Risks and Rewards of Consumer Generated Ads

July 15, 2013

Article by Debora Thompson, associate professor of marketing at Georgetown University's McDonough School of Business. Published in Radio & TV Business Report, July 15, 2013. 

During Super Bowl XLVI, nearly $2 billion wasspent on advertising, according to Kantar Media. While many corporations havetraditionally hired advertising experts, recent trends show corporations replacing agencies with consumers who have a flair for creativity and an affinity for the product.  

Consumer‐generated advertisements have been more desirable given consumer engagement and interaction opportunities with brands. But before marketers make the switch, they should understand the risks and rewards of swapping the ad agency for the creative customer.

 In Consumergenerated Ads: Does Awareness of Advertising CoCreation Help or Hurt Persuasion?, a study published by the American Marketing Association’s Journal of MarketingPrashant Malaviya and I argue that advertisements that are co‐created with consumers should align to the company’s overall growth and business objectives to determine whether or not the strategy will be effective in helping them meet their goals.

Risks

A potential risk identified with consumer generated ads involves consumers’ levels of existing brand loyalty. While these ads may be effective in maintaining loyal customers, consumer‐generated advertisements may not be as effective at securing new customers and providing growth opportunities into new markets for a brand.

Outside of growth strategies, the attribution of the ad to an ordinary consumer may backfire – as consumers are likely to be skeptical of the average consumer’s ability to effectively be persuasive.

This absence of professionalism can lead to further skepticism about the competency of the ad creator, which in turn can make consumers critical of the messaging.

 In addition to brand loyalty and viewer skepticism, marketers should consider external forces, such as the environment in which the co‐created ad is viewed. Research has shown that in a situation where the viewer is distracted, it is likely that his or her ability to critically analyze the ad will decrease.

Conversely, if a viewer is entirely focused on the advertisement, he or she may be more inclined to critique the ad and messaging.

Rewards

By providing background information about the ad creator, user‐generated advertisements can have a much larger impact on the target audience.

In order for co‐created ads to be effective, it is important for the ad creator to be seen as credible to those who are not loyal. By creating and sharing a narrative about the ad creator, viewers can relate and will find the ad more appealing and persuasive.

Providing viewers with background information about the creator identifies similarities and allows the viewer to relate with the creator – increasing the persuasiveness of the ad, which is imperative to the success of a brand. It is more challenging to address external forces at play, and though it is impossible for a marketer to determine every detail of the environment in which their ad will be viewed, it is essential to understand that a co‐created ad may be more successful when viewers cannot closely scrutinize the content and the creator.

Takeaway

The drawbacks of consumer‐generated ads should not prevent marketers from involving consumers and incorporating their creativity into marketing campaigns. What marketers must consider before producing such an ad is an understanding of their target audience and business objectives.

In summary, the findings of the study show that consumer‐ads are not necessarily considered more trustworthy than those created by agencies. As such, co‐created advertising should be viewed as a potential advertising strategy as opposed to a replacement for traditional advertising.