Consumer Generated Media - Fad Or Future

 

Consumer‐ Generated  Media 

Fad or  Future? 

2007 BA(Hons) Dissertation, London College of Communication  University of the Arts London, United Kingdom 

Jolene Chen 

Consumer-Generated Media: Fad or Future?

ACKNOWLEDGEMENTS 

I would like to acknowledge various people for helping me during the course of this dissertation. I would especially like to thank my supervisor, Kulbir Basra, for her generous time and commitment. This paper would not have been possible without her guidance and invaluable advice.

I am grateful to Mark Pickles and Paul Maxfield (London College of Communication) for generously sharing their time, knowledge and for providing helpful suggestions and comments.

I would also like to thank Kevin Roberts, CEO Worldwide of Saatchi & Saatchi, Deborah

Zdobinski,

Senior

Vice

President

&

Executive

Director

Corporate

Communications of Publicis USA, Andre Nair, CEO of GroupM South-East Asia & South Asia, Achara Masoodi of MindShare Asia Pacific, Baxter Jolly, Managing Director and Marie Loh, Account Supervisor of Weber Shandwick Singapore for their time, support and valuable insights.

I extend many thanks to James Chadwick, Director Insights MindShare Asia Pacific. Heartfelt thanks to Robin Wong and Hazlin Abu (MindShare Regional, Singapore) for their support and encouragement.

Finally, I’d like to thank my family for their unconditional love and constant support, and for helping me maintain my life in proper perspective and balance.

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Consumer-Generated Media: Fad or Future?

ABSTRACT 

Consumer-Generated Media is a rapidly growing online phenomenon that is giving consumers the power to both generate and consume their own media content. It is driven by recent technological advances in the online world, and challenges the traditional offline media landscape in many ways. The primary purpose of this paper is to find out if this new phenomenon of Consumer-Generated Media is simply a temporary fad that will disappear over time, or if it is a sustainable part of the future world of marketing.

A structured consumer survey and open-ended executive interviews were used to explore people’s attitudes towards online communities, investigate the effect of online advertising on consumers in the context of Consumer-Generated Media and assess the effectiveness of Consumer-Generated Media as a marketing tool. They were also used to find out whether Consumer-Generated Media is likely to be a fad or the future, and determine the impact Consumer-Generated Media has on the existing media agencies.

The results show that the majority of consumers use Consumer-Generated Media for reasons of entertainment and keeping up with the news. It is also shown that consumers use this new form of media in widely varying quantities, and that only one quarter of Consumer-Generated Media users are responsible for creating the entire spectrum of content. This paper also finds that traditional online advertising has a predominantly negative effect on consumer participation in online communities, and proposes a new way of marketing to Consumer-Generated Media users. Additionally, the results suggest that Consumer-Generated Media is a highly effective marketing tool, especially in the domains of entertainment and news coverage, and will most likely be part of the future world of marketing. Finally, it is concluded that the existing media industry will have to change and adapt, giving up some of its power and control to consumers, in order to cope with this new phenomenon of ConsumerGenerated Media and survive in the long-term.

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TABLE OF CONTENTS 

Acknowledgements

1

Abstract

2

I. Introduction

7

II. Literature Review

8

1. Consumer-Generated Media (CGM)

8

1.1 News/ Information/ Opinion Sites

9

1.2 Subject/ Issue Sites

11

2. Marketing Tools

11

2.1 CGM as a Marketing Tool

12

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2.2 CGM as an Effective Marketing Tool

12

3. Democratization of Media

16

3.1 Power-Shifting

17

4. Critical Success Factors for Sustainability of CGM

18

4.1 Rate of Adoption

20

4.2 Major Opportunities and Threats associated with CGM

22

4.2.1 Strengths and Opportunities of CGM

23

4.2.2 Threats and Weaknesses of CGM

23

III. Research Methodology

24

1. Research Philosophy

24

1.1 Research Approaches

25

1.2 Research Strategy

26

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1.3 Data Collection Methods

28

1.4 Credibility of Research Findings

29

IV. Results & Findings

30

1. Quantitative Findings: Consumer Survey Results

31

2. Qualitative Findings: Executive Interviews

39

V. Analysis

42

1. Consumer Profiles

42

2. Consumer Attitudes

43

2.1 Consumer Behaviour on CGM Sites

43

2.2 Consumer Behaviour on Social Network Sites

44

2.3 Consumer Behaviour on Review Sites

45

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3. Effects of Online Advertising

46

4. Effectiveness of CGM as a Marketing Tool

47

5. CGM’s Future Impact on the Existing Industry

47

6. CGM – Fad or Future?

48

VI. Conclusion

49

VII. Evaluation and Future Research

51

VIII. References

53

IX. Bibliography

56

X. Appendix

61

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I. INTRODUCTION 

“Each time technology advances, the world’s behaviour changes accordingly. Over recent years there has been a significant attitude shift in the relationship between businesses and their customers.” (Nutley, 2006)

A new media age is rapidly developing and it revolves less around businesses but more around consumer communications, by which customers are taking control of what kind of new media is developed and which type will succeed (Blackshaw & Nazzaro, 2004). It is a new media development that rides on the back of the Internet, giving consumers the power to both generate and consume their own media. Hence, it has been coined ‘Consumer-Generated Media’. The development of this new media format challenges the traditional media landscape in many ways, and over the past few years has forced a dramatic restructuring of many traditional business models in the media and advertising industry.

The primary purpose of this paper is to find out if this new phenomenon of ConsumerGenerated Media is simply a temporary fad that will disappear over time, or if it is a sustainable part of the future world of marketing. The interest for this exploratory study was sparked off by the increase in the recent mergers and acquisitions activity and growing news coverage in the Consumer-Generated Media sector, most notably Google’s acquisition of YouTube on October 09, 2006. The question then arose on whether this was an overrated and inflated market that was being hyped in a similar fashion to the dot-com era of the 1990’s, or whether these were justified investments in a sustainable emerging industry with a long-lasting future.

Hence the objectives for this research project were to explore people’s attitudes towards online communities, investigate the effect of online advertising on consumers in the context of Consumer-Generated Media and assess the effectiveness of Consumer-Generated Media as a marketing tool. This paper also seeks to find out whether Consumer-Generated Media is likely to be a fad or the future, and determine the impact Consumer-Generated Media has on the existing media agencies.   Page 7

Consumer-Generated Media: Fad or Future?

To successfully achieve these objectives this paper will comprise a literature review, a research methodology, relevant primary research, a research analysis, a conclusion, an evaluation and suggested future research.

II. LITERATURE REVIEW

1. CONSUMER‐GENERATED MEDIA (CGM) 

The term "Consumer-Generated Media", or CGM, was first coined by Pete Blackshaw (2002), Chief Marketing Officer of Intelliseek, an Internet-based consumer feedback provider. CGM is an amalgamation of two fundamental types of marketing, word-ofmouth marketing and Internet marketing. Word-of-mouth marketing has existed for many centuries and relies on the fact that good quality products or services are promoted through consumers recommending it to each other. Such invisible networks of consumers have always been important in the diffusion of information about products and services, but the only way such networks could communicate was through, as the term word-of-mouth suggests, oral communication. As Kotler (2005) argues, this is where the Internet comes in as a transforming catalyst. Invented in the 1960’s, the Internet – which started out as a way to remotely access large research computers – has woven itself into people’s daily lives (Eisenberg, 2004), and has revolutionised the way networks of people are able to communicate with each other. Through highly connected, borderless networks of users, the term word-ofmouth has evolved and has taken a new, much more powerful meaning and has consequently transformed the way many industries go about their business. Mulgan (1997) illustrates this nicely by stating: “The world may never have been freer, but it has also never been so interdependent and interconnected.” As defined by Blackshaw & Nazzaro (2004), the term CGM refers to the way these virtual networks of consumers communicate with each other through online word-of-mouth vehicles, including, but not limited to: consumer-to-consumer email, postings on public Internet discussion boards and forums, consumer ratings websites/ review sites, blogs (short for weblogs, or digital diaries), moblogs (sites where users post digital images/photos/movies), vlogs (short for video blogs), social networking web sites and

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individual web sites. The evolution of these CGM vehicles over the life of the Internet is illustrated in Figure 1 below.

 

FIGURE 1 – THE EVOLUTION OF CGM VEHICLES (SOURCE: BLACKSHAW & NAZZARO 2004) 

According to Jeffery Feldman, Manager of Consulting and Strategic Service for Cymfony,

CGM

sites

fall

into

two

categories:

News/Information/Opinion

and

Subject/Issue. Significant overlap exists, but for illustrative purposes, two high-level categories will suffice (Feldman, 2005).

1.1 NEWS/INFORMATION/OPINION SITES 

News/Information/Opinion sites (also known as meta-sites - which gather links and stories together from other sites) tend to be either collaborative pages that post links from other websites to a forum, often including a running commentary/opinion   Page 9

Consumer-Generated Media: Fad or Future?

component, or a sole author’s page that posts links from other websites and contains his or her own opinions (Feldman, 2005). Feldman states that as a general rule, such sites tend to be weblogs. While some news sites do create original articles, the majority tend not to generate many stories, but rather rely upon commentary about stories from other sources. As with traditional media, this pattern tends to create something of an echo-chamber effect, with a post or link rapidly spreading among sites. However, these sites should not be thought of as simply hyping stories from traditional media. While the content might not be original, many sites source stories or links from each other, enabling a post on a smaller or obscure site to rapidly become an active and visible issue (Feldman, 2005). One of the leading collaborative concepts online today is the so-called folksonomy. Bhuiyan (2006) describes folksonomy as a collaboratively generated, open ended labeling system that enables Internet users to categorise content such as Web pages, online photographs, and Web links. The freely chosen labels, called tags, help to improve search engine’s effectiveness because content is categorised using a familiar, accessible, and shared vocabulary. The labelling process is called tagging, and the saving process of links is called bookmarking. Two widely cited examples of websites using folksonomic tagging are Flickr and del.icio.us (Bhuiyan, 2006).

Bhuiyan (2006) goes on to state that because folksonomies develop in Internetmediated social environments, users can discover (generally) who created a given folksonomy bookmark, and see the other bookmarks that this person created. In this way, folksonomy users often discover the tag sets of another user who tends to interpret and tag content in a way that makes sense to them. The result, often, is an immediate and rewarding gain in the user’s capacity to find related content. Part of the appeal of folksonomy is its inherent subversiveness: faced with the dreadful performance of the search tools that Web sites typically provide, folksonomies can be seen as rejection of the search engine status quo in favour of tools that are both created by the community and beneficial to the community (Bhuiyan, 2006).

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1.2 SUBJECT/ISSUE SITES 

Subject/Issue sites tend to focus on products, product categories or issues. The users of these sites have a propensity to be passionate about a given topic, and want to express their opinions. These sites tend to have long running discussions, and are often where consumers turn when they’re seeking advice or information. As a general rule, these sites tend to be message boards or Usenet groups (Feldman, 2005).

