Social Media Marketing, Second Edition

Strategies in Utilizing Consumer-Generated Content

Emi Moriuchi

• Publisher: Business Expert Press
• Year: 2019
• ISBN:
  9781948976794
• Edition: 2
• Topic: Business
• Subtopic: Consumer Behaviour
• Index: Business

Faced with constant changes in consumer behavior, marketers are seeking various tools to promote and market their brands. Among those tools, the most impactful is consumer-generated content (CGC). CGC is viewed as consumers' vote of confidence, which is a form of social proof. CGC allows consumers to be involved with the companies' marketing strategy. Brands and companies have enabled consumers to be producers of original content, cocreators for an existing brand, and curators for trending ideas in the marketing place.

The author explains why it is even more important today that brands need consumers' voices to advocate their brands. In this lively and practical book, she uses theories to explain consumers' psychology and offers practical examples of which social media platforms are conducive to CGC and why. In addition, she explains how consumers use CGC in different countries, the importance of influencer marketing, and ultimately teaches the strategy of using CGC effectively.

CHAPTER 1

What Is Consumer-Generated Content?

With the introduction of the Internet, individuals have become increasingly dependent on their mobile devices because these devices give them access to the digital world in seconds. Regardless of whether consumers are trying to obtain, accept, or deliver information, or simply just searching for it, they rely on the digital environment as their source for information.

The importance of consumer-generated content (CGC) has increased over that of companies’ self-published content in the online world. This suggests that online information has shifted from publisher-centric to consumer-centric. CGC, as suggested by the name, is driven by consumers. Consumers create or produce (or both) any type of content (e.g., reviews, videos, photos) and share it with the general public. The channel of distribution is primarily the Internet. With innovative means of communication, the potential for a company to reach its mass audience is high. With Web 2.0 technologies, websites are given more support with the creation and consumption of CGC. Some of these CGC platforms include YouTube, Instagram, Facebook, Wikipedia, blogs, and community forums. The advent of Web 2.0 technologies has offered CGC a large opportunity to target its niche market within the media landscape, which attracts “more than $450 million” in advertising revenue (Verna 2007).

In a technologically advanced society, consumers are gaining more control over their decision-making processes and the amount of media exposure that they want to experience. As the conventional media model becomes obsolete, researchers are trying to understand consumers’ motivational factors that drive them to go online to look for information. Severin and Tankard (1992) argued that because of this power shift, media theorists are changing their audience identification processes by focusing on understanding why and how consumers use media rather than the theoretical effects of media on these audiences. This suggests that CGC has a strong impact on the media environment, which indicates the importance of understanding the motivation of consumers and creators behind creating and contributing such media content. As consumers around the world adapt to the use of the Internet, communication channels are gradually increasing, creating a better and smoother flow of communication between consumer-to-consumer (C2C) as well as business-to-consumer (B2C).

By definition, CGC refers to materials that are created and uploaded to any Internet site by nonprofessionals (www.iab.net). This also means that the content is not contributed by an expert, but rather by a consumer who has first-hand experience with a product or service. With the introduction of high-speed Internet and search engines, CGC has become one of the popular forms of content distribution over global media. In fact, it is one of the fastest growing commodities on the Internet. According to a platform status report by Interactive Advertising Bureau (IAB) (2008), in the year 2006, CGC attracted 69 million users in the United States alone. With such a large user population, the revenue of $1 billion in advertising in 2007 proved that CGC will be a dynamic new medium in the near future.

In general, CGC focuses on product reviews and restaurant services especially for airline companies, cell phone services, restaurants, hotels, and resorts. Ye et al. (2011) and others (Hu and Liu 2004) noticed that the amount of CGC contributed online is extensive to a point where some companies pay CGC writers to contribute reviews on their company website or sites that have the company name mentioned (e.g., Yelp!). Some may think that online reviews do not have considerable impact on the sales of a product or the percentage of patronage from a customer. This assumption is definitely incorrect. CGC has proven to be extremely influential, and it has the ability to fold up a business.

From Wikipedia and blogs to Facebook, various types of information is spread across different Web 2.0 outlets. All these outlets are known as CGC and often interchangeably labeled as user-generated content. CGC is a more commercial label that demands more “nuanced, innovative, and exotic methodologies” (Hardey 2011, p. 13). Consumers are constantly retrieving instant information with the click of a button. As consumers gain power over the consumer market, companies are redefining their market reach, frequency, and consumer targeting. Social media has definitely taken a leap in capturing the intended audiences and building brand relationships. It has long overtaken the traditional, product-driven, one-way street in marketing communication. Moreover, the introduction of social media has adopted the approach of new information and consumer-driven objectives.

