1. Impact
of
User-­‐Generated
Content
on
Retail
Entities
by
Victoria
C.
Gregory
ICE
Research
Analyst
ICE
—
Interactive
Communications
Enterprises

2. Table
of
Contents
I.
Letter
Proposal
II.
Executivie
Summary
III.
Research
Report
a.
Understanding
User-­‐Generated
Content
b.
UGC:
An
Economic
Phenomenon
c.
Roadmap
to
generate
positive
UGC
i.
Facebook
ii.
Twitter
iii.
SEO
iv.
Customer
Reviews
d.
Case
Studies
IV.
Appendices
and
References
2

3. ICE — Interactive Communications Enterprises
Memorandum
To:
Jim
Porter,
President
of
ICE
From:
V ictoria
C.
Gregory,
Research
Analyst
Date:
13
March
2012
RE:
A
proposal
for
V ictoria
Gregory
to
research
the
economic
impact
of
user-­‐generated
content
(UGC)
on
retail
businesses.
I
h ypothesize
that
this
research
will
d emonstrate
the
heavy
influence
user-­‐generated
content
has
on
a
consumer’s
purchasing
b ehavior.
Understanding
and
identifying
this
influence
will
a llow
ICE
to
show
their
clients
how
to
propel
positive
UGC
that
will
ultimately
increase
revenue
and
drive
conversions.
Purpose
&
“A
brand
is
n ot
what
we
tell
consumers
it
is,
it
is
what
consumers
tell
each
other
Significance
that
it
is.
( Brant
Barton)”
The
words
of
Brant
Barton
are
relevant
to
retailers
in
the
current
marketing
climate,
now
more
than
ever.
Implementing
UGC
to
boost
sales
and
increase
conversions
has
a lways
been
a
strong
desirable
for
retail
companies.
However,
doing
so
is
a
tricky
process.
Many
companies
have
had
failed
attempts,
or
worse,
have
b een
caught
in
illegal
efforts
to
create
UGC
themselves.
ICE
s trives
to
understand
this
relationship
a t
the
core,
and
offer
a
solution
for
companies
to
propel
the
quality
and
quantity
of
positive
UGC
relevant
to
their
brand
or
retail
entity.
Web
2.0
has
a llowed
for
users
to
d isseminate
their
thoughts
about
a
product
or
brand;
this
technology
produces
either
positive
or
n egative
repercussions
for
the
retail
company
at
hand.
What
holds
to
b e
important
is
to
acknowledge
the
presence
of
UGC,
and
the
fact
that
it
will
only
quantify
with
time
as
social
media
p latforms
increase
in
number
and
gain
a
larger
user
base
daily.
Retailers
n eed
to
understand
how
to
increase
the
a mount
of
p ositive
UGC
and
decrease
the
amount
of
n egative
UGC.
In
essence,
retailers
must
u nderstand
the
intricate
relationship
between
social
exchanges
( UGC)
and
economic
exchanges
(retail
p urchase
in-­‐store
or
eCommerce)
in
the
online
world
( Ghose,
2).
Figure
1
This
image
chronologically
shows
the
influence
of
UGC
on
purchasing
b ehavior.
In
Social
Media
Marketing:
The
Next
Generation
of
Business
Engagement,
this
image
is
referred
to
as
“The
S ocial
F eedback
Cycle”
(Evans,
5).
“This
loop
–
from
expectation
to
trial
to
rating
to
sharing
the
actual
experience
–
is
now
part
of
most
3

