How UGC is Re-Shaping the World of Digital Marketing

May 17, 2023

Back in 2007, when Myspace still had a significant presence in the world of social media, 6 hours of video was uploaded to YouTube every minute. Since then, YouTube has become the premier video platform online. The average American spends 24 minutes on the website per day, and over 300 hours of user-generated content (UGC) is uploaded every minute.

While Myspace failed to achieve world domination, its developers and other early social networking websites recognized the momentous appeal of user-generated content. However, no one could have predicted the extent that UGC would play in marketing in the years to come. Today, brands depend on platforms like YouTube, Facebook, Instagram, TikTok and Twitch to advertise to new users and build brand loyalty.

How Platforms Utilize User Generated Content

We are currently witnessing a transformation in how online platforms take advantage of UGC to drive engagement. Complex algorithms are designed to serve users with content they are most likely to watch and stay engaged with. What started as a recommendation sidebar on YouTube has forever changed the consumer’s journey throughout the entire internet.

Algorithms control what we see on YouTube and other social media platforms. They are the driving factor in user engagement and have an incredible influence over our purchasing decisions.  

1) YouTube

The YouTube recommendation algorithm has dramatically changed since Google purchased the company in 2006. Every users' home page and sidebar are curated to deliver UGC that is more likely to keep the user on the platform. As a result, YouTube’s algorithm is highly effective in driving engagement.

2) TikTok

Chinese developers from TikTok took UGC to another level by giving their userbase the tools to make more engaging video content. Today, TikTok is rapidly gaining traction as the go-to social network and search engine for Gen Z.

Incorporating trends, sounds and visual effects into their software give TikTok creators tools to keep their audience engaged and effectively reach new viewers. While Instagram and Facebook have been slowly limiting reach, TikTok provides every creator with the chance to go viral. The algorithm pushes all videos to feeds outside their following and tests engagement metrics. Videos that perform well are added to more feeds helping the video to reach new users.  

3) Twitch

Amazon’s Twitch platform, once used primarily for gamers, is a growing platform for all types of UGC. The infrastructure available to Twitch creators also offers new opportunities to engage with their audience. The live chat incorporates subscribers in the content, Twitch creators consistently engage with ‘Chatters,’ keeping them online for hours on end.

In the early days of Twitch, the streaming platform had about 300,000 active channels broadcasting to 100,000 concurrent viewers.  Today, Twitch has 8.5 million active monthly streamers with 31 million daily active users.

Why Brands Have to Advertise and Curate User-Generated Video?

Over the past decade, brands have been forced to shift how they interact with consumers as UGC has become more influential. Social media, streaming, and video platforms have become so effective they are now the primary source of ad spend in most advertising campaigns.  Statista predicts that by 2026, the social media advertising market will increase to 358 billion US dollars, up from the 2021 figure of 181.2 billion.

Advertising isn’t the only way brands reach consumers through UGC. Content promoting products and services has dramatically shifted from strictly ads to influencer campaigns. Brands utilize content creators to influence purchasing decisions with paid promotions. YouTube’s highest earner, 11-year-old Ryan Kaji of the channel Ryan’s World (formerly known as Ryan’s ToysReview), generated 22 million dollars in 2019, uploading reviews featuring new toys.

In today’s world, brands must advertise and promote their products alongside or directly with UGC to capture attention and influence.

How UGC Drives Critical KPIs for Brands

Whether a brand wants to expand its reach, sell new products to existing customers, or build its brand perception, UGC is a driving force in marketing campaigns. Companies primarily focus on two key performance indicators when formulating an ad spend, reaching new consumers and influencing purchasing decisions. Both can be achieved with UGC; however, achieving these KPIs on Facebook and Instagram platforms is increasingly difficult.

Reaching New Potential Customers

UGC captures the attention of an incredible number of potential consumers every day. Brands can buy ads or hire influencers like Ryan Kaji to promote their products. In addition, the amount of data generated by platforms like Facebook and TikTok gives advertisers opportunities to optimize their audience and reach new consumers who are likely to engage with the content.

Influence Purchasing Decisions

No longer are ads enough to run a successful digital marketing campaign. The average person is estimated to encounter between 6,000 and 10,000 ads per day meaning brands need more than visibility; they must tap into influence to effectively guide purchasing decisions online.

Added Benefits of UGC for Brands

UGC goes further than just serving ads to consumer and influencing purchasing decisions. Existing consumers are given value from their favorite brands in helpful information related to the products. For example, Australia’s most successful YouTuber, Claudia Morello, offers sponsored makeup tutorials from the largest cosmetics brands on earth. Users are influenced to buy products she uses and get helpful tips in the form of YouTube tutorials so they can get the most out of their purchase UGC offers additional value to consumers, allowing them to take full advantage of a product and develop a personal relationship with a brand.

Harness the Power of User Generated Content with Vyrill

Generating revenue from UGC is messy because there is a disconnect between the advertiser and the consumer. Influence is nearly impossible to measure; in addition, due to complex algorithms and non-human accounts, impressions and user engagement isn’t as straightforward as it may appear either.  

Vyrill helps brands and retailers create a unique, personalized shopping journey to reach new consumers and influence purchasing decisions with user-generated content. We use artificial intelligence to help brands bridge the gap between online video and their marketing campaigns. 

About the Author

Katy boasts two decades in B2B technology & services, spearheading growth and brand evolution. A former Adobe marketing maven for 9 years, she’s since built growth teams for 5 tech startups that have all been acquired. With a stellar record in operational excellence and creating demand, she excels at leading successful cross-functional initiatives that enable companies to scale up.

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