Last Updated: November 16, 2020
Guide: Consumer Generated Marketing
- What is Consumer Generated Marketing?
- Who Uses Consumer Generated Marketing?
- Who Responds to Consumer Generated Marketing?
- How is a Consumer Generated Marketing Plan Developed?
- What types of careers work with Consumer Generated Marketing?
- How can a marketing school help you succeed?
- Attributes, Skills and Education Required
In 2008, there were almost 116 million U.S. Internet users that consumed some form of user-created content, according to eMarketer. The number is expected to increase to 155 million by 2013. These consumers write product opinions online, and people respond by taking them into consideration when they shop.
Consumer-Generated Marketing (CGM) is changing the way companies seek out customers. Consumers don’t use companies’ advertisements to help them decide whether to buy their products as much as in the past. People born between 1977 and 1994 say that the product opinions strangers give online are more important than those of family and friends. This group wields about $200 billion in purchasing power, and it will soon pass Baby Boomers as the largest consumer group in the nation, according to Corey Eridon of HubSpot Blog, an inbound Internet marketing blog.
What is Consumer Generated Marketing?
CGM is an inexpensive marketing strategy consisting of two components: companies inviting customers to create material for an advertising campaign, and responding to what consumers say about their products. The main ingredient is consumer-created content. (See also User-Generated Marketing)
Consumer-created content includes product reviews on blogs, articles, e-newsletters, and message board and forum comments. Short product review videos on YouTube, podcasts, photo sharing, and photo tagging are popular multi-media formats. Consumers pass this content along through social networking, emailing, and posting it to different sites.
A company cannot completely control this type of marketing, but it is possible to help direct the flow by participating in online conversations about the products. Companies join sites where customers share their reviews and actively contribute to the conversations. In addition, businesses listen to and acknowledge customer feedback, building trustworthiness and transparency. Without positive relationships, customers’ reviews can take any turn without a company’s input. (See also Relationship Marketing)
Why Companies Should Invest in CGM
- 65% – 18-24 year-olds who consider reports about products on social networks before buying
- 67% – Purchasers who use the Internet to learn more about a product before they buy
- 25% – Percent of large brand’s search results that are user-generated
Companies can also initiate CGM projects by asking consumers to participate in contests in which they submit user-generated content. The content comes in many forms: commercials, photos of customers using the product, or perhaps compelling stories relating how the product affected their lives. Consumers are asked to reinvent the brand’s jingle, create something innovative, or submit ideas to make the world a better place.
For example, Folgers asked customers to re-write their famous jingle. Queensland Tourism asked people to submit entries for its Best Job in the World Campaign – managing tourism of an Australian island. Pepsi created the Refresh project in 2010, which gives $20 million in grants to people who want to help others.
While CGM can increase exposure and sales, it can also lead a company to pay too much attention to the opinions of a small segment of their customer base. Other product users may not be as vocal online about their opinions. A company can make hasty marketing and product development decisions based only on Internet chatter. It is beneficial to couple online reviews with other forms of customer data, such as surveys and focus groups.
Who Uses Consumer Generated Marketing?
Frito-Lay launched one of the most successful CGM contests on record. Its 2006 “Crash the Super Bowl” contest was part of the company’s larger effort to include consumers in their marketing. Consumers sent in their own Doritos’ ads; people voted for their favorites online; and the winners won prize money. It was $25,000 for the finalists and bonuses if the ad placed in the top three on the USA Today Ad-Meter.(See also Promotional Marketing)
Doritos follows the success of their consumer-created ads by tracking media value, brand equity, online contest currency, and pass-along value. These have each risen in the years since the contest, and so have sales. In addition, Frito-Lay received plenty of free ads, and compiled the best ones into its 2011 advertising campaign.
Companies seek ad content from consumers to increase their customer bases and cultivate relationships with past customers. CGM connects businesses with past and current customers on an individual level and increases their visibility as trustworthy companies.
While businesses of all sizes use CGM to increase their profits, nonprofit organizations, such as associations and advocacy groups, also employ CGM to spread the word of their work and raise funds. For example, American National Cattlewomen gave Joel Levinson, a serial CGM entrant, an iPod for winning a CGM contest. Nonprofits receive online exposure when they sponsor a CGM campaign as well as free marketing ideas from talented contributors.
Who Responds to Consumer Generated Marketing?
Young, Internet-savvy consumers, in particular, respond well to CGM campaigns. Brand loyalists typically create CGM ads, and they are happy to spread the word about their creations, as well as the brand or product they are promoting – or bashing – all over the Internet. People looking to buy a product may watch their videos, read their blogs, and then pass the word on to other consumers online or by traditional word-of-mouth. (See also Word-of-Mouth Marketing)
Recall Joel Moss Levinson, the man who won the nonprofit CGM contest. He has earned about $200,000 in prizes and cash by entering many other CGM contests. He is a college drop-out and has held dozens of regular jobs, but his skills seem to lie in writing catchy and creative jingles. Two other contests this CGM fan won were sponsored by Klondike and Best Western. While his overall lifestyle may not reflect that of the stereotypical consumer who responds to CGM, he is young and enjoys being online.
Typically, consumers would rather watch a CGM advertisement than one created solely by a marketing firm. CGM is created by customers for customers. It speaks to their concerns, interests and desires more than an ad created in an isolated conference room.
How is a Consumer Generated Marketing Plan Developed?
A CGM plan develops on two fronts. First, a company must keep track of their online reputation. Marketers can do this through specialized software that logs online content about their company. The company can then respond to critiques by joining online review communities, posting comments on vlogs or blogs, or posting a statement on its Facebook page or company website.
A business can also allow customers to review and rate products directly on their website, helping to create transparency and openness. The company plays a central role in what people are saying online and gains a reputation for listening and responding to customers’ opinions.
What is CGM2?
- Moblogs – blogs that let users post pictures from mobile devices
- Photo tagging and sharing
- Vlogs and personal videos
Second, marketers can design and implement contests in which customers can respond with content they create. Innovative contests attract the highest number of content submissions. While the public begins voting to choose the best entry, contestants spread the word to gather votes for their submissions. At this point, a company receives initial exposure from the project as word of the contest spreads and voting for entries begins. (See also Buzz Marketing)
Finally, the company awards prizes such as money, trips, tickets to special events, or the chance to meet a celebrity to the winners. The marketing team then incorporates the best entries into an advertising campaign. This shows consumers that the company cares about incorporating their views and ideas, and helps build positive, lasting relationships. Customers are more likely to purchase again, and the company develops a reputation for being caring and involved with clientele.
In the case of Tourism Queensland, the organization employed a CGM campaign by offering “The Best Job in the World.” The campaign took off and received worldwide attention when it promoted a job that included snorkeling, blogging, and feeding fish. Over 35,000 people applied for the position, and public voting narrowed it down to just 16. The 16 finalists were flown to Australia, where finally a U.K. resident was hired for the $75,000 six-month position. The BBC and CNN covered the campaign, and the Tourism Queensland website received more than 55 million page views. In the case of Tourism Queensland, no consumers returned to the website to make repeat purchases. However, the campaign received media coverage that reached three billion people due to their original, innovative CGM campaign concept.