4. every
p urchase
or
conversion
process…
What
[it]
really
represents
is
the
way
in
which
Internet-­‐based
p ublishing
and
social
technology
has
connected
p eople
around
business
or
business-­‐like
a ctivities”
(Evans,
5).
This
n ew
connection
is
what
influences
an
end
user
to
make
a
particular
purchasing
decision.
Through
this
research
project,
ICE
will
understand
this
relationship,
and
thus
find
ways
for
retailers
to
s ee
a
greater
a mount
of
such
end
results.
Deliverables
• Roadmap
for
retail
companies
to
propel
positive
UGC.
• Case
s tudies
of
retail
companies
that
have
a
rich
amount
of
p ositive
USG
in
correlation
with
s trong
sales
and
conversion
rates.
• Implementation
of
a ccountability
and
measurability
of
retailer’s
products.
• Understanding
UGC
on
s everal
online
platforms
( i.e.
eCommerce
s ite,
Facebook,
Twitter,
Pintrest,
etc.).
Client
The
results
of
this
research
project
are
relevant
to
a ll
retail
companies.
However,
results
are
most
applicable
to
retail
companies
with
eCommerce
and
an
established
online
presence
in
social
media
and
LBS
p latforms.
Methodology/
Conduct
s econdary
research
through
exploration
of
scholarly
articles,
white
Plan
papers,
published
books,
etc.
to
u nderstand
b enefits
a nd
influence
of
UGC
on
retail
companies.
Research
analyst
will
also
conduct
primary
research
of
UGC
on
social
media
p latforms
and
eCommerces
s ites.
Examine
retailers
with
s trong
UGC
and
compare
findings
with
retail
companies
that
have
little
to
no
UGC.
Through
primary
and
secondary
research,
research
analyst
will
develop
a
roadmap
for
retailers
to
implement
positive
UGC
that
will
lead
to
a
boost
in
sales
and
h igher
conversion
rates.
Qualifications
• Professional
experience
in
implementing
eCommerce
technology
for
retail
companies.
• Social
Media
expert
with
professional
experience
in
conducting
tasks
related
to
social
for
global
brand
Red
Bull
North
America,
startup
Giftiki,
and
various
clients
of
451
Marketing.
• Personal
consumer
of
online
retail
vendors.
• Experienced
researcher
in
the
field
of
d igital
marketing
and
online
communications.
Benefits
Our
clients
will
understand
the
importance
of
UGC
and
receive
instructions
from
ICE
on
h ow
to
propel
positive
UGC.
This
will
a llow
for
s everal
client
b enefits:
• Stronger
brand
loyalty
• Higher
conversion
rates
• Drive
in
sales
• Acquisition
of
n ew
users/consumers
• Increase
in
brand
a wareness
• Strong
rapport
between
business
and
consumer
• Reinforced
image
and
culture
of
brand
• Enhanced
and
organic
SEM
and
SEO
(natural
results
of
having
a
greater
amount
of
UGC)
4

5.
Costs
Aside
from
my
own
labor,
this
project
is
a
zero
budget
effort.
The
d eliverables
will
be
a
result
of
research
conducted,
a nd
will
recommend
actions
for
clients
to
take
on.
Key
Sources
1.
Evans,
Dave.
(2010).
Social
Media
Marketing
:
The
Next
Generation
of
Business
Engagement.
Hoboken,
NJ:
S ybex.
2.
Ghose,
Anyndya.
(2008).
The
Economic
Impact
of
User-­‐Generated
and
F irm-­‐
Published
Online
C ontent:
Drections
for
Advancing
the
Frontiers
in
Electronicd
Commerce
Research.
(Doctoral
d issertation).
Retrieved
from
CeDER
Published
Papers.
New
York
University:
NY,
NY.
3.
Arnott,
Grant.
(27
August
2010).
Brant
Barton,
BazaarVoice
on
User-­‐Generated
Content.
Power
Retail.
Retrieved
from
http://www.powerretail.com.au/powerretail-­‐tv/brant-­‐barton-­‐bazaarvoice-­‐on-­‐
user-­‐generated-­‐content/.
5

6. Executive
Summary
In
today’s
economic
climate,
retailers
are
desperate
to
boost
sales
and
generate
conversions
more
than
ever.
ICE
can
offer
clients
a
cost-­‐effect
marketing
solution
tailored
to
current
consumer
shopping
habits
that
will
boost
client
sales,
naturally
improve
SEO,
build
brand
trust
and
awareness,
and
generate
leads.
These
benefits
are
the
result
of
understanding
and
strategically
participating
in
user-­‐generated
content.
While
our
client’s
consumer
is
currently
making
off
and
online
purchasing
habits
based
on
online
customer
reviews,
blogs,
forums,
product
review
websites,
and
ratings
on
eCommerce
websites,
ICE
Research
Analyst,
Victoria
Gregory,
has
proposed
to
implement
research
of
these
platforms
and
their
content
to
provide
a
roadmap
that
will
allow
ICE
to
make
these
benefits
a
reality
for
our
clients.
The
relationship
between
user-­‐
generated
content
and
a
product
or
brand
is
more
important
than
it
has
ever
been,
and
will
only
continue
to
show
stronger
trends.
As
an
innovative
agency,
ICE
must
be
a
pioneer
in
this
emerging
marketing
platform
and
optimize
our
client’s
presence
and
participation
in
UGC.
A
conversation
is
taking
place
online
about
our
clients,
and
they
need
to
be
apart
of
it.
6