2. MARKETING TOOLS 

According to the American Marketing Association (AMA 1985), marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create and exchange value, and satisfy individual and organisational objectives. To make this process as successful as possible a marketer has a large selection of so-called marketing tools such as branding, pricing or public relations to his or her disposal. Traditionally, all marketing tools are divided into four categories, called the 4 P’s of the marketing mix (De Pelsmacker et al., 2001), as is shown in the table below.

1. Product

2. Price

3. Place

4. Promotion

Benefits Features Options Quality Design Branding Packaging Services Warranties

List Price Discounts Credit terms Payment periods Incentives

Channels Logistics Inventory Transport Assortments Locations

Advertising Public relations Sponsorship Sales promotions Direct marketing Point-of-purchase Exhibitions Personal selling Interactive marketing

FIGURE 2 – TOOLS AND INSTRUMENTS OF THE MARKETING MIX (DE PELSMACKER ET AL. 2001) 

   

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2.1 CGM AS A MARKETING TOOL 

CGM mainly falls into the fourth category of the marketing mix, namely Promotion, since, as a marketing tool, it can be seen as a form of ‘interactive marketing’. Interactive marketing uses new media such as the Internet and offers new ways to communicate with stakeholders, enabling marketers to advertise ideas, products or services by means of mass communications. CGM uses the Internet to create a medium that enables fast, two-way communication with highly involved consumers and opens up opportunities to identify target groups to deliver customised information and track communications. As De Pelsmacker et al. (2001) states, the Internet provides access to an ever-growing pool of users, typically higher educated and coming from the middle and upper class, and it gives marketers an easy access to a truly global marketplace that never sleeps.

2.2 CGM AS AN EFFECTIVE MARKETING TOOL

When looking at marketing tools in general, the effectiveness and usability of a particular tool by and large determines its acceptance within the industry and its future success. Hence it is crucial to explore CGM in the light of its effectiveness as a marketing tool in greater detail.

CGM has grown to become a highly valuable marketing tool. It owes its growing popularity and effectiveness to four key features:

Firstly, Blackshaw (2005) argues that CGM is highly customisable and it may exist in various forms and types, for example text, audio, images, video or any combination of these. This makes CGM extremely versatile and flexible when it comes to implementing it to get a particular message across to consumers. There exist no limits or boundaries to the range of applications of CGM in today’s world of marketing. As De Pelsmacker et al. (2001) states, consumers choose the areas that interest them and look more deeply into the different sections within these areas. This creates a situation in which marketers can serve highly customised messages to crowds of

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consumers who are actually interested in the message, thereby dramatically increasing the response rate.

Secondly, Blackshaw (2005) states that CGM leaves a very detailed and measurable digital trail, allowing advertisers to gauge brand equity, reputation, and message effectiveness in real time. Since CGM creates a situation in which consumers of media are also generators of media, measurability of both consumption and generation of certain types of media is invaluable and an important reason why CGM is such a strong marketing tool.

Thirdly, CGM represents a free market of information, driven by natural laws of supply and demand. Although influenced or stimulated by traditional marketers and marketing activities, CGM is essentially media created by the masses for the masses, and hence always represents what the market wants to consume at any given point in time. A deficit in supply is always counter-balanced with a surge in supply due to unfulfilled demand, just as an over-supply is always counter-balanced with a drop in supply due to an over-satisfaction of demand. This makes CGM a much more trustworthy

source

of

information

than

traditional

media

channels.

The

consumers/generators express directly through CGM what they think and feel at any given point in time, and therefore have more credibility and higher relevancy than a traditional media channel proclaiming they know the people better than they know themselves. According to a 2004 study conducted by Forrester/Intelliseek Research (Blackshaw & Nazzaro, 2004), CGM consistently outranks other advertisement vehicles on the ‘trust’ factor, as shown in Figure 3 below.

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  FIGURE 3 – CGM IS THE MOST TRUSTED FORM OF ADVERTISING (BLACKSHAW & NAZZARO 2004) 

Another reason for the effectiveness of CGM as a marketing tool is the ability of companies to easily find out what consumers feel about their products and services. Information such as reasons for purchase, problems with goods and services, ideas for new products or improvements or response to broad marketing campaigns can all be filtered out in an efficient way thanks to CGM.

Finally, CGM is also a highly effective marketing tool due to its word-of-mouth character, allowing for a message to be widely exposed through minimal activity, effort and cost. As word-of-mouth platforms grow and traditional tools lose impact, the measurable propensity of a customer base to recommend products and services to others will be regarded as the single-largest measure of brand equity (Blackshaw & Nazzaro, 2004). To use this to their advantage, marketers employ a marketing strategy that focuses on stimulating the creation of CGM. This process of stimulating consumers to recommend products and services to each other through the use of CGM is illustrated as a chain-reaction among participants in Figure 4 below.

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Consumer-Generated Media: Fad or Future?

 

FIGURE 4 – CHAIN REACTION FOR STIMULATING THE CREATION OF CGM AMONG USERS 

An arbitrary company, depicted in the diagram as a red and yellow building in the top left corner, that is trying to spread a message through an interactive community, may stimulate the creation of CGM through highly creative, innovative, and interactive advertising. This may kick off a chain reaction within the community that spreads rapidly among content generators and consumers. It is important to note that the more engaging, creative and fun the initial message is, the more likely this chain reaction will occur. The content generators have to be sufficiently impressed by the initial message to feel the need to spread this message to fellow consumers. If this is not the case, the marketer’s message can hit a wall very quickly and never penetrate the full depth of the interactive community. However, if successful, this technique of stimulating CGM enables marketers to achieve a very high exposure in the market by simply letting consumers do the work for them, and not having to pay a premium for placing a message within a highly popular environment with naturally high exposure to the market. This approach of stimulating the creation of CGM to spread a message across an online community is much more subtle and indirect than traditional marketing approaches, and as argued earlier on, achieves a higher level of trust in

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the message among consumers, since the visibility of the original source of the message diminishes with time and distance.

As we can see, CGM emerges as a truly remarkable marketing tool. In its broad form, and thanks to its highly flexible character, it may be applied to a diverse mix of marketing scenarios and may fulfil many different objectives. The above described factors of effectiveness for CGM represent the most common reasons for why various companies have already started to use it as a marketing tool over the last few years. But additionally to that, as the Internet progresses, many more opportunities will open up and many more benefits of CGM as a marketing tool will become apparent.

However, one does not need to look into the future to recognise that there is already a general trend throughout the theme of CGM. Donaton (2004) observes that as consumers are gaining more and more control over what other consumers are exposed to, the traditional media outlets are losing their share of that control. Fowles (1996) adds to this by stating that the media [is] no longer controlled by media executives and monopolies but [is] “completely subject to the fickleness, the choices, and in the final analysis, the control of the audience” (Fowles, 1996; Leiss et al., 2005). This development may be described as the democratisation of media through CGM, which results in a power-shift away from companies and towards the consumers.

3. DEMOCRATISATION OF MEDIA 

Traditionally the news media have been playing the role of final arbiters of what information should receive the attention of the public, and when it should do so. According to Gloria Pan (2006), writer at MediaCenterBlog.org, the traditional media outlets have been able to do so because there have not been any means to challenge them - no easy and timely mechanism for others to call them on mistakes, no channels through which alternative interpretations of events or information could be offered. Over the past few years, however, the introduction of CGM has changed this picture in a dramatic way. It has provided anyone and everyone on the Internet with   Page 16

Consumer-Generated Media: Fad or Future?

individual channels through which alternative news can be published, and has also provided them with communication features that allow others to rate the quality of the published information. Discussion lists, blogs and citizen journalism have effectively

illuminated

the

traditional

news-gathering

and

reporting

process,

uncovering errors, misjudgements, misinterpretations and questionable claims of accuracy. Instead of a few elite media specialists deciding on today’s news, the diffusion of information is more and more being influenced by the democratic vote of the Internet masses. Van Dijk (2006) comments that “the fact that the new media enables well-informed citizens, employees and consumers to have more direct communication with, and participation in, institutions of decision-making should, in principle, strengthen democracy.” This result of a much more democratic process of information and news delivery has also created a significant power-shift within the media industry.

3.1 POWER‐SHIFTING  

Over the past few years, one of the biggest effects of CGM has been that consumers are becoming more powerful while traditional, established media channels have been losing their long-held influence and clout in the market. This constitutes a significant power-shift within the industry, which inevitably leads to the need to rethink and reshape many business models and processes across the globe. One way through which this power-shift is occurring, as stated by McKenna (1991), is the fact that “technology is transforming choice and choice is transforming the market place”. Using various types of advanced intelligent technologies, today’s customers have more channels to source companies and as a result have a larger choice in selection. This increased choice on the hands of the consumers creates a shift of power or influence away from the traditional holders, i.e. the established media companies, and towards the consumers. This notion of shifting influence is also touched upon by Prabhaker (2001), who states “the customer knows that modern technologies are leading to a situation where he’s right and in charge” and companies have less and less control over what he chooses. Another reason for such a power shift is the ability of customers to share their opinions and comments with others using modern technology. Hence, each particular customer has his own linkages with a number of other customers and suppliers in the market-space which form the basis of the new-

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found customer power over companies (Law et al., 2003). In a study by the American Marketing Association (AMA) (Costopulos, 2006) published in December 2006 the authors describe a growing trend of large companies handing control of their brands over to their consumers. The study states that “the increase in resistance to all forms of marketing has led many organizations to rethink their strategies and focus more on involving the customer in the marketing process to build a sense of collaboration and reciprocity” (Costopulos, 2006). With the introduction of CGM, the opportunity for companies to harness the unlimited creativity of the customer base has opened up an entirely new channel for marketers for which a sacrifice in control and power of the brand is necessary. This sacrifice, however, is not always easy to make and according to AMA’s study there is still “hesitancy for organizations to give up this control as companies have spent millions to build brand relevancy. However, giving consumers more interaction with the brand has a direct effect on a company’s overall perception in the marketplace. Young adults’ scepticism may be rooted in their desire to distance themselves from company-sponsored messages. Organizations need to find a way to give this audience even more control and autonomy in the process” (Costopulos 2006).

4. CRITICAL SUCCESS FACTORS FOR SUSTAINABILITY OF CGM 

There are many different factors that determine the success of a new technological innovation such as CGM. According to the Socio-Technical Model developed by Cherns (1976), the implementation and ultimately the success of a new technology is determined by both technical factors of the innovation itself and social factors within the adopting community. The model describes technical factors such as compatibility, complexity, divisibility and communicability, and social factors such as protection, personalisation, health, intelligence and many more as shown in Figure 5 below.

