Cost Effectiveness of UGC Marketing & Advertising

To source or not to source? That is the question! We all know the many benefits of sourced content advertising in terms of brand authenticity, loyalty, customer engagement, etc. But what about the pricing of this type of marketing over traditional forms of marketing? When we say traditional we mean production team, actors, studio. You get it. The whole nine. Traditional forms of marketing tend to be more polished and present mostly information about a product. It can also be very time consuming where user generated content marketing has a much faster turnaround time. Of course, like all businesses, there is always going to be a budget involved for every single advertising campaign that they do. Statistics show that content marketing costs 62% less than traditional and will generate 3x’s as many leads (Demand Metric Report). Also, the risk of traditional marketing forms is in the fact that the brand won’t know the end result or its impact it will have with their consumers. Whereas, sourcing user generated content that is already made, the brand will already know what the emotion the clips incite and how it may fit the final edits. Already knowing the emotional response will also give the brand insight as to how how it will impact their audience before it even goes into market. Often times, these agencies will come in well under project budget utilizing a sourced content agency such as Locomotive. Of course, it’s not feasible to use sourced content for every single ad campaign. However, it is extremely beneficial to blend a mix of traditional and content marketing together in order to get the best use of a company’s advertising budget. 

Increasing External Brand Engagement with Sourced Content

Let’s talk about why brand engagement even matters but first, it’s important to know that there are two types of brand engagement: internal and external. Internal is that within the company through engaging with employees. External is engagement with the brand audience and what we will focus on in this article. External customer engagement is all about the emotional connection to the brand itself. This helps drive customer loyalty and word of mouth business. And let’s be real, word of mouth business is the best kind of business. People trust the people they know to steer them in the right direction. Brand engagement will also increase overall customer retention and help a brand improve on their products and/or services through getting feedback from their audience. “Literature found that customer-brand engagement exerts significant effect on organizational performance, particularly growth of sales, reductions of cost, products/services development, customer commitment, satisfaction, and loyalty” (Harrigan et al. 2017; Kumar et al. 2010). In an ever-increasing social media space, CBE (customer brand engagement) has never been easier. There are many types of ways to engage consumers with a brand, such as email newsletters, surveys, polls, contests and, most importantly, in-person customer interactions. However, in the digital space, sourced content is one of the most beneficial ways to increase customer engagement. An in depth, scientific study concluded that UGC has, “functional and emotional values (that) exert positive and significant effects on customers’ brand engagement.” But why? Why does this type of content advertising increase engagement between brands and consumers more than traditional advertising? Well, it’s simple really. People trust people. Not logos. “UGC is created by a fellow consumer for their friends and online followers. This content gives viewers a sneak peek into people’s lives and daily habits, which deepen the audience’s connection to the product.” (Forbes) Younger generations want brands to be aligned with their own personal beliefs and values. With social media channels the way they are now, people can voice their own opinions through likes, comments, shares and even direct messages to a brand on social media platforms. Therefore, since there is a positive correlation with UGC and increased brand engagement, companies should be mixing in this form of user generated content marketing to increase overall productivity.

What is it Exactly That We Do?

We always get asked what it is exactly that our company does. It makes sense. It can be very confusing for those not familiar with this type of advertising space. Let’s first start by explaining what UGC is. UGC is short for user generated content. It is content that maybe you or your sister upload to your Instagram feed or maybe your friend started their own fitness YouTube channel. Any videos and photos found online on some sort of social media platform would be considered UGC. Also, synonymously called sourced content. This is where we come in. We get those videos from creatives (users) for advertising. Yes, we just called you creative! Wink wink! This is the way that it works. An advertising agency comes to us since we specialize in this space. They are typically looking for very specific kinds of videos or photos for a commercial. Technically we are the third party in this transaction. The advertising agency is hired by a brand to create the commercial. The advertising agency then comes to us to find the sourced content they’re looking for. You’re probably asking yourself right about now, “well why doesn’t the ad agency just find the content themselves?” and the answer is that it is very difficult to do! Imagine shuffling through hundreds and maybe even thousands of videos per day trying to find very distinct videos that fit a particular brief. Agencies do not have the time or man power, especially when sourced content is a fairly new field. Some may not even know where to begin. We also take care of rights licensing legality with creatives. There are only a handful of companies in the entire world that know how to navigate the space efficiently and effectively. We are proud to say that we are one of those unique businesses. Our CEO and founder Dustin Pagliughi has been around this type of content since VHS was still a thing. He originally began sourcing videos for T.V. shows such as Top 20’s Most Amazing, Pranked and Ridiculousness. It began there and evolved into where he is now. There was a lot in between but you can sort of call him an OG in this type of sourced content. To sum it all up, sourced content is a fairly new a niche field. Brands go to advertising agencies to create commercials that need user generated content. They then hire us to find that content. We find it. The ad agency decides which content they wish to use. Then, we get the rights for the content by purchasing usage for a specified term, wrap it up all nice a pretty and sent it on back to our clients. 

