Posted July 5, 2007 6:24 pm by with 7 comments

Tweet about this on TwitterShare on LinkedInShare on Google+Share on FacebookBuffer this page

Many a marketer contemplates using user-generated content and other forms of social media. Despite evidence of truly good UGC campaigns, marketers continue to express doubt about the usefulness of UGC and social media.

Studies show marketers and consumers doubt UGC and social media
The E-Commerce Times reports today on a JupiterResearch study released Saturday. The study stated that “The majority of online shoppers who have used social and community sites while researching and purchasing do not believe that such sites affected their purchase decisions, and few online shoppers said they spend incrementally more due to their use of social and community sites.”

JupiterResearch analyst Patty Freeman Evans told the E-Commerce Times:

Retailer[s] should take a pause from all the hype they’ve heard about social networking and social media because those sites are not something that’s going to immediately drive incremental sales for them.

The social and community Web sites that are out there are nice experiences, but not the main places where people are looking to make purchase decisions.

If retailers want to take advantage of the social aspects of the Web, they should do so at their own Internet outlets. They should present user-generated content in the form of product reviews on their Web sites. That’s something that is of great value, but it’s most valuable when it’s right on that retailer’s Web site.

eMarketer also reported today on a study that casts doubt on how useful UGC is. The study, the “Marketing Management Survey” by PR Week and Manning, Selvage & Lee, reports that only 12% of marketers surveyed said that UGC (which included word of mouth, online social networks, YouTube and the like) was “very important.” Only 15% of respondents had allocated at least 10% of their budget to new media and UGC – compared to 37.3% who simply didn’t know how much they’d allocated.

The real story
If you look at the full study that eMarketer highlights, there are many important takeaways that actually put UGC and Internet marketing in a positive light. For example, the study also finds that:

  • 43.4% of marketers will use UGC in the next year
  • 42.3% have definitely allocated some portion of their budget to UGC
  • 92.5% would consider turning to an Internet/new media specialist for a “new media campaign,” and 47.7% would turn to them first (that’s more than 2.5 times greater than the next choice, a PR agency).
  • 46.6% think Internet/new media agencies do a very good or excellent job measuring their effectiveness (second only to direct marketing agencies).
  • Between one quarter and one third of marketers attribute their interest in new media to successful results, cost effectiveness (perhaps why they’re not spending most of their budgets on it), the power and visibility of YouTube and Google, increased credibility, and increased importance of consumer-generated media.

I don’t doubt the JupiterResearch finding that online shoppers “do not believe that [social] sites affected their purchase decisions.” However, isn’t that exactly why you should be using social media? Let’s remember how you build a brand:

Successful brands get into the mind slowly. A blurb in a magazine. A mention in a newspaper. A comment from a friend. A display in a retail store. After a slow buildup, people become convinced that they have known about a brand forever. (Laura & Al Ries, via Cindy Krum at SMX)

If consumers felt that their social media experiences were trying to overtly influence their purchases, I think they’d react negatively. Instead, subtle brand interactions build up their opinion of a brand and ultimately influence a purchase without the buyer even realizing it’s the coup d’ tat for marketers.

If you’re not in your buyers’ and potential buyers’ social sites, even you’re not actively “advertising,” you’re not effectively building your brand online. (Not to mention the often negative effects of Evans’s suggestion, user reviews on your site.)

Savvy marketers are already using UGC and social media
There are examples everywhere of effective UGC and social media campaigns. This week, Michael Gray has highlighted Disney and CareerBuilder’s UGC contest (pretty good entries, I gotta say), and Lisa Barone has listed her top three social/UGC campaigns.

So feel free to wait till next year if you’re still leery of the effectiveness of social media. Those of us who are smart enough to get in now have the opportunity to form brand relationships and ultimately influence purchases. Because, as we know, it’s the brand that counts.