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FIGURE 5 ‐ TECHNICAL AND SOCIAL FACTORS INFLUENCING THE SUCCESS OF A TECHNOLOGICAL  INNOVATION 

The model stresses that neither the technical nor the social factors by themselves determine the spread of a new innovation, but that these two domains constantly influence each other, following a much more complex, fluid and less traceable path towards ultimate success or failure. As society changes, it affects the properties and features of the technology to be adopted, and as this technology changes it automatically re-shapes society. One of the consequences of this model is that predicting whether a new innovation will be a fad or future becomes very difficult, because it requires taking into account all the possible permutations that the relationship between technology and society could possibly assume. Nevertheless, according to research conducted by Rogers (1986; 1995) there is one factor that seems to be a fairly good indicator of how successful a new technology will be in the future. This factor is the so-called ‘Rate of Adoption’.

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4.1 RATE OF ADOPTION  

A fairly reliable factor affecting the possible success of a new technology such as CGM is the ‘Rate of Adoption’. In all societies, people differ greatly in their openness to new things, and hence also differ in their readiness to try new products and services. According to Rogers (1995) people can be broadly classified into five categories or groups of adopters, as shown in Figure 6 below.

FIGURE 6 – ADOPTION RATE OF INNOVATIONS (SOURCE: ROGERS 2005) 

A small fraction of people, roughly 2.5%, fall into the ‘Innovator’ group. They are venturesome by nature, try new ideas and do not fear risk or failure – they are entrepreneurs. ‘Early Adopters’, making up roughly 13.5% of people, are guided by respect – they are opinion leaders in their community or industry and carefully adopt new ideas early on. They are by no means risk-averse, but are slightly more careful or conservative than the ‘Innovator’ group. The ‘early majority’ group, representing roughly 34% of people, comprises few opinion leaders but is not afraid of adopting new ideas quicker than the average person, while the ‘late majority’ group, also representing 34% of people, are generally sceptical towards new things and will not try new things before others in society have tested them beforehand. Together the   Page 20

Consumer-Generated Media: Fad or Future?

‘early majority’ and ‘late majority’ groups make up the bulk of people, representing 68% of the entire population. Finally roughly 16% of people are so-called ‘laggards’. They are traditional, very risk-averse and always the last group to try new things – they will only adopt a new innovation only after it has become somewhat of a tradition itself. In this model, a general trend of increasing age can be observed, as young people are willing to take higher risks and tend to be more open towards change than older people.

The progress along the time-line of adoption shown above in Figure 6 is an indicator for the future success of a new technology and it is affected not only by society itself, but also by the features of the technology that is to be adopted. According to research done by Pew Internet & American Life Project (2006) approximately 42.0% of American Internet users have made use of CGM. Therefore in America, the trendsetting market, this technology has been adopted by all innovators, all early adopters and by a large section (76.5%) of the early majority. Even when taking into account that the published number of 42.0% has an error margin of approximately 2.4%, it is hard to argue against the fact that CGM is well on its way to becoming a main-stream technology.

As described within the context of the Socio-Technical model, compatibility, complexity, divisibility and communicability all affect the speed at which a new technology is adopted by people. The more compatible, the less complex, the higher divisible and the more communicable a technology is, the faster the rate of adoption and the more likely the success will be.

CGM itself is highly compatible, since it fits the values and lifestyles of its potential consumers and content generators. It is also highly divisible, since it is easy to test or try on a limited basis without major financial commitments. For example, consumers can use and generate CGM for free, and marketers can run limited test campaigns of any desirable size to test the effectiveness of CGM as a marketing tool. CGM is also a highly communicable technology, since it is easy to understand, easily demonstrated and spread through interactive communities that have the natural desire to consumer and generate media. Finally, it is a fairly complex technology, since it requires certain

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knowledge and technological skills to generate content. However, as time progresses, complexity decreases and adaptability of consumers increases, thereby lowering the overall complexity of the technology. Overall, CGM can therefore be classified as a highly

compatible,

fairly

complex,

highly

divisible

and

highly

communicable

technology. This means that the adoption rate of CGM is likely to be rather high, and because of this will most likely be successfully implemented over time.

4.2 MAJOR OPPORTUNITIES AND THREATS ASSOCIATED WITH CGM 

Another approach to determining the possible success of a newly introduced technology such as CGM is to perform a rigorous SWOT analysis. In the case of CGM, the rapid emergence and the substantial growth of influence pose considerable challenges and opportunities for marketers and advertisers alike. A summary of these can be seen in form of a SWOT analysis in Figure 7.

 

FIGURE 7 – SWOT ANALYSIS OF CONSUMER‐GENERATED MEDIA 

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4.2.1 STRENGTHS AND OPPORTUNITIES OF CGM 

One of the already mentioned strengths of CGM is the fact that it leaves a highly measurable digital trail, allowing advertisers to gauge brand equity, reputation, and message effectiveness in real time (Blackshaw, 2005). Also, as outlined above, CGM carries a higher credibility and trust than traditional media because it is created amongst a group of individual consumers and not organisations. Finally, CGM has a much higher cost-benefit ratio as compared to traditional marketing activities on the Internet. This relates back to the point made earlier about stimulating the creation of CGM, which turns out to be much more cost effective than the traditional approach of targeting

high-traffic,

popular

web

content

for

advertising

campaigns.

The

opportunities related to CGM are a rapidly growing market with an equally rapid progress in both technical development and social influence. Also, CGM opens up a window of opportunity for organisations to effectively target Generation Y within a domain that this generation feels comfortable in and is less suspicious of.

4.2.2 THREATS AND WEAKNESSES OF CGM 

The major weaknesses of CGM are focused around the fact that control of CGM is spread

out

amongst

consumers

and

that

the

power

is

shifted

away

from

organisations. Because of this it is very difficult, if not impossible, to control both content and quality of information reaching the masses, which may result in falsified information, stolen intellectual property, political manipulation and many more issues. Some of the threats to CGM are the possibility of it being financially unviable to many service providers, people losing interest and the rise of the next web-generation that might give back control and power to large organisations. The latter point refers to the possibility that the current state of the consumer-controlled Internet might simply be a transitional phase between the first era of corporate media and a new era of corporate media.

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III. RESEARCH METHODOLOGY 

The preceding section presented the background of this study and synthesised the findings of relevant literature related to CGM and the question whether it is simply a fad or the future of media.

In this section the research methodology for this dissertation is outlined and broken down into six parts: Research Philosophy, Research Approaches, Research Strategy, Time Horizons, Data Collection Methods and Validity.

1. RESEARCH PHILOSOPHY 

There are generally two very different philosophies one may adhere to when researching into a subject area. Firstly, there is the positivist philosophy, and secondly, there is the interpretivist philosophy. These two ways of approaching research are inherently opposites of each other and embody radically different assumptions and paradigms.

Positivism adopts the philosophical stance of the natural scientist, placing emphasis on natural observables which can be measured reliably and can be recorded as results or facts. According to Remenyi et al. (1998) the end products of positivist research are law-like generalisations similar to those produced by the physical and natural scientists. As structural anthropologist Edmund Leach (1968) describes it, positivism is the view that serious scientific inquiry should not search for ultimate causes deriving from some outside source but that it must confine itself to the study of relations existing between facts which are directly accessible to observation. The positivist approach requires objective, value-free, non-biased researchers that conduct research which has high reliability, repeatability and verifiability. It is dominant in the natural sciences, but is also used within the realm of social research.

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Interpretivism adopts the philosophical stance of the social scientist, placing emphasis on the importance of context, subjectivity and meaning. Foxall (1995) describes Interpretivism as the opposite of scientific explanation, since as stated by A.S. Lee (1991) it is subjective, idiographic, qualitative, insider-based and emic. It is based upon the fact that multiple versions of social reality exist within a community, and that these versions of social reality are fundamentally different and more complex than the reality of the natural world. The interpretivist approach takes into account that no general laws exist within the social domain, and that behaviours and attitudes of people change with both space and time.

For this dissertation, both the positivist and the interpretivist philosophies will guide the research process from research design through to data collection and analysis. The interpretivist approach was chosen because CGM is a social networking phenomenon that contains both human and technological elements, bound to neither space nor time. The human element is difficult, if not impossible, to capture with the singular use of definitive laws of nature as positivism would require it, and hence the interpretivist approach is a much more adept tool to study social behaviour and development such as CGM. Nevertheless, the positivist approach is also used for some aspects of this research, particularly the quantitative elements.

1.1 RESEARCH APPROACHES 

There are commonly two choices of approaching both interpretivist and positivist research. One may choose to do either a quantitative study or a qualitative study. Neuman (2006) states that while quantitative methods are based on the natural sciences and the positivist model of testing theories, qualitative methods are based on interpretivism and are more focused around generating theories and accounts.

Krauss (2005) states that for many qualitative researchers, the best way to understand what is going on is to become immersed in it and to move into the culture or organization being studied and experience what it is like to be a part of it. He goes on to say that rather than approaching measurement with the idea of constructing a   Page 25

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fixed instrument or set of questions, qualitative researchers choose to allow the questions to emerge and change as one becomes familiar with the study content. Authors Burrell and Morgan (1979) illustrates this point nicely by stating that qualitative data, which is heavily dependent on an anti-positivist approach, where ‘…The social world is essentially relativistic and can only be understood from the point of view of the individuals who are directly involved in the activities which are to be studies’.

For this dissertation, the choice of an integrative mixture of both qualitative and quantitative techniques is used, however due to the interpretivist nature of this study, the focus of the study remains on the qualitative elements rather than the quantitative ones. While the quantitative elements are important to the findings of this project, their main purpose is to provide help to contextualise the qualitative side.

1.2 RESEARCH STRATEGY 

This research project encompasses five main objectives:

1. Explore people’s attitudes and find out why and how often they participate in online communities 2. Investigate the effect of online advertising on consumers in the context of CGM 3. Assess the effectiveness of CGM as a marketing tool 4. Find out whether CGM is likely to be a fad or the future 5. Determine the impact CGM has on the existing advertising agencies

These objectives were devised to answer or fill some of the gaps within the literature review. For example, not much is known about the effectiveness of CGM as a   Page 26

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marketing tool, and there only exists speculation as to whether CGM will vanish soon or whether it is here to stay.

For objectives 1 to 3 an exploratory approach focusing on the consumers themselves is used, while for objectives 4 and 5 an in-depth interviewing approach focusing on industry experts and opinion leaders is utilised. The main reason for this separation into two segments, distinguishing between consumers and industry experts, is the belief that objectives 1 to 3 are best achieved by questioning individuals at the source of CGM, i.e. the users themselves, while objectives 4 and 5 are best achieved by questioning individuals who have significant experience and credible foresight within the media industry and are able to see the bigger picture.

The exploratory approach used for objectives 1 to 3 is described by Robson (2002) as a valuable means of finding out ‘what is happening; to seek insights; to ask questions and to assess phenomena in a new light”. This exploratory approach adopts the single cross-sectional quantitative design using an online survey method. Cross-sectional studies often employ the survey strategy (Easterby-Smith et al., 2002; Robson, 2002). According to Saunders et al. (2007), there are three principal ways of conducting such exploratory research:

1. A search of the literature 2. Interviewing ‘experts’ in the subject; 3. Conducting focus group interviews

As part of the strategy for this research study, a literature review and expert interviews were used in line with this model, but instead of using focus groups this project made use of an exploratory online survey.

