User generated content will attract increasing amounts of revenue this year but analysts disagree on how much and the form the ads will take. One trend is clear: Brand advertisers are increasingly placing messages in highly controlled UGC environments around target niches where the community is easy to understand and inappropriate content is unlikely to appear. In some cases, the advertisers themselves have created the spaces, or had it made with their sponsorship in mind.
Sarah Fay, CEO of Carat and Isobar USA, is an advocate of not only putting more of ad spends into user generated communities but also making strong efforts to help create the communities. If a marketer "can find ways to talk through the consumer, you will have a more powerful message," she said in an exclusive interview with JackMyers Media Business Report. In one campaign for a sportswear company (Carat represents Adidas and Reebok), fans selected their soccer World Cup dream teams by dragging and dropping "best goal" images of their favorite players in a Flash application. Some 22,000 of them put the teams on their MySpace pages. "That created a lot of advertising for us, and we didn’t have to pay for that, other than the creation of the ad," Fay says.
It’s a mistake, though, to think that "user generated" is synonymous with "low cost." Doritos scored wins both last year and this with Super Bowl campaigns that generated millions of impressions by calling for submissions from people wanting to have their Super Bowl ad chosen last year, or this year to get voted as the most popular music band. Executives say it probably cost the company more than $1 million to manage all the submissions, and the winners had been submitted by professional production houses. Marketers also have to be aware of dangers beyond the usually mentioned ones of a family-friendly product juxtaposed with rough or bawdy content like exploding soda bottles or flaming farts. Pharmaceutical companies, for example, are literally liable for what participants say in communities they help create or control, even if those comments speak positively about a brand or product.
But it’s also a mistake to be overly skittish about negative comments online when there is no legal liability. "What we’ve found for most of these great brands is that when we give a hundred moms the chance to comment, 90 percent will say good things. If ten moms say something negative, that makes it more authentic," says Michael Sanchez, CEO of CafeMom.com, an online community formed last year of mothers discussing everything from meal preparation to pregnancy, childcare, and time management. Sanchez, speaking in an exclusive interview with JackMyers Media Business Report, said the site last month had 2.5 million uniques, 120 million pageviews and an average of 82 minutes time spent on site per user. Advertisers have included P&G, Kraft, General Mills, Wal-Mart, Hewlett-Packard, Best Buy, Disney, Kimberly-Clark, Unilever and J&J. The site’s content is nearly all user-generated, and the discussion sometimes revolves around a product or service provided by a sponsor that CafeMom passes along to a select few. "At the beginning (for marketers) it was ‘oh my God, what’s going to be said about my brand?’ Then they realized consumers and moms talk about their brands all the time, anyway," Sanchez says. "I don’t want to make a comparison with MySpace or anything else, but to reach moms it’s a place (advertisers) want to be."
Marketers will soon find more ways to target mass audiences in UGC arenas as well. Bear Stearns research analyst Spencer Wang and colleagues Shub Mukherjee and Stefan Anninger found in a survey that men 18 to 34 called user-generated video their favorite form of online video, and that they’d rather see short ads than pay a subscription. That’s a big endorsement from an increasingly difficult audience to reach. Big brand advertisers will also start to gravitate to the less controlled mass video environments like YouTube and Metacafe. Lehman Brothers’ Doug Anmuth thinks Screen Digest’s estimate of ad revenues to user generated video growing from $515 million in 2007 to $956 may be high but does believe that "more robust filtering, monitoring, and targeting tools" (JackMyers Media Business Report, July 9) will give advertisers a more "well-lit" environment with more control over ads. With new sophisticated formats like YouTube’s "lower third" clickable overlays, the viewers might even stick around to watch both the ads and the content.
Sarah Fay can be reached at Sarah.Fay@Carat.com
Michael Sanchez can be reached at email@example.com
Dorian Benkoil is a regular contributor to JackMyers Media Business Report.
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