ROI of User Generated Content: Solving the Attribution Dilemma

by Sean Ogino |

ROI of User Generated Content: Solving the Attribution Dilemma

In an era where the trust deficit between brands and customers is at an all-time high, brands are in a dire need of unbiased content about their products. Larger-than-life ads and self-congratulatory product descriptions written by brands are not cutting it, as customers are more aware than ever of the marketing strategy behind them. People want to see real-life applications and read real opinions of the products they’re considering. That’s where user-generated content comes in. Content created and shared by real customers has the potential to make a much bigger impact because it delivers on trust and authenticity. It explains why 51% of US consumers trust user-generated content more than other information on a company website. The value of user generated content is no secret, but marketers are still ailed by one question: How to measure the ROI of user-generated content?

UGC is our bread a butter and our customer success managers are no strangers to the puzzle of UGC ROI. We’ve compiled the metrics they look at and their best practices for how to measure and improve the performance of your user generated content.

A) Conversion Rate:

The authenticity that user-generated content brings makes it excellent social proof- almost akin to a trust badge. This is particularly true for online buyers who cannot touch or feel the products. As UGC remains the sole reference point to the quality of products, it does affect customers’ buying decisions. Note that UGC can improve conversion rates by 6.4% for clothing, 2.4x for jewelry, 1.7x for footwear and 1.6x for products in beauty and consumer electronics verticals. Conversion rate should be considered an important performance metric in measuring ROI of user generated content.

There are ways to measure the impact of UGC. One is to look at the impact that visual commerce and customer reviews have on your conversion rates. For Visual Commerce it is relatively straightforward. All you have to do is tag the products featured in each photo or video and track click-through to your product pages and/or shopping cart. This method also allows you to track average order value associated with visual commerce, by bucketing all traffic through the tagged images and collecting order value data.

For customer reviews, a good rule of thumb for both measuring ROI and ensuring your Ratings and Reviews solution is optimized is to run A/B tests. By testing product pages featuring review content against those that don’t, you can quickly find out if your reviews are responsible for driving conversion. It also gives you an easy way to test layouts and review questions to ensure you’re delivering the best possible content to your customers.

B) Time on Site:

As consumers on average spend 5.4 hours per day with user-generated content, it has immense potential to generate and sustain customer engagement in all brand activities and campaigns. Various studies have found that if implemented properly on websites, UGC can increase the time consumers spend on their site by 90% and boost return visits by 20%. The more time people spend on your website, the more chance there is for them to convert. Time on site, thus, affects the ROI of user-generated content. You can track it by using Google Analytics to compare time on site for pages with galleries featuring user generated content, compared to pages that do not. The same way can be used to track bounce rates.

Read on below for more about ROI of user generated content

C) Reach:

Over 1.8 billion photos are uploaded and shared by consumers daily on social media. As a lot of the user-generated content gets aggregated from these photos, it’s quite obvious that user-generated content commands a tremendous reach. One way to look at the reach of your UGC is to analyze the reach of the customers who post pictures of your products. This kind of reach can be looked at as a brand building opportunity because inspiring pictures of your products are being shared with people who may have never heard of your brand before.

There are also more proactive ways capitalize on the reach and influence of these same customers by utilizing the correct permissions and intelligently ranking your content. Collecting permissions to use your customer’s content across your marketing campaigns means you can get more use out of high quality, low-cost content. Feature your customer’s content in your emails, on social media ads, and even on in-store signage. Finally, utilizing a ranking system to surface better performing content first helps you make sure your content is accomplishing your goals. With Annex Cloud’s proprietary Smart Image Ranking, you can intelligently prioritize content based on a number of factors including, clicks, favorites, reach of the customer, and revenue generated. Reach is a clear indicator of the influence and ROI of your UGC, but the way you look at is important to optimize it.

Key Takeaways:

1) Decide on the parts of the campaign that you would like to monitor. That’s the first step to measure the ROI of user generated content.

2) Always try to quantify majority of the user-generated content campaign or usage and measure them. Conversion rate, time on site, bounce rate, and reach are the elements which can be easily quantified and measured.

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