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1.3 DATA COLLECTION METHODS 

The quantitative research was conducted via a structured online survey (Appendix A) and generated over 70 responses. Invitations to respond to this online survey were posted on several electronic lists within two London Universities, one international discussion forum, and they were also distributed via e-mail to friends and relatives of the author. The target audience of the survey was mainly young Internet users between the ages of 16 and 35, living in America, Europe and Asia. These criteria were chosen due to the belief that these geographic areas are currently the main drivers of new developments on the Internet, and that Internet users between the ages of 16 and 35 will be responsible for shaping the near future.

In the survey, question 1 was formulated to determine the gender of respondents, while question 2 was created to determine the relative prominence of the Internet among other hobbies and pastimes of users. Particularly the comparison between the Internet and the TV as pastimes could reveal some interesting trends. Questions 3 to 14 were devised to find out more about consumers and their behaviours regarding CGM, Social Networking and Review sites, since the literature on this topic has very little information and fails to capture consumer behaviour within this new media landscape. Finally, questions 15 to 18 were formulated to determine consumers’ attitudes towards online advertising, since this would provide insights into how marketers can most effectively target their campaigns within CGM communities.

The second stage of the research process involved qualitative, in-depth interviews of opinion leaders in the field and industry experts. Such in-depth interviews were conducted via e-mail as face-to-face interviews would have been impractical, costly and time-consuming because respondents were geographically widely dispersed. As part of this stage the following people were interviewed:

1. Kevin Roberts, CEO Worldwide, Saatchi & Saatchi 2. Deborah Zdobinski, Senior Vice President, Publicis USA

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3. Andre Nair, CEO, GroupM South East Asia 4. Achara Masoodi, Insights Scout, MindShare Asia Pacific 5. Baxter Jolly, Managing Director, Weber Shandwick Singapore

1.4 CREDIBILITY OF RESEARCH FINDINGS 

In order to assess the credibility of the research findings in this study one needs to evaluate two related issues: reliability and validity.

Reliability refers to the extent to which data collection techniques or analysis procedures will yield consistent findings. It can be assessed by posing the following three questions:

1. Will the measures yield the same results on other occasions? 2. Will similar observations be reached by other observers? 3. Is there transparency in how sense was made from the raw data?

(Easterby-Smith et al., 2002)

According to these criteria, this research project is fairly reliable within the context that it was conducted in. However, since cultural and societal phenomena change over time, repeat studies on other occasions might yield different results to the ones measured in this study. The greater the temporal distance between two societal studies is, the more likely it becomes to find discrepancies between the results. Also, as this study is heavily influenced by interpretivism that places emphasis on the importance of context, subjectivity and meaning, different observers coming from different backgrounds might interpret the results of this study in differing ways.

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Nevertheless, within the cultural and geographic context of this study, the findings remain reliable for the short-term.

Validity is concerned with whether the findings are really about what they appear to be about (Saunders et al., 2007). In other words, it refers to how well a specific research method or tool actually measures what it is said to be measuring. For a research method to be valid it must also be reliable, however, a reliable method need not necessarily be valid. (Saunders et al., 2007)

As part of this project a structured consumer survey with 74 responses and executive interviews with five industry experts were conducted. Doing five interviews and receiving 74 responses instead of just one single source of data increases the validity of this research. As part of this primary research, documentation was noted and collected so that validity of information is insured.

IV. RESULTS & FINDINGS 

In this section the results and findings of the primary research conducted as part of this paper are outlined. For simple comparison and analysis of results, quantitative data from the consumer survey will be formulated in pie charts, bar charts and tables, while qualitative data from the executive interviews will be presented in a descriptive manner that supports the quantitative findings. Some data, particularly full-length interviews may be shortened or omitted in this section, however an entire collection of all raw data can be found in Appendix C.

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1. QUANTITATIVE FINDINGS: CONSUMER SURVEY RESULTS 

A copy of the full consumer survey containing all questions can be found in Appendix A. It was sent out on February 14, 2007 and received 74 responses, the results of which are outlined below:

Question 1: “Please select your gender.”

Question 2: “What are your hobbies and interests?”

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Question 3: “Have you ever used web-content such as videos, photos, written articles, or podcasts created by web-users on websites such as YouTube, Flickr, public blogs, etc…? If so, which sites did you use?”

Question 4: “How many times do you use these sites?”

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Question 5: “What are the main reasons for you using this web content?”

Question 6: “Do you strictly consume such web-content, or do you also participate in comments/reviews and/or generate your own content such as videos, photos, written articles, or podcasts?”

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Question 7: “Do you use any social networking sites such as Facebook, MySpace, LinkedIn, Orkut etc?”

Question 8: “If yes, which ones do you use?”

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Question 9: “How often do you make use of such networking sites?”

Question 10: “What are the main reasons for you using these networking sites?”

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Question 11: “Have you ever used online product/service reviews to inform yourself before deciding on purchases?”

Question 12: “If so, for how many purchases have you used such online reviews to make a buying decision in the last 12 months?”

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Question 13: “On a scale from 1-5, how strongly do online product/service reviews influence your buying decision?”

Question 14: “If the above mentioned web sites (some have already started to do so) introduced advertising, what would be your preferred way of receiving it?”

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Question 15: “How would the introduction of advertising affect your participation in such sites?”

Question 16: “Do you take notice of advertising on websites?”

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Question 17: “If so, what types of advertising do you notice? If no, why not?”

Results Table 1 Do you take notice of advertising on websites?

If so, what types of advertising do you notice? (Most common answers)

Yes Yes Yes Yes Yes

I notice smart, witty advertising I notice anything exciting or different I notice well-designed advertising Large banners or special offers Content-specific information, relevant information If no, why not? (Most common answers)

No No No No No

I find them annoying Intrusive, I automatically block them out of sight Not interested Habit of ignoring advertising Tendency to focus on content, not advertising

2. QUALITATIVE FINDINGS: EXECUTIVE INTERVIEWS 

The executive interviews were conducted between February 13, 2007 and March 06, 2007 and 5 responses were received, the results of which are summarised below:

QUESTION 1: “IS CONSUMER‐GENERATED MEDIA A THREAT TO THE EXISTING  ADVERTISING INDUSTRY? HOW DO YOU THINK THE INDUSTRY WILL COPE WITH AND  ADAPT TO CGM?” 

Achara Massodi (Insights Scout, MindShare Bangkok) strongly feels that “it would be dangerous not to consider [CGM] a threat” since “there are so many examples of how groups of consumers are connecting to each other, creating their own media, brands, worlds, and completely by-passing the traditional media channels established by the big brands”. She believes that in order to cope with CGM, advertisers and media

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planners must “constantly monitor […] social network structures, both on and offline”, become “more creative than ever, but also engaging” and should involve themselves “in social networks and blogging” while also “responding to positive and negative comments”. Andre Nair (CEO, GroupM South-East Asia & South Asia) does not see CGM as a threat. He believes that CGM is “part of the evolution of the marketing communications landscape” but concedes that “some view it as a threat because it appears, and is in reality, out of their control”. According to Kevin Roberts (CEO Worldwide, Saatchi & Saatchi) “the industry has to transform, re-invent and give up control” in order to cope. Deborah Zdobinski (Senior Vice President & Executive Director Corporate Communications, Publicis USA) does not feel that “anyone in the business thinks that consumers are going to be creating all the communications for marketers in the near future, if ever”, and therefore does not view CGM as a threat.

QUESTION 2: “HOW CAN EXISTING COMPANIES CAPITALISE ON CGM?” 

Achara Masoodi (Insights Scout, MindShare Bangkok) states that in order to capitalise on CGM, “advertisers and marketers must embrace, not resist CGM.” She goes on to say that “the industry will eventually realize that the best way to get consumer’s attention is to find ways to help them engage in their passions.” Andre Nair (CEO, GroupM South-East Asia & South Asia) states that by “putting short form commercial content […] onto platforms like YouTube”, marketers can exploit CGM for their benefits. He also states that another possible way to capitalize on CGM would be to have “contests or promos for users to create commercial messages”. Baxter Jolly (Managing Director, Weber Shandwick Singapore) thinks that “companies should see CGM as effective feedback channels where consumers share their opinions, complaints and experiences.” He suggests using these views to “measure if advertisements or campaigns have effectively communicated the brand's image.” Finally, Kevin Roberts (CEO Worldwide, Saatchi & Saatchi) thinks that companies can capitalise on CGM “by feeling no fear and letting go!”

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QUESTION 3: “IN YOUR OPINION, IS CGM SIMPLY A MARKETING FAD OR AN  UNAVOIDABLE FUTURE OF MARKETING? WHY?” 

Achara Masoodi (Insights Scout, MindShare Bangkok) believes that “CGM is here to stay” due to the “choice of content”, “control over when and where to consume”, and most importantly due to its “dynamic and interactive” character. Andre Nair (CEO, GroupM South-East Asia & South Asia) states that CGM “is not a fad but an extension of the intrinsic nature of the web and will remain a core element of this medium.” Furthermore, Baxter Jolly (Managing Director, Weber Shandwick Singapore) thinks that CGM will “continue to have a strong influence over marketing programs.” On the other hand, Kevin Roberts (CEO Worldwide, Saatchi & Saatchi) feels that CGM “could be a fad […] unless the quality improves”, and Deborah Zdobinski (Senior VicePresident & Executive Director Corporate Communications, Publicis USA) believes that CGM is a “trend” or a fad because “in the future […] the novelty of simply being consumer generated will wear thin […] and it will have to evolve like everything else. Nothing stands still in the new media landscape.”

QUESTION 4: “DO YOU HAVE ANY ADDITIONAL THOUGHTS?” 

Andre Nair (CEO, GroupM South-East Asia & South Asia) states that “we cannot exploit consumers; we can only ride on them or pay them or co-opt them”. Baxter Jolly (Managing Director, Weber Shandwick Singapore) adds that CGM “has led to issues such as intellectual property [infringement], privacy, and defamation, which players like YouTube have had to address. Developments surrounding these issues are likely to surface, so media and advertising industry players will have to keep a close eye on this.”

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V. ANALYSIS 

In this section the results and findings from the preceding section are described, analysed, evaluated and compared to the secondary research contained within the literature review of this paper. Quantitative data from the consumer survey will be analysed in a numerical way and supported by statistical analyses, using SPSS (a statistical analysis program), where appropriate. Qualitative findings from the executive interviews will serve as insight into certain quantitative results, and provide further support for secondary research findings and for accomplishing the objectives of this paper.

1. CONSUMER PROFILES 

As part of the quantitative consumer survey, answers were submitted by 74 respondents, of which all (100%) are CGM users and, as seen in Chart 1, were nearly equally split between males (45.9%) and females (54.1%).