In the past, CGC platforms were users’ sources to gain information from their peers. In 1980, a platform known as Usenet, a computer network communication system, was established. This was the oldest communication system before the birth of the World Wide Web (WWW). Usenet is fairly similar to the current social media platforms but on a smaller scale. For example, when a user posts an article, it is initially available on his or her news server. This news server will then talk to one or more servers and exchange articles with them. On Usenet, it is normally the sender rather than the receiver who initiates the transfer. These articles were treated as bulletin boards known as “newsgroups.” On these newsgroups, only text was displayed. Unlike the sophisticated platforms in use nowadays with videos and photos, Usenet contained discussions based solely on the text that was shared. Many Usenet users would argue that it was the only genuine “space” people could publicly share information with unclear ownership. One of the best aspects of Usenet was that it was the only platform that “encouraged thoughtful, long-form writing with lots of quotation and back-and-forth” (www.pcmag.com). Social media has evolved over time and what used to be the trend is now outshined by new social media platforms. Figure 1.1 shows the timeline of the various consumer-generated platforms in social media.

Before discussing the motivation behind consumers’ consumption, participation, and production of CGC, we will first define the meaning of “consumer,” “content,” and “e-commerce” in the online marketing context.

Figure 1.1 The timeline of social media

Source: Hayden and Tomal (2012). Permission to use image was sought and attained from CopyBlogger.

Definition of “Consumer”

The term consumer refers primarily to the consumers themselves—anyone other than professional writers, journalists, and publishers. The communication messages posted by CGC consumers are often anonymous (Campbell et al. 2011), whereas word-of-mouth (WOM) communicators are often “known to each other or at least identifiable” (p. 89). Stern (1994) defines WOM as the “utterances that are personally motivated, spontaneous, ephemeral, and informal in structure—and are not paid by sponsors” (p. 89). Nonetheless, there has still been a debate over whether WOM is more reliable than CGC. Skeptics argue that rational consumers doubt the credibility of the anonymous comments on CGC and still value online WOM (Mayzlin 2006). On the one hand, Campbell et al. (2011) argued that though CGC and eWOM have similar traits, communication using these two forms still differs in certain ways. On the other hand, Wang and Rodgers (2010) view eWOM as a type of online advertising that uses CGC platforms. They argue that eWOM is a specific type of CGC that is a critical component of marketing as consumer-generated reviews are regarded as more credible and less biased (Keller 2007).

Lastowka (2007) defined user as a dichotomy between “those who make things and those who use them” (p. 899). When the term CGC is used in the consumer market, a user is often aligned with other possible connotations such as consumers, purchasers, and audiences. Thus, to have a consumer produce CGC, there should be technology. In other words, the term CGC implies that there is an existence of two parties (producers and consumers) and two things (communication tools and content). In the context of this digitalized consumer market, the two parties will be the CGC producers and the CGC consumers and the two possible artifacts will be social media platforms and product reviews.

Generally, consumers comprise the public at large. For many companies, CGC is often described as a benefit to businesses and also as a type of grassroots cultural revolution. In the past, content was generated professionally whereas now consumers are allowed to produce their own content with available communication tools such as social media sites. The contemporary interest in CGC may not be as much in the communication tools but in how those who produce and distribute the content can own and profit from other consumers by using the Internet as a distribution platform.

Web 2.0 has provided amateur content creators an innovative way to produce content at a lower cost along with the ability to connect with others across great distances and to engage in entertaining one another with their words. These possibilities have changed the marketing communication landscape in the consumer market. Skeptics have been critical about the benefits of CGC for society (Campbell et al. 2011; Lastowka 2007). As content is shared among fellow consumers, the information provided may be criticized as amateurish. On the other hand, some may value the information provided by fellow consumers as it appears more honest and reliable compared with those generated by companies. In addition, such CGC may be a step toward improving traditional communication models of information production and distribution.

Definition of “Content”

The word content in CGC is used to describe relevant and valuable information that can be presented to an audience (Lastowka 2007). In the marketing field, more specifically in content marketing, the content that is created and distributed is focused on attracting and retaining a target audience, which ultimately drives profitable customer action (contentmarketinginstitute.com). Generally, this content is the message a company or consumer uses to communicate without selling. For example, if a consumer is planning a vacation, the content is relevant to the consumer’s travel plans such as activities.

With the merging of Web 2.0 and CGC, content often comprises images, videos, or short messages posted on Instagram, YouTube, Facebook, and Twitter. Other content may also include book reviews, which may be posted on Amazon.com, and personal narratives posted on community forums and blogs. In the consumer market, consumer reviews are most significant for experiential products (Ye et al. 2011), especially when the quality of the product is unknown (Klein 1998). Litvin, Goldsmith, and Pan (2008) agreed that hospitality services are considered experiential products and are important sources of information for travelers (Pan, MacLaurin, and Crotts 2007). Furthermore, Gretzel and Yoo (2008) recognized that travelers find reviews provided by fellow travelers more up to date, enjoyable, and reliable compared with those provided by travel agencies.

