contents could be generated.

  • Incentives solutions in Across 

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Certainly, the effects of UGC on companies are massive. As a consequence, how does companies encourage more users to produce UGC has become a vital problem. It could be separated into two parts: intrinsic and extrinsic. Based on many studies related to UGC, this part will combined with my social media campaign: Across and real examples.

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First of all, the inherent motivation mainly hinges on the quality of the social media campaign. In Across, the social media campaign calls for more users to share experiences in new journeys, which might evoke the memory of users and stimulate them to generate contents. Meanwhile, according to different social platforms and target audiences, the encouraging contents written by Across have different styles. In twitter, the expression is short but clear while the counterpart of Instagram focuses on lyric prose.

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Moreover, it is notable to explore extrinsic factors: economic motivation and social advantages. Economic motivation is about reward when participated into UGC, such as voucher and prize. As the Air Miles Reward Program shows, 10-miles reward is an extrinsic encouragement. Across provides discount vouchers and free rides, which inspired riders and drivers to share stories in Across service. Another extrinsic inspiration is social motivation. Users who are keenly participated into the campaign are likely to be popular in social platforms. In across campaign, people who posted the most popular story will have the title of “ story winner”, which satisfied with the inspiration of social benefits.

According to a survey about the attitude of two incentives in 2014, Poch and Martin (2014,p.309-315) found economic motivation produce greater influences than social advantages. Furthermore, the percentage of profitable benefits in Across is more than the proportion of social inspirations although the campaign lack of adequate user supports.

 

  • Conclusion

UGC is not only a highly participation of users in social media campaigns, but is also an interactive communication between companies and costumers. For the perspective of corporations, these opinions created by users are considered as valuable marketing resources because UGC stimulates consumption behaviors, enrich brand equity and extend marketing research. In order to achieve better UGC, some research and the Across social media campaign suggest that companies are necessary to motivate users for intrinsic and extrinsic aspects. In extrinsic part, firms should majorly focus on the profitable incentives, not just relies on social encouragements.

Reference

Andéhn, M., Kazeminia, A., Lucarelli, A., & Sevin, E. (2014). User-generated place brand equity on Twitter: The dynamics of brand associations in social media. Place Branding And Public Diplomacy10(2), 132-144. http://dx.doi.org/10.1057/pb.2014.8

Australasian legal information institute. (2012). Perez & Ors v Fernandez [2012] FMCA 2 (10 February 2012). Retrieved 21 April 2016, from http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FMCA/2012/2.html?stem=0&synonyms=0&query=title(perez

Dennhardt, S. (2014). User-generated content and its impact on branding (pp.100-105). Wiesbaden: Springer Fachmedien Wiesbaden.

Hinton, S. & Hjorth, L. (2013). Understanding social media (pp. 57). London: SAGE Publications Ltd.

Malthouse, E., Calder, B., Kim, S., & Vandenbosch, M. (2016). Evidence that user-generated content that produces engagement increases purchase behaviours. Journal Of Marketing Management32(5-6), 427-444.http://dx.doi.org/10.1080/0267257x.2016.1148066

Poch, R. & Martin, B. (2014). Effects of intrinsic and extrinsic motivation on user-generated content. Journal Of Strategic Marketing23(4), 305-317. http://dx.doi.org/10.1080/0965254x.2014.926966

Presi, C., Saridakis, C., & Hartmans, S. (2014). User-generated content behaviour of the dissatisfied service customer. European Journal Of Marketing48(9/10), 1600-1625. http://dx.doi.org/10.1108/ejm-07-2012-0400

Sawhney, H. & Suri, V. (2014). From hierarchy to open configurations: decentralization and user-generated content. Media, Culture & Society36(2), 235-236.http://dx.doi.org/10.1177/0163443714526551

Wyrwoll, C. (2014). Social Media (pp.35). Wiesbaden: Springer Fachmedien Wiesbaden.

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2 thoughts on “The effect of user generated content on companies

  1. You have well demonstrated the key concept of UGC by explaining the benefits of UGC in social media marketing and some critical issues such as copyright infringement and management problems. It is a fact that nowadays we can all be the contributor, produser and curator on these social network platforms, and everything we produce is not restricted to any format such as plain text, video, images and even multimedia forms. Therefore, UGC is such a valuable and powerful tools for social media practitioners to better improve their campaign. By harnessing people’s unlimited creativity, marketers is more likely to achieve their goal so as to increase audience’ loyalty and stimulate their consumption behaviors.

    As for the designed social media campaign, I agree with your recommendation that companies should give more profitable incentive as one kind of economic motivation for their customers so as to better engage with the target audience. In fact, when I was designing my social media campaign I came across the same situation: what if the audience are not interested in my campaign even though everything has well planned? So I add some bonus which is tangible and valuable to my target audience. Nothing is more effective than giving people things or value that they can actually own.

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  2. It is very intriguing to talk about the influence of UGC on business. In the article, Nancy mentions that UGC is an effective tool for companies to increase purchase behaviours, enlarge brand values as well as evaluate marketing performance.

    Firstly, companies tend to build a two-way communication with stakeholders through campaigns on social media. The communication aims at collecting customers’ opinions in regards to the brand and products, in order to make adjustment for influencing customers’ purchasing behaviours. GoPro’s Skateboarding Cat campaign earned highly engagement on Instagram. Secondly, brand values are more easily to be delivered by companies through social media campaign. The Burberry’s Snapchat Pre-show is a successful example to disseminate Burberry’s unique brand value – curiosity, whereas other fashion brands hate spoilers. Similarly, SK II Change Destiny Campaign is extremely powerful to deliver their brand values to the public. Thirdly, UGC is necessary for companies to conduct online monitoring. Analytics on social media platforms such as Facebook and Twitter give companies a deeper understanding of their customers and their marketing activities.

    In the end, I appreciate that Nancy also indicated the critics of UGC concept when companies apply it in business. This helps people understand UGC in a more objective perspective.

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