The top 4 hobbies of respondents are Movies/Cinema (78.4%), Traveling (74.3%), Shopping (59.5%) and Surfing the web (56.8%) as shown in Chart 2. Surfing the web seems to be a popular pastime, outpacing the once highly popular hobby of watching television (47.3%). This result is in general agreement with the previously mentioned statement that “the Internet […] has woven itself into people's daily lives” (Eisenberg 2004). It also supports Eisenberg’s findings that “Internet users watch less television than non-users” and that the Internet is slowly replacing the traditional television. Hence the Internet has very much become a major part of people’s lives and seemingly plays a bigger role than many other hobbies.

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2. CONSUMER ATTITUDES 

2.1 CONSUMER BEHAVIOUR ON CGM SITES 

As displayed in Chart 3, the three most popular CGM sites are YouTube (87.8%), Blogspot (45.9%) and Flickr (29.7%). It is interesting to see that a young service such as YouTube, which has only been in existence since February 14th 2005, ranks number one on the CGM user’s list, outpacing Blogspot by almost double. A possible reason for this is that videos are naturally more attractive and entertaining than plain text in blogs, and because people tend to watch videos more easily than they read written articles, YouTube has taken the online consumers by storm.

Chart 4 illustrates that there is a fairly equal spread of frequencies in CGM usage. Although a large number of users utilise it on either a daily basis (23.0%) or 2-5 times a week (23.0%), there is also a significant amount of users who employ it only once a week (27.0%) or less than that (27.0%). This is possibly due to the highly diverse lifestyles and backgrounds of consumers whereby they have different kinds of needs and amounts of spare time in their lives.

As shown in Chart 5, Entertainment (94.6%) and keeping up with News/Happenings (48.6%) dominate the reasons for why consumers utilise CGM sites. Education (24.3%) trails these two reasons by a large gap, and some other reasons of usage that respondents gave are networking, researching and maintaining generated content. These results give potential marketers a clear profile of consumers, describing what drives them towards Consumer Generated Content and what their main intentions or purposes are. The data specifically suggests that CGM would be a highly effective tool in the domains of entertainment and news coverage, while being less suited for the domain of education.

Chart 6 shows that 47.4% of CGM users are purely consumers, while 28.2% are both consumers and participants, whereby they not only consume CGM but also participate in writing reviews, posting comments, and voting on particular issues. 24.4% of CGM

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users see themselves as all three: consumers, participants and content generators. In addition to consuming CGM and participating in writing reviews, voting, and posting comments, these respondents also create content in the forms of written blogs, videos, music and podcasts. These findings tell us that a large portion (47.4%) of CGM users are invisible, meaning that they simply consume content and are not involved in the creation of content or participation. True content generators make up the smallest group with only 24.4%, suggesting that a mere quarter of the CGM population is responsible for generating and driving the entire spectrum of new features. In reference to the stimulation of CGM depicted earlier in Figure 4, this would mean that in 75% of the cases, users present a ‘dead-end’ for information. In only 25% of the cases, users actually contribute towards the overall chain-reaction that spreads information throughout the entire consumer community. This presents some challenges to marketers, but also suggests that there is still tremendous potential within the CGM community that has not been tapped yet. If, for whatever reasons, a marketer were to be able to tap into the ‘invisible’ 75% of CGM users and stimulate their contribution towards the flow of information, then the speed of diffusion and the reach of the campaign would dramatically increase. As stated by Achara Masoodi in her interview, “advertisers and marketers must embrace, not resist CGM.”

2.2 CONSUMER BEHAVIOUR ON SOCIAL NETWORK SITES 

As shown in Chart 7, the majority (85.1%) of survey respondents make use of Social Networking Sites. The three most used Social Networking Sites are: Friendster (50.0%), Facebook (41.9%) and MySpace (25.7%) as depicted in Chart 8.

One may observe in Chart 9 that the most common frequencies of usage for Social Networking Sites are daily usage (34.9%) and usage less than once a week (28.6%). This wide gap is most likely due to the difference in lifestyles of consumers. Daily usage might be due to the fact that certain consumers have become addicted to Social Networking Sites, a new phenomenon that has recently made headlines (Hurst 2005). Usage less than once a week could be popular with consumers that are using Social Networking Sites to simply keep in touch with old friends from time to time.   Page 44

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Regarding this issue, we see in Chart 10 that keeping in touch with old friends (77.0%) dominates the reasons for usage of Social Networking Sites, while entertainment is the runner up with 43.2%.

2.3 CONSUMER BEHAVIOUR ON REVIEW SITES    Chart 11 depicts that a large majority (91.9%) of respondents make use of review sites. However, only 29.4% of respondents have made use of review sites for the majority of their purchases, while the majority (70.6%) of respondents state that they have used review sites for only less than half of their purchases (Chart 12).

As seen in Chart 13, most respondents (60.8%) believe that the influence of review sites on their buying decision is high or very high. Only 27.0% of respondents believe that the influence is moderate and even less respondents (12.2%) believe the influence is low or very low. By combining this with results obtained from Charts 11 & 12 this suggests that usage of review sites is generally strong and influence on consumers’ buying decisions is fairly high, but as of yet only few review site aided purchases have been made. Further statistical analysis of results in Chart 12 & 13, as shown below in Figure 8, reveals that there is a highly positive correlation (+0.577) between products purchased due to review sites and the perceived strength of influence. Hence marketers could exploit this medium to influence consumers and use it as a promotional tool by engaging with customer reviews and developing their image. This is supported by Baxter Jolly’s statement that “companies should see CGM as effective feedback channels where consumers share their opinions, complaints and experiences.” Statistical calculation using SPSS

C13. Strength of Influence

Pearson Correlation: Sig. (2-tailed) N

C12. Number of Purchases 0.577 0.000 74

FIGURE 8 – STATISTICAL CORRELATION BETWEEN DATA DISPLAYED IN CHART 12 AND CHART 13 

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3. EFFECTS OF ONLINE ADVERTISING  

When asked about their preferred way of receiving ads on CGM (Chart 14), SNS and review sites, respondents state Banners (60.8%) as their first choice, and Text-links (48.6%) as their second choice. Pre-content features are also fairly popular, taking 16.2% of the vote, while Pop-ups seem to be unpopular (6.8%). As far as consumer acceptance of advertising is concerned, this data gives marketers a clear indication on what the right approach to traditional advertising on CGM sites is: Banners and Textlinks.

Chart 15 shows that only 4.1% of respondents feel that website advertisements affect them somewhat positively, while 54.1% feel that advertisements affect their participation negatively or somewhat negatively. Many respondents (41.9%) are indifferent to advertisements, stating that they do not affect them in any way. When asked to justify their answers, two strong camps of opinions emerged among respondents: Respondents who felt that advertisements affect their participation negatively or somewhat negatively often stated that such advertisements were “annoying, intrusive, irritating, distracting and preventing users from obtaining information efficiently”. Respondents who were indifferent to advertisements often stated that they have no effect on them because they are “able to consciously ignore them” together with any other unwanted content. The latter attitude is also reflected in Chart 16, in which 52.7% of respondents claim that they do not take notice of advertisements

on

websites.

The

remaining

47.3%

who

do

take

notice

of

advertisements on websites state that they take notice of advertisements that are “smart, witty, exciting, different, or well-designed, are large banners or special offers and contain content-specific information” (Results Table 1). Again, this data poses some obstacles to marketers, since it suggests that more than half (52.7%) of all CGM users do not take notice of their online campaigns. However, this survey question was only related to traditional advertising, i.e. banners, text-links or popups, and did not include the previously discussed stimulation of CGM within a community. Since, as illustrated earlier, content generated by fellow users is seen as a more trusted source of information among CGM users, this data suggests that by using the method of stimulation, marketers may tap into a large chunk of the 52.7% of CGM users that they would have normally lost with traditional advertising.

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Regarding this point, Andre Nair suggests in his interview that by “putting short form commercial content […] onto platforms like YouTube”, marketers can exploit CGM for their benefits. He also states that another possible way to capitalise on CGM would be to have “contests or promos for users to create commercial messages”.

4. EFFECTIVENESS OF CGM AS A MARKETING TOOL

The results obtained from this survey paint a picture of online users who are deeply involved in CGM and are highly influenced by it. Video/blog sites, social network sites and product/service review sites all command a lot of influence over their users. As shown in Chart 5, the results specifically suggest that CGM is predominantly used for the domains of entertainment and news coverage, and would therefore be a highly effective marketing tool in these areas. The growing consumer dissatisfaction with traditional online advertising as illustrated in Charts 15 & 16 and Results Table 1, increases the need for a new approach to online marketing. For this purpose CGM is an ideal candidate, since it is highly adaptable and consumers have a higher trust in it than they have in other online campaigns. Finally, it is important to note that results shown in Chart 6 also indicate that the hidden or ‘invisible’ portion of online consumers that currently do not generate any content represents an as of yet untapped opportunity that could make CGM an even more effective marketing tool in the near future. 

5. CGM’S FUTURE IMPACT ON THE EXISTING INDUSTRY 

Regarding the issue of traditional media companies having to give up power due to CGM, Kevin Roberts states that “the industry has to transform, re-invent and give up control” in order to cope. This statement is very much in line with the previously discussed democratisation of media and the shift of power from corporations to consumers. Kevin Roberts’ view very much supports the idea that marketers will have to listen more and more to consumers and learn the ways of CGM. If they do so and learn for example how to successfully implement stimulation campaigns, they might

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be able to regain some of that lost power and control, and thrive in this quickly changing market.

6. CGM – FAD OR FUTURE?

On the question of whether CGM is simply a fad or the future, the interviewees have split opinions. Three of the five experts interviewed believe that CGM is not a fad due to its “choice of content”, “control over when and where to consume”, its “dynamic and interactive” character (Achara Masoodi), and because it is “an extension of the intrinsic nature of the web and will remain a core element of this medium” (Andre Nair). However, the opponents see the need for quality to improve (Kevin Roberts) and see the “novelty of simply being consumer generated wear[ing] thin”, and hence believe that CGM is a fad and not the future (Deborah Zdobinski). Indeed there are still many obstacles to be overcome, such as the possibility of CGM being economically unviable and creating huge intellectual property issues. However, many factors are pointing into the direction of extensive future use of CGM as a marketing tool. Not only is CGM an effective marketing tool and promises to become even more effective over time, but it is also already well into the ‘early majority’ stage of technological adoption, as is shown by Pew Internet & American Life Project’s (2006) research. Also, as indicated by results in Chart 13, the influence of CGM sites on consumers is incredibly high, and marketers will be drawn towards CGM as a marketing tool because of this.

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VI. CONCLUSION 

There are several insights that emerge from this focused, in-depth study of CGM. This section focuses on the five main objectives that this paper has tried to achieve by synthesising the research findings into valuable and valid conclusions.

One of the conclusions that can be drawn from the research results obtained from this project is that the majority of consumers use online communities containing CGM for reasons of entertainment and keeping up with the news. It is also evident that approximately three quarters of these people do not generate any content, but simply consume or participate passively within their online communities. Furthermore, the results point out that consumer’s frequency of usage of CGM varies widely and is fairly balanced across the spectrum, from people who use it on a daily basis to people who use it less than once a week. This is most likely due to differing lifestyles and differing states of acceptance of new technology amongst consumers.