The Continued Rise of UGC

As we are finally seeing the light at the end of the pandemic tunnel we can’t deny that this worldwide crisis changed us all in more ways than one. It shifted our mindsets and priorities in ways that most of us never saw coming. Some for the good and some for the not so good. In any case, it put most professionals from every background in a position of sink or swim. Adapt and evolve or face the consequences. This is also true for the advertising industry. As production shut down we saw a spiked increase in the use of user generated content in ads due to its accessibility and cost effectiveness. I mean, what better way to make the best of a bad situation when you can’t hire a team to shoot your next commercial. Brilliant really. Use what is already there and as an added bonus, people really resonate with content they can share an emotional response with. Think back to all of those “we’re in this together” commercials with clips of people banging pots and pans on their balconies and seeing family through the windows of their homes. All shot by someone who just wanted to capture a moment in time from their life. Every single person on the planet can relate to this content as we were all in the same boat at the same time. Let’s face it, the first time we all saw these commercials we probably all felt the same heartwarming emotions. Although, this type of content marketing was not new, it now took the spotlight. According to Forbes this sourced content marketing is now here to stay and not only that, it is on the rise. This makes sense as companies begin to reap the benefits of this type of advertising. So many in fact I’m not going to name them all here. That’s another blog all in itself. However, I will say that some of the top reasons to utilize UGC is that it is literally everywhere, it is for everyone, and it is authentic (ADAGE). This translates into an unlimited library of freshly uploaded content often. According to an article found in Hubspot, 31% of consumers actually find it more memorable than traditional forms of marketing. Finally, authentic content that is relatable will resonate with consumers. In short, UGC isn’t going anywhere. In fact, it’s the opposite. As the number of social media users continue to increase (Statista), it seems only natural that digital marketing will turn to sourced content from these platforms for their audiences.

Building Brand Trust with Sourced Content

Building trust in any relationship is the key most fundamental aspect for success. Having a business that provides quality products and services in today’s society is not enough to keep it afloat for the long haul. Building brand trust is important in keeping your customers satisfied and keep your business thriving. It will provide loyalty to your brand, which in turn will drive new business. It will also create public backing of the brand and increase overall marketing receptiveness in the public eye. Being authentic is the second most influential reason to trust a brand next to pricing (PwC’s 2018 Global Consumer Insights). Other reasons include fulfilling brand promises, the impact it has on society and product/customer experiences. So how does one go about navigating this space in today’s society of social media overload? The answer… Sourced content! A published Journal Study conducted in 2019 found that, “there is a positive relationship between the use of UGC, brand trust and purchase intention.” Organic user generated content is the most relatable form of influence in the world. “Consumers are 3x more likely to say that content created by a consumer is authentic compared to content created by a brand (Stackla). This is where brands can take the opportunity to create an increased connection to their audience through emotional relatability and, in turn, increase brand trust with their consumers. The use of sourced content in advertising is on the rise for this reason as well as many others. In a world where every person with a smart phone can now be a content creator, there is an infinite library of sourced content available daily. I mean, who do you actually know that doesn’t have a smart phone in their pocket right now?!?! For this reason, new content is uploaded perpetually to social platforms. So, let’s recap this. People trust sourced content, otherwise known as user generated content, more than traditional advertising. Real people stimulate real connections. It’s necessary for a business to create trust with their audience in order to remain relevant and successful. Sourced content is also a never-ending tap that keeps on flowing and changing daily. Integrating sourced content into marking strategy therefore, seems like a no brainer to heighten a brands trust with their consumers.