7. Research
Report
A.
Understanding
User-­‐Generated
Content
(UGC)
“User-­‐generated
content
comes
from
regular
people
who
voluntarily
contribute
data,
information,
or
media
that
then
appears
before
others
in
a
useful
or
entertaining
way,
usually
on
the
Web—for
example,
restaurant
ratings,
wikis,
and
videos.”1
User-­‐generated
content
is
a
growing
trend
and
in
tandem
to
its’
growth
hails
the
value
of
its’
presence
and
exposure
to
potential
consumers
of
a
brand
or
retail
entity.
In
the
simplest
words
reflective
of
extensive
research
conducted
by
ICE
Analyst,
Victoria
Gregory,
UGC
is
media
created
by
a
user,
free
of
advertising
incentives.
UGC
varies
greatly
in
medium
and
utilization,
however,
this
research
project
focuses
on
its’
economic
impact
for
a
brand
or
retail
entity.
The
emergence
of
UGC
is
ultimately
reflective
of
emerging
technologies
that
have
become
available
and
affordable
to
the
general
public.
UGC
arguably
did
not
exist
in
the
past
because
the
digital
communication
platforms
vastly
used
today
were
not
available
before
the
existence,
development,
and
evolution
of
the
Internet.
Today,
however,
consumers
are
constantly
generating
content
opinionative
of
a
product
or
brand.
Such
content
is
available
to
other
consumers
contemplating
similar
purchasing
habits.
Thus,
UGC
can
influence
a
new
user
to
make
a
certain
purchasing
decision.
This
project
aims
to
understand
such
UGC
and
how
to
implement
and
optimize
it
for
a
potential
ICE
client.
A
concrete
definition
of
UGC
has
been
debated
by
many
researches
like
myself,
but
the
Organization
for
Economic
Co-­‐
operation
and
Development
(OECD)
has
proposed
three
main
characteristics:
i)
content
made
publicly
available
over
the
Internet
ii)
reflects
a
certain
amount
of
creative
effort
iii)
is
created
outside
of
professional
routines
and
practices2
While
UGC
exists
free
of
monetary
or
advertising
incentives,
many
may
question
why
it
exists
in
the
first
place.
THE
OECD
has
also
answered
this
question,
as
they
define
motivation
factors
to
“include
connecting
with
peers,
achieving
a
certain
level
of
fame,
notoriety
of
prestige,
and
self-­‐expression.”3
The
people
who
post
UGC
were
once
end
users
of
the
particular
product
or
brand
to
which
the
subject
of
their
media
is.
Their
1
Krumm,
John;
Davies,
Nigel;
Narayanaswami,
Chandra;
,
"User-­‐Generated
Content,"
Pervasive
Computing,
IEEE
,
vol.7,
no.4,
pp.10-­‐11,
Oct.-­‐Dec.
2008
doi:
10.1109/MPRV.2008.85.
URL:
http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=4653465&isnum
ber=4653458
2
“Participative
Web:
User-­‐Created
Content.”
Organisation
for
Economic
Co-­‐
operation
and
Development.
12
April
2007.
pp.
1-­‐74.
http://www.oecd.org/dataoecd/57/14/38393115.pdf.
3
OECD,
pp.4
7

8. reasons
for
posting
such
media
vary
greatly.
However,
understanding
these
incentives
can
allow
a
brand
or
retail
entity
to
optimize
positive
UGC
and
enable
its’
existence.
While
the
producer
of
UGC
is
most
often
a
common
end
user
with
a
miniscule
digital
presence,
such
producers
can
also
be
end
users
with
an
established
audience.
The
“well-­‐connected
homemaker,
or
the
hobbyist
blogger,
or
anyone
else
with
a
defined
passion
and
a
basic
command
of
social
media
publishing
can
amass
a
real
audience
and
can
exert
real
influence
within
it”.4
Clearly,
the
majority
of
UGC
that
will
have
an
economic
impact
on
a
retailer
is
going
to
be
a
social
media
platform.
While
UGC
exists
in
a
wide
variety
of
forms,
social
media
is
a
key
platform
in
which
persuasive
UGC
exists,
effects
purchasing
habits,
and
can
me
measure
and
understood.
For
these
reasons
it
is
a
key
focus
of
the
economic
impact
UGC
can
have.
B.
UGC:
An
Economic
Phenomenon
Once
ICE
understands
the
existence
and
producers
of
UGC,
we
will
have
to
show
our
clients
the
economic
impact
UGC
can
have.
The
statistics
below
show
the
value
of
UGC
and
its
influence
on
purchasing
decisions.
Such
information
will
be
communicated
to
ICE
clients
wishing
to
generate
sales
leads
through
understanding
and
implementing
UGC.
• More than half (55%) of consumers report that a product with a high rating
will increase their likelihood of purchasing.5
• Nearly two-thirds of consumers (61%) use search engines to help them in
their product research decisions leading up to purchase.6
• Three-­‐quarters
(75%)
of
young
people
(18-­‐26)
use
recommendations
on
social
sites
to
help
them
research
products
prior
to
purchase.7
The
following
statistics
have
been
cited
from
several
different
resources
from
Power
Reviews8
• 97%
of
UK
consumers
are
willing
to
trust
online
reviews,
and
over
two
thirds
rated
product
ratings
and
reviews
as
the
most
helpful
feature
when
researching
products
to
buy
online
or
on
the
high
street.
• 75%
of
the
reviews
posted
on
review
websites
are
positive.
4
Evans,
Dave.
(2010).
Social
Media
Marketing
:
The
Next
Generation
of
Business
Engagement.
Hoboken,
NJ:
Sybex.
pp.
140.
5
Tornquist,
Stefan,
and
Jake
Hird.
“How
We
Shop
in
2010:
Habits
and
Motivations
of
Consumers.”
Econsultancy.
18
April
2012.
Online.
July
2010.
http://econsultancy.com/us/reports/habits-­‐and-­‐motivations-­‐of-­‐consumers.
6
Tornquist,
1.
7
Tornquist,
1.
8
“Social
Commerce
Stats.”
Power
Reviews.
18
April
2012.
Online.
2000-­‐2012.
http://www.powerreviews.com/resources/social-­‐commerce-­‐stats.
8

