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Monetizing UGC: Key Strategies and Mistakes To Avoid

Updated: Oct 12, 2023

Being a business leader or a social media/content manager at your company, you likely understand the value of user-generated content (UGC).


You may have even started to collect it and post it on your social media platforms. But does that mean you are correctly monetizing it?


Monetizing UGC isn't just about gathering and using it. It's a strategic approach that requires a deep understanding of the best ways to take advantage of it.


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This ensures you reap the full benefits from your user-generated content while avoiding potential pitfalls, such as legal issues, copyright infringements, defamation, and violations of user rights.

This article explores the dos and don'ts of monetizing UGC. Our goal is to help you avoid missteps and empower your brand to use the power of high-quality user-generated content effectively. So, let’s begin.


Table of Contents


What does Monetization of UGC mean?


When we talk about "monetizing user-generated content”, it may sound like a high-brow business term, but let's break it down to its simplest form.


Think of UGC as a treasure chest of free opportunities your customers offer you. It's all those Instagram posts, product reviews, tweets, and other content they create about your brand.


Now, the 'monetization' part is about unlocking that chest and finding ways to use these treasures to add value to your business. This value can take different forms depending on your business goals. Here's how:


Sales:


You might use UGC to drive sales directly. For instance, a customer raves about your product on social media, and you share this post on your website.

This authentic testimonial can convince other visitors to buy the product.


Upselling:


UGC can help with upselling too. Let's say you have an online clothing store. A customer shares a photo wearing a dress from your collection, paired with a handbag from their own wardrobe.


You could share this photo and recommend a similar handbag from your range, encouraging customers to add more to their cart.


Revenue:


Some businesses generate revenue by partnering with other brands. For instance, if you run a travel blog and your readers often post about their favorite travel gear, you could strike a deal with the manufacturers of this gear to earn a commission on sales generated from your platform.


Brand Awareness:


For some businesses, the primary aim might be to increase brand awareness. Sharing UGC can help you reach a wider audience, as users often share content they're featured in with their own followers.


This brings new potential customers to your brand, growing your community.


brand awareness

Remember, the key here is to hoard these treasures (UGC) and strategically use them to meet your business objectives. How you monetize UGC should align with your overall business strategy and goals.


It's not a one-size-fits-all approach but a tailored strategy that makes the most of the unique opportunities UGC offers your brand.


The right ways to monetize your user-generated content (UGC)


Capitalizing on the power of user-generated content can yield significant benefits for your business. Here are some effective strategies to ethically and successfully monetize UGC.


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1# Obtain permission


Always ask users directly or establish a clear policy stating that any content shared on your platform can be used for promotional purposes.


Having explicit permission from the content creator before using their content is crucial. This not only builds trust but inspires customers by highlighting authentic content.


Pro tip: Use a UGC platform to simplify obtaining user permissions. It provides an organized system for reaching out to users, tracking responses, and storing permissions.


This ensures all UGC is legally compliant and ready for promotional use, helping build trust and inspire customers with authentic content.


2# Give credit


Tag the original creator when the content is shared. It's often legally required, and it's certainly a good practice.


By acknowledging the efforts of your users, you inspire them to engage more with your brand.


Pro tip: Use a UGC platform to automate the process of attributing credit. This functionality ensures that every shared content is automatically tagged or credited to the original creator.


By doing this, you comply with the law and foster an atmosphere of recognition and respect that encourages further engagement.


3# Set clear guidelines


Establish clear guidelines for the type of UGC you wish to use. These guidelines help steer the narrative and maintain your brand's image. For instance, if you're selling outdoor equipment, you might request photos of your products used in the wilderness.


Pro tip: Utilize UGC platforms to implement these guidelines effectively. They provide tools to filter and moderate user-generated content based on your criteria.


This ensures that only the content that aligns with your brand's guidelines and image is used, showcasing your products in their truest form.


4# Respect privacy


Do not share UGC that may invade the individual's privacy or disclose sensitive information. Always respect user privacy and ensure your content doesn't reveal private or sensitive information.


Pro tip: Leverage UGC platforms to maintain user privacy. They have built-in tools to anonymize data or blur out sensitive information in user-generated content.


They can also ensure that only content that respects user privacy is selected for promotion, thus preventing any potential privacy breaches. This can lead to more positive buying decisions as users trust your commitment to protecting their privacy.


Avoid these mistakes when monetizing your user-generated content (UGC)


content created by user

While UGC holds immense potential for monetization, it's crucial to avoid certain pitfalls.


1# Neglecting to monitor UGC


It's a pitfall to ignore the content that your users are creating. To maintain the integrity and image of your brand, establish a system that regularly monitors user-generated content.


This way, you can prevent the spread of content that may be off-brand, offensive, or harmful to your company's reputation.


Pro tip: Use a UGC platform with built-in moderation and review tools to oversee and approve UGC before it gets linked with your brand or products.


This proactive step ensures that all the content aligns with your brand ethos and maintains a positive user experience.


2# Misrepresenting the original context


Avoid modifying UGC to misrepresent the original message or alter the creator's intention. It's essential to remain transparent and honest with your users.


Think of it as an art curator's task: you wouldn't alter a painting in an exhibit just to make it fit better with the theme. Similarly, you should preserve the 'art' of UGC in its original form.


Pro tip: Utilize a UGC platform to maintain this transparency. These platforms can assist in preserving the original context of the content while allowing for necessary adjustments to align with your brand image. The result? A balance between authenticity and brand synergy.


3# Over-commercializing UGC


Yes, the end goal is monetizing UGC, but authenticity is key. Over-Commercializing user-generated content can strip away its genuine, organic appeal, which is what makes it so influential.


Picture a bustling local farmers' market that suddenly transforms into a sterile, corporate grocery store. The charm and appeal can quickly evaporate; the same can happen with UGC if over-commercialized.


Pro tip: Use a UGC platform to strike the right balance. These platforms can provide insights and analytics to help you understand your audience's preferences and engagement patterns, thus enabling you to monetize UGC effectively without overdoing it.


The platform's ability to incorporate UGC naturally and organically into your brand story can ensure it doesn't lose its appeal and authenticity.


4# Ignoring Negative UGC


Not all UGC will paint your brand positively, and it's a mistake to ignore or attempt to hide negative UGC. Instead, address it in an open, respectful manner.

This can boost your brand's trustworthiness in the eyes of your users.


Pro tip: Use a UGC platform to address and manage negative feedback. Utilizing built-in response management tools, you can tackle negative UGC head-on, turning potential setbacks into growth and brand improvement opportunities.


Monetizing user generated content is a matter of respect and strategy


User-generated content (UGC) can be likened to a borrowed asset from your customers. Just as we endeavor to be respectful and considerate when we're guests in someone's home, we should apply the same principles when utilizing other people's content.


When we respect someone's property, they are more inclined to invite us back. Similarly, when we correctly and ethically use a customer's UGC, they are likely to continue sharing more, which further benefits our brand.


By staying ethical and using a professional UGC platform, you can effectively monetize UGC to boost sales, increase profits, and enhance your brand's reputation, all while maintaining respect for the content's creators.


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