Another conclusion that may be drawn from the research results of this paper is that online advertising has a predominantly negative effect on consumer participation in online communities. While the data shows that Banners and Text-links are the most popular forms of advertising among consumers, they still reduce participation of users to less than half the possible participation that a community could have without advertising. The data also suggests that the majority of the remaining consumers manage to ignore and not take notice of online advertising on CGM sites. Hence, one is forced to conclude that traditional online advertising is highly inappropriate and ineffective within the context of CGM. For this reason, this paper comes up with an alternative way of bringing a marketing message to consumers. This new way of marketing is the effective stimulation of CGM, by which a marketer stimulates an online

community

to

create

and

spread

the

marketer’s

message

through

complementary content.

One may also conclude that online users are deeply involved in the world of CGM and are highly influenced by it. Video/blog sites, social network sites and product/service   Page 49

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review sites all command a lot of influence over their users. This strong influence combined with CGM’s high measurability, compatibility, divisibility, credibility/trust among consumers and its high cost-benefit ratio for marketers, suggest that CGM is a highly effective marketing tool. The data specifically suggests that CGM would be a highly effective tool in the domains of entertainment and news coverage, while being less suited for other areas. In addition, it is important to note that results also show that the hidden or ‘invisible’ portion of online consumers that currently do not generate any content represents an as of yet untapped opportunity that could make CGM an even more effective marketing tool in the near future. This may be illustrated by considering the following: If CGM is currently effective with only approximately 25% of users actually generating it, how much more effective could it be if this number increased to, say 50%, within the next few years.

Concerning the question whether CGM is simply a fad or likely to be part of the future world of marketing, one may conclude that it is highly likely, or probable, that CGM is here to stay and will form an integral part of marketing in the future. Even though there are still many obstacles to be overcome, such as quality of content, the possibility of being economically unviable and intellectual property issues, many factors are pointing into the direction of extensive future use of CGM as a marketing tool. Not only is CGM an effective marketing tool and promises to become even more effective over time, but it is also already well into the ‘early majority’ stage of technological adoption. While this paper is unable to give a definitive answer to whether CGM will be in fact part of the future marketing world, it suggests a high likelihood of its sustained development and success within the media landscape.

Another conclusion of this paper is that the impact of CGM on advertising agencies is large and growing. The industry and the diffusion of information is becoming more and more democratic and traditional media firms find themselves having to give up large chunks of power and control to consumers. Industry leaders’ opinions seem to converge on the point that advertising agencies will have to listen more and more to consumers, and transform or even re-invent their business models in order to stay alive in the long-term. The full impact of CGM on the existing advertising industry will only be seen in the future, but it seems highly likely that the companies that will

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Consumer-Generated Media: Fad or Future?

adapt the quickest in this evolutionary game of business will be the ones to survive and thrive.

Finally, apart from achieving the above objectives, the results of this research project also suggest some additional findings that are worth mentioning. Firstly, the results support the view that the Internet is slowly replacing the TV, since more people are spending increasing times surfing the Internet instead of watching television. If this trend were to continue, it would mean that anything on the Internet, including CGM, will only grow even more in both exposure and influence on people’s lives and habits. This would in turn increase the effectiveness of CGM as a marketing tool and reduce the effectiveness of TV marketing. Secondly, the data shows that YouTube is by far the most popular CGM content provider currently on the Internet. This is particularly interesting because YouTube is such a young service and has not existed for very long. This sudden and overwhelming popularity of the first video sharing website on the Internet suggests that in the future Consumer-Generated Videos might well be the most popular and most effective form of CGM.

VII. EVALUATION AND FUTURE RESEARCH 

This section evaluates the limitations of this research project and suggests relevant future research possibilities that would deal with some of these limitations.

Firstly, this study was limited in both geographical and demographical information about consumers. For future research, it would be interesting to see some correlations between geographic locations, age or education levels and some of the measurements that were made as part of this project. For example, it would be interesting to find out consumer profiles of those users who use CGM daily and compare these profiles to the ones of consumers who use CGM less than once a week. Also, it could be useful to explore the consumer profiles of users who ignore online advertisements and compare them to profiles of consumers who do take notice of such campaigns.

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Consumer-Generated Media: Fad or Future?

Secondly, due to time constraints this study was limited to a rather small sample size of consumers and industry experts. A larger sample size would have given the results a higher reliability, and therefore possible future research would be to extend this research to a larger, broader audience of consumers and industry experts.

Thirdly, this study found a possible indication of a consumer addiction to Social Network Sites. However, since this is a completely unexpected finding, this paper cannot conclusively determine whether this is in fact the case. Therefore, future research could focus on this issue and try to resolve whether certain types of users are prone to become addicted to Social Network Sites, and if so, what their typical consumer profiles look like.

Finally, this study determined a high popularity for YouTube, but stops short of being able to explain why this is the case. Hence, it might be interesting to do a case study on this particular service to determine the factors of success that have driven YouTube since its founding.

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Consumer-Generated Media: Fad or Future?

VIII. REFERENCES

Nutley, M. (2006) Emerging Trends in New Media: New Trends in Media Campaigning and Digital Technology. [online] University of Bath, Bath. Available from: http://www.bcs.org/server.php?show=ConWebDoc.4701 [accessed 10 October 2006]

Bhuiyan, S.I. (2006) Impact of New Media Technology on Society. [online] UCLA Asia Institute, California. Available from: http://www.asiamedia.ucla.edu/article.asp?parentid=52164 [accessed 7 December 2006]

Blackshawl, P. & Nazzaro, M. (2004) Consumer-Generated Media: Word-of-Mouth in the Age of the Web-Fortified Consumer, pp. 2-3.

Blackshawl, P. (2005) The Pocket Guide to Consumer-Generated Media. [online] Available from: http://www.clickz.com/showPage.html?page=3515576 [accessed 10 October 2006]

Burrell, G. & Morgan, G. (1979) Sociological Paradigms and Organizational Analysis. London, Heinemann.

Cherns, A. (1976), “The Principles of Sociotechnical Design”, Human Relations, Vol.2 No. 9, pp. 783-792

Costopulos, N. (2006) Consumers like Companies that Let them Create Ads, But Young Adults still not Buying it. [online] American Marketing Association, Orlando. Available from: http://www.mplanet2006.com/pdfs/AMA%20Mplanet%20CGM%20Survey%20Release _FINAL.pdf [accessed 11 January 2007]

De Pelsmacker, P., Geuens, M. & Van den Bergh, J. (2001) Marketing Communications. London, Pearson Education Limited.

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Consumer-Generated Media: Fad or Future?

Dobson, S. (2005) Own label vs. Major brands. BA (Hons) Dissertation. London College of Communication.

Donaton, S. (2004) Madison & Vine: Why the Entertainment and Advertising Industries must Converge to Survive. United States of America, McGraw-Hill.

Easterby-Smith, Mark et al (2002) Management research. 2nd ed. London, Sage Publications.

Eisenberg, B. (2004) Who's Online-and What Are They Doing There? The first results of the World Internet Project has some answers and surprises. [online] Available from: http://www.gihyo.co.jp/magazine/SD/pacific/SD_0406.html [accessed 9 December 2006]

Foxall, G.R. (1995), “Science and interpretation in consumer research: a radical behaviourist perspective”, European Journal of Marketing, Vol. 29 No. 9, pp. 3-99

Mulgan, G. (1997), Connexity, how to live in a connected world. Boston, MA, Harvard Business School Press.

Feldman, J. (2005) How to Analyze Consumer-Generated Media. [online] Cymfony, Massachusetts. Available from: http://www.cymfony.com/nws_innws_story.asp?docid=20050606_31510.html [accessed 10 October 2006]

Kotler, P., Armstrong, G. & Cunningham, P.H. (2005) Principles of Marketing. 6th Canadian ed. Toronto, Pearson Education Limited.

Krauss, S.E. (2005), “Research Paradigms and Meaning Making: A Primer”, The Qualitative Report, Vol. 10 No. 4, pp. 758-770 Law, M., Lau, T. and Wong, Y.H. (2003), “From customer relationship management (CRM) to customer-managed relationship (CMR): unraveling the paradox with a cocreative perspective”, Marketing Intelligence and Planning, Vol. 21 No. 1, pp. 51-60.

  Page 54

Consumer-Generated Media: Fad or Future?

Leach, E.R. (1968) Ritual. In D.L. Sills (ed.) International encyclopedia of the social sciences. New York, Macmillan.

Lee, A.S. (1991), “Integrating positivist and interpretive approaches to organizational research”, Organization Science, Vol. 2, pp. 342-65.

Leiss, W., Kline, S., Jhally, S. & Botterhill, J. (2005) Social Communication in Advertising: Consumption in the Mediated Marketplace. 3rd ed. New York, Routledge.

McKenna, R. (1991) Relationship Marketing, Addison-Wesley, Wokingham. Neuman, W.L. (2006), Social Research Methods: Qualitative and Quantitative Approaches, Boston, Allyn and Bacon.

Pan, G. (2006) The Democratization of Media. [online] Available from:  http://www.mediacenterblog.org/2006/04/the_democratiza/ [accessed 16 February 2007]

Prabhaker, P. (2001), “Integrated marketing-manufacturing strategies”, Journal of Business and Industrial Marketing, Vol. 16 No. 2, pp. 113-28.

Remenyi, D., Williams, B., Money, A., & Swartz, E. (1998), Doing research in business and management: An introduction to process and method. London, Sage Publications.

Robson, C. (2002) Real World Research, 2nd ed., Oxford, Blackwell.

Rogers, E. (1986) Communication Technology: The New Media Society. New York, Free Press.

Rogers, E. (1995), Diffusion of Innovations. 4th ed., New York, Free Press.

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Consumer-Generated Media: Fad or Future?

Saunders, M., Lewis, P. & Thornhill, A. (2007) Research Methods for Business Students. 4th ed. Essex, Pearson Education Limited.

Van Dijk, J. (2006), The Network Society. 2nd ed. London, Sage Publications.

IX.BIBLIOGRAPHY 

Ahonen, T. & Moore, A. (2005) Communities Dominate Brands: Business and Marketing Challenges for the 21st Century. London, Futuretext Limited.

Anderson, C. (2006) The Long Tail: How Endless Choice is Creating Unlimited Demand. London, Random House Business Books.

Barker, C. (2000) Cultural Studies: Theory and Practice. London, Sage Publications.

De Pelsmacker, P., Geuens, M. & Van den Bergh, J. (2001) Marketing Communications. London, Pearson Education Limited.

Dobson, S. (2005) Own label vs. Major brands. BA (Hons) Dissertation. London College of Communication.

Donaton, S. (2004) Madison & Vine: Why the Entertainment and Advertising Industries must Converge to Survive. United States of America, McGraw-Hill.

Jaffe, J. (2005) Life After the 30-Second Spot: Energize Your Brand With a Bold Mix of Alternatives To Traditional Advertising. New Jersey, John Wiley & Sons, Inc.