9. • 92.5%
of
adults
said
they
regularly
or
occasionally
research
products
online
before
buying
them
in
a
store.
• According
to
a
survey
of
2,445
US
online
consumers,
82%
considered
user-­‐
generated
reviews
“extremely
valuable
or
valuable.”
• Customer
Reviews
have
a
15%
increase
in
product
page
views
within
30
days.
• The
number
of
user-­‐generated
content
creators
will
grow
by
similar
proportions,
reaching
114.5
million
in
2013,
up
from
82.5
million
in
2008.
That
will
translate
to
51.8%
of
US
Internet
users
in
2013,
up
from
42.8%
in
2008.
• Facebook,
blogs,
Twitter
and
customer
reviews
are
considered
the
most
effective
tactics
for
mobilizing
consumers
to
talk
up
products
online.
• About
one
in
five
(24%)
of
all
American
adults
have
commented
on
or
reviewed
a
purchase
online.
• Close
to
83%
of
online
shoppers
admitted
that
product
reviews
submitted
by
users
on
different
websites
are
one
of
the
main
influences
on
their
purchase
decision.
• Traffic
to
the
top
10
review
sites
grew
on
average
158%
[in
2009].
• By
2013,
half
of
retail
transactions
will
take
place
online
or
be
influenced
by
what
consumers
see
on
the
web.
• Consumers
are
67%
more
likely
to
buy
from
the
brands
they
follow
on
Twitter.
figure
1.0
reveals
that
consumers
of
all
ages
are
participating
in
user
generated
content.9
The
statistics
above
reflect
the
importance
of
UGC.
Online
product
reviews,
conversation
about
products
or
a
brand
on
social
media,
and
comments
about
products
on
blogs
and
review
websites
are
all
forms
of
UGC
that
are
highly
influential
in
a
9
McCarthy,
Pat.
“Social
Data:
The
New
Currency.”
Word
of
Mouth
Association.
16
January
2012.
Online.
http://womma.org/researchdigest/?tag=online-­‐retail.
9

10. consumer’s
purchasing
behavior.
While
the
majority
of
the
above
statistics
are
cited
from
Power
Reviews,
the
original
data
came
from
credible
sources
such
as
Econsultancy,
Pew
Internet
&
American
Life
Project,
Forrester
Research,
The
National
Retail
Federation,
GSI
Commerce
International,
ABI
Research,
and
Lightspeed
Research
among
several
other
sources.
Realizing
this
impact
of
these
UGC
platforms
and
communicating
it
to
our
clients
will
be
key
in
helping
them
adapt
to
the
new
climate
of
marketing.
It
is
clear
that
UGC
does
have
an
economic
impact
and
can
ultimately
boost
sales.
C.
Roadmap
to
generate
positive
UGC
“Social
media
begins
with
an
understanding
of
what
consumers
and
influencers
are
saying
about
your
brand,
product,
or
service
and
then
builds
on
that
through
participation
(yours
and
theirs)
for
the
purpose
of
encouraging
higher
forms
of
engagement,
up
to
and
including
collaboration.”10
Social
Media
should
be
the
first
focus
for
our
clients
in
finding
the
economic
power
of
UGC.
Rather
than
directly
advertising
to
consumers
persuading
them
to
purchase
your
product,
our
clients
should
be
engaging
with
our
current
consumers
and
participating
in
areas
of
UGC
in
which
our
brand
or
product
already
is
conversed
about.
This
way,
the
client
becomes
a
participatory
element
in
an
environment
where
their
potential
consumer
already
exists.
How
do
clients
communicate
on
UGC
platforms?
Consumer


