User-Generated Content Creates Value for Brands and Content Owners

User-Generated Content (UGC) often acts as social and cultural currency that reflects a loyal fan community and may provide valuable information to brands. Economists have long embraced the Pareto Principle which states that 80% of spending is made by 20% of the consumers. Thus, implying that a brand makes most of their revenue through a devoted few. While the math is not always precise, the Pareto Principle has been very evident within the digital economy. According to a 2013 Nielsen Consumer Report, one-third of consumers account for more than 70% of all entertainment spending, and over 79% of all video-on-demand spending. Expression-based marketing attempts to identify those devoted consumers and understand how they react to the content and brands. Monitoring and analyzing audience expressions may assist in understanding dedicated fan communities, as well as, guide business decisions that are aligned with consumer behavior and the environment.

While many agree that identifying the most enthusiastic consumers is important, they also admit that it is incredibly difficult. UGC may provide a unique opportunity for brands to observe consumer expressions and fan communities in a meaningful way. A UGC creator or seller has invested a considerable amount of time in developing content; thus, it is direct evidence of engagement with the underlying intellectual property. Some creators spend many hours designing a t-shirt, editing a video, or creating artwork that pays tribute to branded content. Similarly, buyers often seek out creative UGC products that speak to their special relationship with brands. Their purchase is an obvious expression of consumer preference, one that should be considered alongside other sales data.

Marketing principles indicate that brand interactions correlate to consumers’ emotional and intellectual connections with brands. Today, consumers are also content users and those that actively create may be the most emotionally invested in brands. As users, they cultivate dedicated communities and communicate preferences through their own creations. Encouraging user-generated content could motivate more consumers and help build long-term relationships by expanding emotional investments in brands. Many of the most devoted fans share content on social media, create clothing declaring their comic book allegiance, or produce YouTube reviews of products. As consumers build new points of contact with content, it provides an opportunity to document and analyze their preferences and behavior.

UGC can provide an in-depth view of the vital 20% of consumers that generate 80% of the revenue. It provides insights into how consumers respond to content with unprecedented granularity and generates useful analytics about consumer behavior. UGC marketplace listings may provide comprehensive details such as, which characters sellers and users are drawn to, and what kind of products they wish to see branded. Listings can function as precise consumer opinion surveys that measure users’ engagement with specific elements of a brand’s intellectual property. The presence of novel products in UGC marketplaces could point to areas where content owners have failed to meet their most devoted fans’ unique demands. Additionally, each listing and purchase generate valuable analytics such as consumer demographics, upload and purchase times, pricing data, and geographic information. Moreover, this data may be useful to target consumers with official content. 

User-generated content might be a good indicator that a loyal community is actively engaging the brand and content. These unsolicited actions are evidence that consumers are actively invested in the content, and as a result, are potentially promoting brands. Creators and Sellers could represent a significant part of the most valued consumers, and analyzing UGC may provide compelling insights about the content and users. When consumers make any unsolicited interaction with content, content owners and marketplaces should consider documenting the resulting information. Read more here to learn how Source3 helps brands and marketplaces derive value from UGC data.

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