Kotler, P., Armstrong, G. & Cunningham, P.H. (2005) Principles of Marketing. 6th Canadian ed. Toronto, Pearson Education Limited.

  Page 56

Consumer-Generated Media: Fad or Future?

Leiss, W., Kline, S., Jhally, S. & Botterhill, J. (2005) Social Communication in Advertising: Consumption in the Mediated Marketplace. 3rd ed. New York, Routledge.

Marris, P. & Thornham, S. (1999) Media Studies. Edinburgh, Edinburgh University Press Ltd.

McKenna, R. (1991) Relationship Marketing, Addison-Wesley, Wokingham. Burrell, G. & Morgan, G. (1979) Sociological Paradigms and Organizational Analysis. London, Heinemann.

Rosen, E. (2000) The Anatomy of Buzz: Creating Word-of-Mouth Marketing. London, HarperCollinsBusiness.

Saunders, M., Lewis, P. & Thornhill, A. (2007) Research Methods for Business Students. 4th ed. Essex, Pearson Education Limited.

Silverman, G. (2001) The Secrets of Word-of-Mouth Marketing. New York, AMA Publications.

Rogers, E. (1986) Communication Technology: The New Media Society. New York, Free Press.

Rogers, E. (1995), Diffusion of Innovations. 4th ed., New York, Free Press. Markus, M. (1991) Toward a “critical mass” theory of interactive media, in J. Fulk and C. Steinfield, Organizations and Communication Technology. Newbury Park, CA, Sage Publications.

McQuail, D. (2002) McQuail’s Reader in Mass Communication Theory. London, Sage Publications. Remenyi, D., Williams, B., Money, A., & Swartz, E. (1998), Doing research in business and management: An introduction to process and method. London, Sage Publications.

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Consumer-Generated Media: Fad or Future?

Mulgan, G. (1997), Connexity, how to live in a connected world. Boston, MA, Harvard Business School Press.

Van Dijk, J. (2006), The Network Society. 2nd ed. London, Sage Publications.

Journals

Law, M., Lau, T. and Wong, Y.H. (2003), “From customer relationship management (CRM) to customer-managed relationship (CMR): unraveling the paradox with a cocreative perspective”, Marketing Intelligence and Planning, Vol. 21 No. 1, pp. 51-60.

Prabhaker, P. (2001), “Integrated marketing-manufacturing strategies”, Journal of Business and Industrial Marketing, Vol. 16 No. 2, pp. 113-28.

Wong, Y.H, Chan, R. & Leung, T.K.P. (2005), “Managing information diffusion in Internet Marketing”, European Journal of Marketing, Vol. 39 No. 7/8, pp. 926-846

O’Connor, H., Madge, C. (2003), “Focus Groups in Cyberspace: Using the Internet for Qualitative Research”, Qualitative Market Research: An International Journal, Vol. 6 No. 2, pp. 133-143

Sweet, C. (2001), “Designing and Conducting Virtual Focus Groups”, Qualitative Market Research: An International Journal, Vol. 4 No. 3, pp. 130-135

Evans, M., Wedande, G., Ralston, L. & Hul, SV. (2001) “Consumer interaction in the virtual era: some qualitative insights”, Qualitative Market Research: An International Journal, Vol. 4 No. 3, pp. 150-159

Krauss, S.E. (2005), “Research Paradigms and Meaning Making: A Primer”, The Qualitative Report, Vol. 10 No. 4, pp. 758-770

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Consumer-Generated Media: Fad or Future?

Foxall, G.R. (1995), “Science and interpretation in consumer research: a radical behaviourist perspective”, European Journal of Marketing, Vol. 29 No. 9, pp. 3-99

Goulding, C. (1998), “Consumer Research, interpretive paradigms and methodological ambiguities”, European Journal of Marketing, Vol. 33 No. 9/10, pp. 859-873

Oliver, P., Marwell, G. and Teixeira, R. (1985) “A theory of the critical mass: interdependence, group heterogeneity, and the production of collective action”, American Journal of Sociology, Vol. 91 No.3, pp. 522-560

Cherns, A. (1976), “The Principles of Sociotechnical Design”, Human Relations, Vol.2 No. 9, pp. 783-792

Lee, A.S. (1991), “Integrating positivist and interpretive approaches to organizational research”, Organization Science, Vol. 2, pp. 342-65.

Periodicals

Blackshawl, P. & Nazzaro, M. (2004) Consumer-Generated Media: Word-of-Mouth in the Age of the Web-Fortified Consumer, pp. 2-3.

Internet Sources

Bhuiyan, S.I. (2006) Impact of New Media Technology on Society. [online] UCLA Asia Institute, California. Available from: http://www.asiamedia.ucla.edu/article.asp?parentid=52164 [accessed 7 December 2006].

Blackshawl, P. (2005) The Pocket Guide to Consumer-Generated Media. [online] Available from: http://www.clickz.com/showPage.html?page=3515576 [accessed 10 October 2006].

  Page 59

Consumer-Generated Media: Fad or Future?

Costopulos, N. (2006) Consumers like Companies that Let them Create Ads, But Young Adults still not Buying it. [online] American Marketing Association, Orlando. Available from: http://www.mplanet2006.com/pdfs/AMA%20Mplanet%20CGM%20Survey%20Release _FINAL.pdf [accessed 11 January 2007].

Eisenberg, B. (2004) Who's Online-and What Are They Doing There? The first results of the World Internet Project has some answers and surprises. [online] Available from: http://www.gihyo.co.jp/magazine/SD/pacific/SD_0406.html [accessed 9 December 2006].

Feldman, J. (2005) How to Analyze Consumer-Generated Media. [online] Cymfony, Massachusetts. Available from: http://www.cymfony.com/nws_innws_story.asp?docid=20050606_31510.html [accessed 10 October 2006].

Horrigon, J.B. (2006) Home Broadband Adoption: Home broadband adoption is going mainstream and that means user-generated content is coming from all kinds of internet users. [online] Pew Internet & American Life Project, Washington. Available from: http://www.pewinternet.org/pdfs/PIP_Broadband_trends2006.pdf [accessed 1 March 2007].

Hurst (2005) Warning: You too could be addicted to Facebook. [online] Daily Bruin, Los Angeles. Available from: http://www.dailybruin.ucla.edu/news/2005/feb/16/iwarning-you-too-could-be-addi/, [accessed 10 January 2007].

Johnson, B. (2006) Who's for YouTube?: Big business is suddenly getting interested in YouTube, a video-sharing website. And not everybody is happy.[online]Guardian Unlimited, United Kingdom. Available from: http://commentisfree.guardian.co.uk/bobbie_johnson/2006/04/youtube_threat_or_op portunity.html [accessed 5 March 2007].

Nutley, M. (2006) Emerging Trends in New Media: New Trends in Media Campaigning and Digital Technology. [online] University of Bath, Bath. Available from: http://www.bcs.org/server.php?show=ConWebDoc.4701 [accessed 10 October 2006].

  Page 60

Consumer-Generated Media: Fad or Future?

Pan, G. (2006) The Democratization of Media. [online] Available from:  http://www.mediacenterblog.org/2006/04/the_democratiza/ [accessed 16 February 2007].

X. APPENDIX

A. SAMPLE ON‐LINE SURVEY  1. PLEASE SELECT YOUR GENDER 

□

Male

□

Female

2. WHAT ARE YOUR HOBBIES & INTERESTS? PLEASE TICK ALL THAT APPLY. 

□

Art

□

Book Clubs

□

Business Networking

□

Camping

□

Dancing

□

Extreme Sports

□

Fishing/Hunting

□

Movies/Cinema

□

Museums/Art Galleries

□

Music/Concerts

□

Nightclubs

□

Performing Arts

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□

Playing Sports

□

Shopping

□

Surfing the Web

□

Traveling

□

Watching Sports

□

Watching Television

3. HAVE YOU EVER USED WEB‐CONTENT SUCH AS VIDEOS, PHOTOS, WRITTEN ARTICLES, OR  PODCASTS CREATED BY WEB‐USERS ON WEBSITES SUCH AS YOUTUBE, FLICKR, PUBLIC  BLOGS, ETC? 

□

Yes

□

No

4. IF YES, WHICH SITES DID YOU USE? PLEASE TICK ALL THAT APPLY. 

□

You Tube

□

Flickr

□

Last.fm

□

Technorati

□

Blogspot

□

Xanga

□

LiveJournal

□

Others

If you chose ‘Others’, please specify:

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5. HOW MANY TIMES DO YOU USE THESE SITES? 

□

Daily

□

2-5 times a week

□

Once a week

□

Less than that

6. WHAT ARE THE MAIN REASONS FOR YOU USING THIS WEB‐CONTENT? PLEASE TICK ALL  THAT APPLY. 

□

Entertainment

□

Education

□

News/Happenings

□

Others

If you chose ‘Others’, please specify

7. DO YOU STRICTLY CONSUME SUCH WEB‐CONTENT, OR DO YOU ALSO PARTICIPATE IN  COMMENTS/REVIEWS AND/OR GENERATE YOUR OWN CONTENT SUCH AS VIDEOS, PHOTOS,  WRITTEN ARTICLES, OR PODCASTS? PLEASE TICK ALL THAT APPLY. 

□

Consumer

□

Participant

□

Content Generator

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8. DO YOU USE ANY SOCIAL NETWORKING SITES SUCH AS FACEBOOK, MYSPACE, LINKEDIN,   ORKUT, ETC? 

□

Yes

□

No

9. IF YES, WHICH ONES DO YOU USE? PLEASE TICK ALL THAT APPLY. 

□

MySpace

□

FaceBook

□

Friendster

□

Hi5

□

Bebo

□

Faceparty

□

Friends Reunited

□

LinkedIn

□

Orkut

□

Multiply

□

WAYN

□

Others

If you chose ‘Others’, please specify:

10. HOW OFTEN DO YOU MAKE USE OF SUCH NETWORKING SITES? 

□

Daily

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□

2-5 times a week

□

Once a week

□

Less than that

11. WHAT ARE THE MAIN REASONS FOR YOU USING THESE NETWORKING SITES? PLEASE  TICK ALL THAT APPLY. 

□

Professional Networking

□

Keeping in touch with old friends

□

Entertainment

□

Education

□

News/Happenings

□

Others

If you chose ‘Others’, please specify:

12. HAVE YOU EVER USED ONLINE PRODUCT/SERVICE REVIEWS TO INFORM YOURSELF  BEFORE DECIDING ON PURCHASES? 

□

Yes

□

No

13. IF SO, FOR HOW MANY PURCHASES HAVE YOU USED SUCH ONLINE REVIEWS TO MAKE A  BUYING DECISION IN THE LAST 12 MONTHS? 

□

None

□

Few Purchases

□

Roughly Half of All Purchases

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□

Most Purchases

□

All Purchases

14. ON A SCALE FROM 1‐5, HOW STRONGLY DO ONLINE PRODUCT/SERVICE REVIEWS  INFLUENCE YOUR BUYING DECISION 

Weakly

1

2

3

4

5

Strongly

15. IF THE ABOVE MENTIONED WEB SITES (SOME HAVE ALREADY STARTED TO DO SO)  INTRODUCED ADVERTISING, WHAT WOULD BE YOUR PREFERRED WAY OF RECEIVING IT?  PLEASE TICK ALL THAT APPLY.  

