user-generated content (july 2007)

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User-Generated Content

What Happens When People Have the Power?

Paul VernaSenior Analyst, Digital Media & Entertainment

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User-Generated ContentWhat Happens When People Have the Power?

Who we are What is user-generated content? What does UGC mean for brand marketers? Who are the creators – and consumers – of

UGC? Case studies UGC FAQ:

Is UGC a fad? Can it be monetized?

How much ad revenue will UGC sites realize?

Tips & takeways Q&A

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eMarketer Sees and Analyzes Information from Multiple

Sources

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eMarketer Sees and Analyzes Information from Multiple

Sources30,000-foot

view

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What is user-generated content?

User-generated content (UGC), also known as Consumer Generated Media, refers to various kinds of media content that are produced by end-users (as opposed to traditional media producers such as professional writers, publishers, journalists, licensed broadcasters and production companies).

source: Wikipedia

?

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grainy poorly composed

unevenly lit

unprofessional

uninteresting

So … why do we care?

1,257,245 views

5,803 comments

“Favorited” 4,395 times

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MySpace had an 80% market share

of visits among social networking sites in the US in February 2007

(Hitwise)

Projected US ad spending on MySpace:

2007: $525M2008: $820M

(eMarketer, May 2007)

“God knows what we’re going to do with MySpace.”-- Rupert Murdoch, chairman, News Corp., Wired, July 2006

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It was also the top Web site in the UK featuring UGC in July 2006 -- ahead of MySpace and YouTube (comScore Media Metrix)

Wikipedia was the top education/reference Web site in the US, ranked by visits, in March 2007 (Hitwise)

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Photobucket is the leader in photo sharing, with 40% of the

US market, by visits (Hitwise)

Photobucket’s projected 2007 ad revenues = $25M

(Photobucket data)

MySpace acquired

Photobucket for $250M

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officemax.com – “Elf Yourself”

36 million visits

11 million created and e-

mailed worldwide

2 million Google inquiries

peak visitor rate:11 visitors per

second -- or 950,000+ per

day

20% increase in online traffic

during holiday period

$2.5M in “free” media -- Good

Morning America, USA Today, MSNBC, VH1, Entertainment

Weekly

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“One of the most important results of [the]

viral push was that it held the interest of consumers, most of

whom spent six to nine minutes playing with the make-your-own monkey

emails.”-- Wall Street Journal, 12/22/06


careerbuilder.com, “Monk-e-mail”

80 million Monk-E-Mails were played in

2006

careerbuilder.com site traffic

rose by 34% in 2006

“One of the most important results of [the]

viral push was that it held the interest of consumers, most of

whom spent six to nine minutes playing with the make-your-own monkey

emails.”-- Wall Street Journal, 12/22/06

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What drives the UGC revolution?

?Democratization of

contentEasy-to-use

tools

The Internet as a distribution medium

Low cost of entry

“cool” factor

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UGC “through the ages” ;-)

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What does this mean to marketers?

?

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073912

Attitudes of US Advertising Executives toward Advertising on a Blog or User-Generated Content Site, 2006 (% of respondents)

Useful for niche advertising, but will not have an effect on major accounts

User-generatedcontent site

41%

Blog

81%

76%

70%

62%

Note: n=140 advertising industry leadersSource: American Advertising Federation (AAF), “Survey on Digital Media Trends,” June 2006

www.eMarketer.com

Advertisers should exploit the viral marketing opportunities

91%

Concerned about the ability to control brand/product image

Too risky to advertise with due to lack of predictability of the editorial environment

67%

53%

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0

15

30

45

60

75

90

105

2006 2007 2008 2009 2010 2011

75M

101M

Source: eMarketer, June 2007

Who is consuming UGC in the US?

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0

50

100

150

200

250

2006 2007 2008 2009 2010 2011

128M

254M


Who is consuming UGC worldwide?

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0

20

40

60

80

100

2006 2007 2008 2009 2010 2011

64M

95M


Who is creating UGC in the US?

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35% of US Internet users have created and posted

content online-- Pew Internet &

American Life Project

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40% of US Internet users

are creating their own user-generated

content-- Deloitte & Touche

USA/Harrison Group

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0

50

100

150

200

250

2006 2007 2008 2009 2010 2011

118M

238M


Who is creating UGC worldwide?

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Case Study: Mentos/Diet Coke

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Case Study: Mentos/Diet Coke

Mentos sales increased 15%

following the viral campaign and stayed

5% ahead of benchmarksCoke

sales rose

5%–10% followin

g the Mentos craze

3.5 million hits on eepybird.com

5 million views on revver.com in 6

weeks251 liters of Diet

Coke1,506 Mentos

mintsMarketing support from Coke and

MentosFeatured on Letterman, Today

Show, NPR, WSJ, etc.

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Case Study: Chevy Tahoe

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Case Study: Chevy Tahoe“We anticipated that there would be critical

submissions … We knew we were going to get some bad with the good. It’s part of playing in

this space.”-- Chevrolet spokeswoman Melisa Tezanos

Voted No. 4 on CNN Money’s list of the 101 Dumbest

Moments in Business for 2006.

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Case Study: MasterCard

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Case Study: MasterCard

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?Is user-generated content “a

fad”?

My 2¢?

Grainy video of yellow lab puppy

= FAD

Having 2,100 “friends” =

FAD

Living your life through an avatar =

FAD

The power to influence brand perception =

PRICELESSThe power to shape political discourse =

PRICELESSThe power to easily create

and share ideas, songs, photos, videos, films, articles, blog entries,

inventions, etc. =

PRICELESS

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Is user-generated content “a fad”?

0

15

30

45

60

75

90

105

2006 2007 2008 2009 2010 2011Source: eMarketer, June 2007

75 MILLION can’t be wrong

101 MILLION can’t be wrong

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Is user-generated content “a fad”?

“User-Generated Content (UGC) Is Not a Fad”

“In our recent online video survey, UGC is the No. 1 and No. 2 most

popular content category among men aged 18-34 and among all

respondents, respectively.”

“UGC now accounts for 13% of total U.S. Internet traffic, up from 0%-1%

in 2004.”

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?Can UGC be monetized?

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Can UGC be monetized?

“We believe the answer is ‘Yes.’”

“Text-based UGC (like blogs and social

networks) has been monetized through

paid search.”“In a video-centric broadband world,

targeted video advertisement could be one monetization

mechanism.”

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US ad revenues at UGC sites

$1B

$4.3B

43% CAGR


$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0$4.5

2006 2007 2008 2009 2010 2011

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$0$1$2$3$4$5$6$7$8$9

2006 2007 2008 2009 2010 2011

Worldwide ad revenues at UGC sites

$1.6B

$8.2B

51% CAGR


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Tips & Takeaways

User-generated content is NOT A FAD

Don’t underestimate the size of the audience … or its level of engagement

Provide easy-to-use UGC tools … but don’t lose control of

your brandLet go

HAVE FUN !!

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Questions? Comments? Feedback?

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Questions? Comments? Feedback?

To get a copy of this presentation, please drop by with a business card or contact me at:

[email protected]

THANKS!!

user-generated content (july 2007)

Technology