The Thrifty Marketer’s Guide To Streamlined Budget Spending
Marketing budget cuts have been a common theme throughout the pandemic. In The State of User-Generated Content 2021 report published earlier this year by TINT, 51.5% of surveyed marketers reported a reduction in their marketing budgets. Similar findings were echoed in Deloitte’s 2021 CMO Survey, which also found that marketing spend had dipped to the lowest levels in a decade.
Retail has been particularly hard hit over the past year and a half (Forrester forecast a $2.1 trillion loss in worldwide retail sales in 2020) and even if ecommerce has risen valiantly to the challenge, it was a tall order to expect online sales to offset the gigantic losses made offline.
So here marketers are at a time of job instability and budget squeezes with all eyes on them to be ever-present on forever multiplying marketing and social channels while rescuing declining revenues. No pressure, then.
Cut Straight To The Content That Converts
With less to invest it’s hardly surprising that 52% of marketers are finding it a challenge to keep up with social and visual content production. Perhaps this isn’t so much a challenge, however, as an opportunity for marketers to take a step back from branded content and develop strategies for capturing more user-generated content (UGC) — not only is this more cost effective but it has been shown to positively impact conversion.
- 97 percent of consumers typically read product ratings and reviews before making a purchase.
- Consumers who interact with Ratings & Reviews convert at 108.4 percent the rate of those who don’t.
- 88 percent of shoppers specifically look for photos and videos provided by other consumers before committing to a purchase.
Consumers are actively looking for user-generated photos and videos and ratings and reviews of products to help with their purchase consideration. Providing they find this content they are more likely to convert.
Our own findings on partner platform, YEAY, show that the average user in North America has clicked on a product link from a user-generated recommendation video seen in their feed 2.8 times. This equates to a 4.22% click-through rate, which compares with a click-through rate of just 0.22% on Instagram ads and 1.11% on Facebook ads.
Scale Up UGC
If marketers want to funnel precious budgets into social and visual content that converts, then the smart route is not branded content or advertising, but UGC. The question, of course, is how do you as a brand even enter the UGC space given that this is content created by and for consumers? Once you are there how do you then incentivize and scale UGC without — crucially — having any impact on its authenticity or trustworthiness?
These are the questions and the mission that led us into developing the WOM Protocol. We knew UGC had a unique conversion power thanks to its purity, but we didn’t know how to preserve that purity, while turning UGC into a scalable, measurable digital marketing channel. So we set about working with brilliant minds in blockchain and crypto economics and token engineering to develop an economic incentive model that enables brands to access genuine user-generated recommendations, while providing a way to reward creators for their product-referring content without compromising consumer trust in the content and its creators.
The YEAY app is the first partner platform to implement the WOM Protocol for sourcing user-generated product recommendation videos. Here creators are fairly rewarded for their UGC with WOM Tokens, providing the video passes a peer-review process and based on how much engagement the content generates. The peer-review is conducted through a separate app, the WOM Authenticator, where users are also rewarded with WOM Tokens for rating the UGC. These so-called authenticators rate the content based on factors such as how genuine they believe it to be and whether it truly is a positive endorsement of the product. Both the content creators and the authenticators stake tokens upfront, which they risk losing if they do not behave honestly.
It is this economic incentive model that ensures only quality, genuine and positive UGC product recommendations filter through to the WOM Ecosystem.
This is also how we have built a valuable resource of UGC content for marketers and thanks to the WOM Campaign Manager, which recently launched in MVP, marketers now have direct access to authenticated UGC recommendations to turn into campaigns. You can read our step-by-step guide to setting up campaigns here.
When marketing resources are tight it’s essential to think of thrifty ways to reallocate your budget and focus on the channels and the content that will work hardest for you. No one can convey your brand, advocate for your products, and drive conversion better than your most satisfied customers, so now is the time to invest in incentivizing them to do exactly that.