What happened to the UGC* promise?

*User Generated Content

Not so long ago, the ‘next great thing’ was user generated content or UGC, anything form music and videos to news – young startups were lined up to stick it to the man and revolutionize the way content is created and consumed while boasting about the death of traditional media. Nowadays, advertising dollars are kept away from UGC and many of the startups are failing to monetize. Hulu and network sites, delivering anything but UGC, have become the advertising industry’s darlings. What happened?

Vanity
As with any new field, when startups ‘killed’ traditional media, they failed to see achievements founded and perfected by years of trial and error. Marketing, advertising, merchandising and even usability and design principals where re-invented from scratch – however justified in some cases, the baby was thrown with the bath water in others. Re-inventing a less rounder wheel may be confused with vision, but generates a less efficient vehicle leading to a rougher ride. As change was very quick, there was no time to optimize and perfect the new ‘wheels’.

Wrong Revenue Model
Many of these new companies, focusing on the audience battle, left the business model for later. A free ice cream parlor will have many clients – yet it probably won’t survive. Then, when VCs started asking ‘where’s my money?’ and the advertising was ‘slapped’ on, it was traditional banner advertising because that’s what the sales people, often closer in mindset to the advertisers than to the companies they worked for, knew how to sell. Many businesses said they were ‘experimenting’ with advertising, but advertising, marketing and sales were not well integrated into the products themselves, rather perceived as add-ons.

UGC, by nature, has lower production values and is more risqué than traditional media. This deterred many advertisers, weary of lower quality reflecting on their brands and cautious of having their ads ending up in ‘unsafe’ environments. Many a site, by chasing traditional brand advertisers failed in building an alternative scalable context-based model that would work better with the type of content they promoted. You can’t ‘stick it to the man’ and then ask the ‘man’ to buy your wears at the same time.

Not All Creators Where Created Equal
Under the flag of ‘Web 2.0 Democracy’, most barriers for self-expression have been lifted. Amongst them were many of the things that come with corporate culture such as addiction to ratings and dollars but also quality standards and craftsmanship. While a half-clad girl in a suggestive stance is likely be popular, resulting in higher serving costs, brand advertisers shy away.

Another issue is having to sift through endless amounts of badly tagged materials, from someone’s lame prank to everybody else’s kids (those are never as cute or interesting as your own); leading to attempted solutions such as ranking (which very few users bother with) to sorting by popularity (which tends to adhere to the lowest common denominator).

Many of the sites, with founders coming from a technology background, failed in understanding creator’s needs – those who did, failed in connecting them with audiences.

One group of creators was very quick in adopting these new ways of thinking – spammers. These new media parasites further frustrate users, keep advertisers away and pollute the brands they abuse.

Some UGC Models Worked
Not all UGC failed. In some cases it was so successful that it threatened traditional media and in others, new markets were created. iStockphoto, a user created stock photography site succeeded and was acquired by Getty Images after becoming a serious player in the field. Their secret was reliance on selling, not advertising and on a target audience similar to (or the same as, in many cases) the creators as well as clear guidance and quality thresholds.

Etsy, Spreadshirt and Ponoko are another examples where much was invested in understanding the creator community and relying on an audience that is similar or one and the same as the creators.

Other UGC, open source and collaborative projects, such as Wikipedia and Blender do not measure success in the money they make, but rather in the benefit they bestow on the community.

Not Over Yet
The UGC war is far from over as network sites, rising as a result of backlash from the chaotic fast rise of UGC, are still struggling to find a valid business model. UGC has conquered ground with audiences, but much of it is waiting for innovative thinking that will solve issues around monetization. Corporations have also identified the power of crowd sourcing and are experimenting with working it into their process.

So will the world be a democratic utopia where everybody’s a creator? Probably not. However, no longer is corporate media the sole owner of content creation and distribution.