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Are Consumer-Generated Ads Here to Stay?

May 10, 2006

Experts opine on the current effectiveness of consumer-generated advertising and what will happen with it in the future.

A couple of weeks ago we took an "In Focus" look at consumer-generated advertising, and now we'd like to revisit the subject from another perspective: CGA's present role and possible future in advertisers' ongoing efforts to connect with prospects and customers.

"These campaigns generate a lot of press for their innovativeness," says Mike May, an interactive media analyst and consultant with The Acorn Group, a company that programs and produces conferences on interactive media, marketing and commerce. "Essentially, GE's 'Imagination At Work' campaign [introduced in January, 2003] found a new way to use the interactive media to engage consumers. That was the innovation and that was the breakthrough, because so many people participating in the campaign says a lot about consumer willingness to engage in a conversation."

Adds Ben Wiener, CEO of WONGDOODY, a full service advertising agency doing interactive design and PR from offices in Seattle and LA: "Consumers also like the opportunity to be creative, because they feel they have some impact and some ownership. It's not just information being created and put forth by the corporation."

However, if the relatively unrestrained Converse Gallery campaign scores a "10" on the scale of tapping into consumer creativity, most other consumer-generated campaigns would score between a "3" and a "7", because they have backed off from encouraging folks to submit full-blown original video commercials. Instead, they offer more of a "mix and match" opportunity. For example, New Line Cinema recently asked fans to create mixed versions of music from the movie called "Take the Lead" by selecting from material available on the film's official website. And as mentioned in our In Focus, Home Depot, Chevy Tahoe and MasterCard have been pushing the genre toward similarly limited creative opportunities.

Success or failure of the genre?
"The Converse campaign is successful because it has received quite a number of submissions," opines Wongdoody's Wiener. "It has made a real impact in the market. The submissions have been very high quality. People are putting a lot of time and thought into what they are doing. The campaign has also succeeded in terms of press and buzz attention: they're getting a lot more value from the PR than from what they're buying in media placements.

"Subservient Chicken was great," Wiener suggests, "but campaigns that sought to walk in those same footsteps began to reach people who couldn't care less. In some ways, user-generated advertising is this year's BMW films. That was brilliant, but after it was copied a few times by other advertisers, it began to become awful and played out. You can't have other marketers piling onto the bandwagon and expect to have the same success, although that's what usually happens with these new ideas. The success of user-generated campaigns is partly due to their content, sure, but also partly to their novelty. And that's wearing off."

While there seems to be a great potential for consumer-generated advertising campaigns to flop, it's hard to find any trace of such "failures." But The Acorn Group's May is not surprised. "There could be any number that never gain any sort of broad awareness," he says. "If something is a failure, we just won't ever hear about it."

Another reason failure may not be an option is that, in many cases, these campaigns are not supported by traditionally sized media budgets. How much success do you really need to cost-justify a four-figure or five-figure campaign?

Why go this way?
Duh. Let's see: On one hand, you have six- and seven-figure creative fees for advertisements that are attracting less and less interest, and arguably having smaller and smaller impacts on sales; on the other hand, you have a source of basically free advertising with built-in audiences and tremendous potential for ancillary PR. Which one should advertisers prefer?

"The cost of producing your basic 30-second commercial has become astronomical," Wiener points out. "It's incredibly cost-effective to get user-generated content."

If that weren't reason enough, consumer-generated advertising is also a great way to measure consumers' passion for your product or brand. It's not hard to count how many people are submitting movies, for example. And there's always the potential for hitting the jackpot with a really iconic ad or discovering a new advertising genius. Advertisers are highly attuned to the vast pool of talent out there, and they know how easily good ideas can arise from the ranks of consumers.

In addition, more than a few advertisers are persuaded to try this approach by the effectiveness angle.

"Advertisers are grasping for new ways to reach people," suggests Wiener. "Consumers are now in fragmented target audiences, and the web is a critical means for communicating with them. You want to give them a sticky experience they'll tell their friends about, and the way to do this is with compelling content. Right now, users can often generate the most compelling content of all."

Jackie Huba, co-author of "Creating Customer Evangelists," suggests that advertisers like consumer-generated advertising in part because they "are finding that many of their traditional marketing strategies are less effective. Competition for time, attention and loyalty is more acute. Challenger brands are experimenting with these new ideas and finding out they can create a good deal of word of mouth backed by eye-opening results."

Of course, consumer-generated advertising is unlikely ever to replace an agency, not the least because agencies generally stay closely involved with every aspect of such a campaign. But consumer-generated advertising lets you "tap into the authenticity of a brand aficionado," says May. "Companies like Apple have been enjoying this kind of popularity for years. A woman wrote a song about how much she liked her Mac, put it on the internet, and it took off like wildfire. There's something to be said about an ad created by someone who really loves the product, versus what you get from someone who is paid."

Next: How well does CGA work, and what's its future?

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