Wednesday, January 12, 2011

Digital:Marketing with user-generated content

Marketers who let a thousand flowers bloom risk losing focus.

NOVEMBER 2007 • Amy Guggenheim Shenkan and Bart Sichel
As the volume and importance of user-generated media grow, marketers—ever on the lookout for effective new ways to influence and even leverage customers—are eagerly experimenting.1 Their efforts, which frequently take place deep in the trenches of business units or brand teams, touch upon a wide range of activities, including advertising, public relations, customer service, and even product development. The result can be exciting initiatives, such as the recent enlistment by Netflix of more than 25,000 global consumer “developers” to improve its movie recommendation algorithm by contributing ideas. The best will win a prize of a million dollars.
In our experience, however, marketers who let a thousand flowers bloom risk losing focus—for instance, by failing to recognize the areas where user-generated media could make the biggest difference or by stumbling into the public-relations problems that intense customer involvement sometimes creates. One way of enhancing focus is to take a top-down approach, starting with drawing a conceptual map that links a company’s brand, industry, and customer characteristics with its core marketing activities that could benefit from user-generated media. While each company’s map will be somewhat different, general principles apply. Companies or brands that have at one time or another been associated with controversial business practices, for example, should develop a deep understanding of what influential online voices are saying about them. Marketers in industries where R&D is a competitive differentiator may need to begin seriously enlisting users in the product-development process. When companies establish high-level priorities, the next step is often to identify the most relevant initiatives, evaluate their potential business impact, and invest more heavily in the most promising ones. 
About the Authors
Amy Guggenheim Shenkan is a consultant in McKinsey’s San Francisco office, and Bart Sichel is a principal in the New York office.
Notes
1 By the term user-generated media, we mean online content created by consumers or Web surfers: blogs, product and service reviews written by users, user-generated videos, applications created by consumers, photo-sharing sites, information sources such as Wikipedia, social and business networks such as MySpace.com and LinkedIn, virtual worlds such as Second Life, and the like. These vehicles account for roughly one-third of all the time spent on the 100 most visited US Web sites, up from roughly 3 percent in 2005.

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