According to Hayes (2015), CGCs such as photos, videos on social media, product reviews, and questions posted on the company website all play a “valuable role in creating a better shopping experience in today’s digitally-driven environment” (para 1). Furthermore, Hayes (2015) added that the most recognized content in CGC is online product reviews. She argued that this type of content gives consumers the freedom to share their experiences and knowledge of a product. On the other hand, it gives companies an edge as it helps brands better serve their customers.

Content is not only about consumers generating valuable information as a by-product of their activities; content can also be data generated through search engines. Lastowka (2007) argued that consumer activities, such as shopping online, unintentionally generate web-surfing histories (e.g., cookies). Lastowka (2007) claims that this is a form of understanding the fundamentals of CGC. This type of content is highly significant in terms of commercial value (Lastowka 2007, p. 896).

Definition of E-Commerce

CGC generally appears on the Internet through various communication channels. Consumers assimilate information into a web-based commercial information platform known as electronic commerce (e-commerce) (Horrigan 2008). E-commerce activities such as online retailing and customer relationship management (CRM) have been growing fast both domestically and globally and have been very competitive over the past decade (Fang et al. 2014). Transactions on this platform range from personal items to big box items such as furniture. According to the U.S. Census Bureau News (2015), sales generated from the U.S. retail e-commerce sector for the third quarter of 2015 was estimated at $81.1 billion. This is an estimated increase of 2.9 percent from the second quarter of 2015. The number of Americans who have purchased products online has also increased (Smith and Anderson 2016). Furthermore, according to GE Capital Retail Bank’s second 2013 annual report (www.retailingtoday.com), 81 percent of consumers go online to gather information before heading out to the store. In fact, the number of consumers, either researching online or buying a product or service online, has nearly doubled (Horrigan 2008).

As the online retail industry has grown and become globally competitive over the past decade (Fang et al. 2014), online vendors are constantly being challenged with customer retention (Johnson, Sivadas, and Garbarino 2008). In e-commerce, CGC “may serve as a new form of WOM for products/services or their providers” (Ye et al. 2011, p. 635). For example, Duan, Gu, and Whinston (2008) found in their study that the valence of online consumer reviews had no significant impact on the box office’s revenues. However, box office sales were significantly influenced by the volume of online reviews. In the tourism industry, however, Vermeulen and Seegers (2009) revealed that positive online reviews had an impact on the perception of hotels among their potential consumers. Regardless of whether it is the volume or valence of consumer reviews, such CGC has an impact on both the consumers and the retailers (Zhu and Zhang 2006, 2010).

Within the virtual environment, several existing studies discuss influencing factors such as trust (Flanagin et al. 2014; Flavián, Guinalíu, and Gurrea 2006; Qureshi et al. 2009). This influencing factor is deemed a key predictor for customer retention because of its “crucial ability to promote risk-taking behavior in the case of uncertainty, interdependence, and fear of opportunism” (McKnight, Cummings, and Chervany 1998). However, Fang et al. (2014) realized that the impact of trust is not independent from its context. They proposed that investigating how trust operates under various different boundaries could help “specify regulative conditions” under which the effect of trust varies on online purchases (Gefen and Pavlou 2006). Practically, if firms are able to have a complete understanding of trust as a moderating effect on online purchases, they are able to “fine tune their online trust (re) production strategies” (Fang et al. 2014, p. 408).

Although trust is an essential factor for a hypercompetitive e-commerce environment, it is no longer the only triggering factor in customer’s transaction intentions (Liu and Goodhue 2012). Building a trustworthy image is no longer an option; rather, it is a necessity for ongoing operations for companies that have a virtual modality for transactions. Thus, by having a good understanding of trust, online firms are able to allocate their “trust-building resources” (Fang et al. 2014) more cost effectively, thereby optimizing their return on investment by investing in trust production. A further discussion on trust is covered in Chapter 4.

The Changing Landscape of Marketing Communications in Social Media

To meet the demand of a fast-paced lifestyle, the virtual world has changed its “laid-back” setting to a more complex and dynamic landscape comprising of both traditional and interactive media. Many companies that use traditional media, such as television or radio, realize that they are struggling to provide an interactive environment that provides the opportunity to capitalize on this fragmented market. Companies attempt to offer their consumers a unique media channel (e.g., social media) that enables the latter to be heard among the rapid and enormous amount of information and advertisements (Daugherty et al. 2011).

Unlike mainstream traditional media, such as television and radio, many consumers have moved toward an evolutionary change in lifestyle and toward the use of social media. With the abundance of “space” in the virtu...