Business
Consumer


Consumer
Consumer


Employees
1.
Facebook
• Create
a
business
page
on
facebook
• Focus
on
generation
of
“likes”
(this
allows
for
consumers
to
trust
your
brand)
o Platforms
such
as
PowerReviews
allow
consumers
to
verify
their
review
by
like
the
brand’s
facebook
page.
This
should
be
our
clients!11
2.
Twitter
ICE
clients
must
first
listen
to
relative
UGC
on
twitter,
and
participate
or
respond
to
these
already
present
conversations.
Platforms,
such
as
Hootsuite
can
be
used
to
monitor
key
words
relative
to
our
client’s
brand
or
product.
Monitoring
and
engaging
in
conversation
that
is
relevant
to
the
clients
brand
will
build
a
larger
consumer
following
and
generate
direct
consumer
engagement
that
will
lead
to
sales
conversions.
3.
Allow
UGC
to
naturally
boost
your
SEO
10
Dave,
166.
11
Kirkpatrick,
David.
Marketing
Sherpa.
18
April
2012.
Online.
13
June
2011.
http://www.marketingsherpa.com/article.php?ident=31808#.
10

11. New
content
on
a
clients
website
or
social
media
platform
will
allow
for
their
sites
to
rank
more
efficiently
in
google
searches,
as
the
algorithm
favors
websites
with
constant
new
content.
A
boost
in
SEO
is
a
natural
byproduct
of
constant
engagement
with
users.
Engaging
with
the
consumer
is
key.
If
applicable,
implement
a
Q&A
area
in
which
consumers
can
ask
your
brand
questions
about
a
product
and
you
can
respond
quickly.
Such
engagement
may
be
achieved
through
twitter.
Answer
consumer
questions
will
reduce
return
rates,
build
brand
loyalty,
and
increase
conversions
(while
naturally
boosting
SEO).
4.
Consumer
Product
Reviews
“Product
reviews
are
the
most
searched
for
mobile
shopping
content,
and
an
e-­‐
commerce
site
with
strong
social
media
integration
-­‐-­‐
such
as
utilizing
the
Facebook
"like"
button
-­‐-­‐
allows
consumers
to
generate
content
and
immediately
publish
that
unique
content
throughout
the
Web
on
the
e-­‐commerce
site
itself,
Facebook,
Twitter
and
other
social
media
platforms.”12
12
Kirkpatrick
11

12. References
Evans,
Dave.
(2010).
Social
Media
Marketing
:
The
Next
Generation
of
Business
Engagement.
Hoboken,
NJ:
Sybex.
Kirkpatrick,
David.
Marketing
Sherpa.
18
April
2012.
Online.
13
June
2011.
http://www.marketingsherpa.com/article.php?ident=31808#.
Krumm,
John;
Davies,
Nigel;
Narayanaswami,
Chandra;
,
"User-­‐Generated
Content,"
Pervasive
Computing,
IEEE
,
vol.7,
no.4,
pp.10-­‐11,
Oct.-­‐Dec.
2008
doi:
10.1109/MPRV.2008.85.
URL:
http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=
&arnumber=4653465&isnumber=4653458.
McCarthy,
Pat.
“Social
Data:
The
New
Currency.”
Word
of
Mouth
Association.
16
January
2012.
Online.
http://womma.org/researchdigest/?tag=online-­‐retail.
“Participative
Web:
User-­‐Created
Content.”
Organisation
for
Economic
Co-­‐operation
and
Development.
12
April
2007.
http://www.oecd.org/dataoecd/57/14/38393115.pdf.
“Social
Commerce
Stats.”
Power
Reviews.
18
April
2012.
Online.
2000-­‐2012.
http://www.powerreviews.com/resources/social-­‐commerce-­‐stats.
Tornquist,
Stefan,
and
Jake
Hird.
“How
We
Shop
in
2010:
Habits
and
Motivations
of
Consumers.”
Econsultancy.
18
April
2012.
Online.
July
2010.
http://econsultancy.com/us/reports/habits-­‐and-­‐motivations-­‐of-­‐consumers.
12