□

Banners

□

Pop Ups

□

Pre-content features (video, audio)

□

Text Links

□

Others

If you chose ‘Others’, please specify:

16. HOW WOULD THE INTRODUCTION OF ADVERTISING AFFECT YOUR PARTICIPATION IN  SUCH SITES?  

□

Negatively

□

Somewhat Negatively

□

No Effect

□

Somewhat Positively

□

Positively

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Please explain why.

17. DO YOU TAKE NOTICE OF ADVERTISING ON WEBSITES? 

□

Yes

□

No

18. IF SO, WHAT TYPES OF ADVERTISING DO YOU NOTICE? IF NO, WHY NOT? 

B. SAMPLE EXECUTIVE INTERVIEW QUESTIONS 

1. Is Consumer-Generated Media a threat to the existing Advertising Industry? How do you think will the industry cope with and adapt to Consumer-Generated Media?

2. How can existing companies capitalise on communicate their brands effectively?

Consumer-Generated

Media

to

3. In your own opinion, is Consumer-Generated Media simply a marketing fad or an unavoidable future of marketing? Why?

4. Do you have any additional thoughts on Consumer-Generated Media that you think are important?

5.

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C. EXECUTIVE INTERVIEWS RESPONSES 

IS CONSUMER‐GENERATED MEDIA A THREAT TO THE EXISTING ADVERTISING INDUSTRY?  HOW DO YOU THINK THE INDUSTRY WILL COPE WITH AND ADAPT TO CGM? 

There are so many examples out there of how groups of consumers are connecting to each other, creating their own media, brands, worlds, and completely by-passing the traditional media channels established by the big brands, that it would be dangerous not to consider it a threat. To illustrate, check out how the youth ‘cosplay’ culture is strengthening through their online network:

(http://thebigswitch.wordpress.com/2007/01/09/cosplay-in-asia-andeverywhere/ )

Coping with this will require that advertisers and media planners to constantly monitor the changing social network structures, both on and offline. Ideas must be not only be more creative than ever, but also engaging.

CGM can have a real impact on a brand’s positioning, which cannot be controlled, planned, or bought. To be able to understand and use CGM to their advantage, they must first understand how they and their brands can become part of this community. This means getting their hands dirty and involving themselves in social networks, blogging, and responding to positive and negative comments, rather than apart as an outsider.

ACHARA MASOODI  INSIGHTS SCOUT ‐ MINDSHARE REGIONAL (BANGKOK) 

I don’t see this as threat; otherwise we’d view all change as threatening. It’s part of the evolution of the marketing communications landscape. Some view this as a threat because it appears, and is in reality, out of their control. By its very definition, and unlike more conventional media where the Agency or advertiser has the means to control the message and its advertised form, UGC is under the control of the consumer or user.

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The essential fact is that all media are increasingly coming under the control of the consumer primarily due to technology. The consumer’s control of the simply remote control has expanded exponentially through a host of new technology that allows them to view/read what they want, when they want and now, how they want.

The natural expansion of this trend is now for users to create the content that goes onto platforms they interact with.

This is what the industry has to come to terms with.

ANDRE NAIR  CEO OF GROUP M SOUTH‐EAST ASIA & SOUTH ASIA 

The consumer is boss. The future is in attracting and engaging her. Stimulating her to produce content is fun. The industry has to transform, reinvent and give up control.

KEVIN ROBERTS  CEO WORLDWIDE OF SAATCHI & SAATCHI 

Advertisers have found opportunities within Consumer-Generated Media (CGM) - one example is how blogs have become a new medium for online advertising. It benefits both advertisers and readers - advertisers are able to influence readers and interest groups; readers can choose to know more about a product or service by clicking on the online ads in the blog.

BAXTER JOLLY  MANAGING DIRECTOR OF WEBER SHANDWICK SINGAPORE 

I don’t think anyone in the business thinks that consumers are going to be creating all the communications for marketers in the near future, if ever.

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Even now, some of the CGM was evolved and executed by the agency, even if the main idea came from a consumer.

One issue is that if consumers are going to create commercials like the Doritos spot in the Super Bowl and the Dove commercial in the recent Oscars, they should be held to the same standards of excellence in terms of production, strategy and sales results that agencies are. Right now the standards are much lower for CGM.

Who knows how the industry will adapt. In the future, you may see agencies partnering with consumers or specialized web sites like openad.net that are new forums for marketing ideas or specialized companies cropping up that offer executional/production services for consumers, like the Department of Doing, in Australia.

DEBORAH ZDOBINSKI  SENIOR VICE PRESIDENT OF PUBLICIS USA 

HOW CAN EXISTING COMPANIES CAPITALIZE ON CGM? 

Advertisers and marketers must embrace, not resist CGM. The industry will eventually realize that the best way to get consumer’s attention is to find ways to help them engage in their passions.

That could mean making it easier or more enjoyable for them to pursue a specific hobby like cosplay, or just supporting the whole CGM movement as a whole. For example, YouTube competitor Metacafe gives away ‘Cash for Clips’, with the amount of cash given to the clip owner based on the number of times the clip has been viewed. Similarly, Australia’s Telstra encourages users to upload their video clips, with users rewarded with a 50-50 rev share ever time other users download the content to their mobile phones.

Another way that partnerships. One local web portals viewers a variety paid-for.

brands can capitalize on CGM is through collaboration and leading example is MTV Korea’s recent alliance with four to create a diverse, multimedia platform that offers their of MTV branded and non-branded content, both free and

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Consumer-Generated Media: Fad or Future?

(http://thebigswitch.wordpress.com/2007/02/13/mtv-korea-teams-up-withmultimedia-portals/).

Here, MTV is actually helping consumers by offering them a simpler way to manage the scattered content around them.

ACHARA MASOODI  INSIGHTS SCOUT ‐ MINDSHARE REGIONAL (BANGKOK) 

There is a lot of talk on how CGM can be used or ‘exploited’ for marketing communications.

These range from:

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Putting short form commercial content (TVC’s or branded content) onto platforms like YouTube. The exploding soda bottles effort last year is an example.

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Although yet to be seen is how platforms, like YouTube, can begin to segment their user/subscriber base thus allowing messages (in whatever form) to be better targeted - either through demography or lifestyle/attitudinal/interest segmentation.

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Some have co-opted users’ content to be used as viral communication.

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Some have created contests or promos for users to create commercial messages.

ANDRE NAIR  CEO OF GROUP M SOUTH‐EAST ASIA & SOUTH ASIA 

By feeling no fear and letting go!

KEVIN ROBERTS  CEO WORLDWIDE OF SAATCHI & SAATCHI    Page 71

Consumer-Generated Media: Fad or Future?

Companies should see CGM as effective feedback channels where consumers share their opinions, complaints and experiences. These views can be used to measure if advertisements or campaigns have effectively communicated the brand's image. Feedback also gives companies the opportunity to fine-tune or tweak the messages in their campaigns.

Similarly, PR can leverage the opinions and views on CGM sites to identify and resolve potential issues early, or involve influential bloggers and forum moderators in their user outreach programs and take the opportunity to educate them on the company's messages.

BAXTER JOLLY  MANAGING DIRECTOR OF WEBER SHANDWICK SINGAPORE 

CGM might not be right for every marketer. Just like all decisions about a media plan for a brand...whether to do a TV spot, a print ad or any other type of communication...it’s all about the business objectives and who the marketer is trying to reach.

DEBORAH ZDOBINSKI  SENIOR VICE PRESIDENT OF PUBLICIS USA 

IN YOUR OPINION, IS CGM SIMPLY A MARKETING FAD OR AN UNAVOIDABLE FUTURE  OF MARKETING? WHY? 

CGM is here to stay. The more people have access to the Internet, the more consumers will be swept into the CGM culture in one way or other, because it’s where they can find the most choice for content, where they have the most control over when and where to consume it, and most importantly, it’s dynamic and interactive.

Everyone will be affected by CGM sooner or later. A handful of them will play the active role of the content creator, by consistently blogging and uploading videos, images, and podcasts. Another larger group will also contribute but to   Page 72

Consumer-Generated Media: Fad or Future?

a lesser degree, by posting their opinions on content that’s already there. Then there will be the more passive majority who will sit back and enjoy the scene quietly as the audience, but still be influenced by the content they consume. Eventually, even those who are disconnected from the online world (which will become fewer and fewer) will be affected by CGM as they mingle offline with those who are linked to the online community.

However, I wouldn’t call it an “unavoidable future of marketing” either, because it simply is another powerful marketing tool that needs to be considered along with the traditional ones, and used appropriately.

ACHARA MASOODI  INSIGHTS SCOUT ‐ MINDSHARE REGIONAL (BANGKOK) 

This is not a fad but an extension of the intrinsic nature of the web and will remain a core element of this medium. It is interesting to speculate how this trend will migrate to TV like media.   ANDRE NAIR  CEO OF GROUP M SOUTH‐EAST ASIA & SOUTH ASIA 

It could be a fad…. Unless the quality improves

KEVIN ROBERTS  CEO WORLDWIDE OF SAATCHI & SAATCHI 

The pervasiveness and popularity of the Internet has been the driving force for CGM. With broadband penetration increasing in Asia, CGM has become an accepted and widely accessed information channel, so it will continue to have a strong influence over marketing programs. YouTube and MySpace have already shown to have a huge impact.

BAXTER JOLLY 

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Consumer-Generated Media: Fad or Future? MANAGING DIRECTOR OF WEBER SHANDWICK SINGAPORE 

Consumer-Generated Media is definitely a trend, but one that I do not think will fade quickly. It’s a great opportunity for marketers to understand their consumers better and to build a deeper relationship with them.

Right now, these spots are still a novelty and that makes them interesting...however, in the future I think that the novelty of simply being consumer generated will wear thin...and it will have to evolve like everything else. Nothing stands still in the new media landscape.

DEBORAH ZDOBINSKI  SENIOR VICE PRESIDENT OF PUBLICIS USA 

DO YOU HAVE ANY ADDITIONAL THOUGHTS ON CONSUMER‐GENERATED MEDIA  THAT YOU THINK ARE IMPORTANT? 

Crucially missing from many of these discussions is that phrase ‘exploited’ – we cannot exploit consumers; we can only ride on them or pay them or co-opt them.

ANDRE NAIR  CEO OF GROUP M SOUTH‐EAST ASIA & SOUTH ASIA 

Consumer-Generated Media has led to issues such as intellectual property, privacy, and defamation, which players like YouTube have had to address. Developments surrounding these issues are likely to surface, so media and advertising industry players will have to keep a close eye on this.

BAXTER JOLLY  MANAGING DIRECTOR OF WEBER SHANDWICK SINGAPORE 

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