Merchant Innovation

Report: Brands Are Sitting On A Goldmine — UGC

Are brands and retailers sitting on an extremely low-cost, extraordinarily effective way to engage with consumers that they are not fully taking advantage of?

Yep, that’s what a new study by L2, a New York-based digital intelligence firm, sure seems to indicate.

Although the study is primarily centered around the luxury hotel market, L2’s findings can easily be extrapolated across other industries and sectors and offers retailers and brands some pretty quantifiable numbers on how consumers view, share and interact with user-generated content (UGC) when it comes to social media.

“With 97 percent of millennials posting on social media to share experiences with friends while traveling and 40 percent relying on user-generated content to inform their travel plans, luxury hotel brands can no longer ignore this marketing tool,” according to L2’s report. “Additionally, brand engagement rises by 28 percent when consumers are exposed to both professional content and UGC.”

The study found that brands that integrated UGC into their Instagram accounts saw nearly six times as many interactions per post compared to brands that did not use UGC, while brands that sourced more than half of their posts from UGC saw 2.6 times higher engagement than those that did not.

Many brands already seem to be realizing the relative importance of UGC, as integration of this type of content has more than tripled to 14 percent on brand pages since 2014.

Perhaps, at least in the luxury hotel industry, no brand better realizes and capitalizes on the importance of UGC like Four Seasons. L2 said that Four Seasons “excels” at incentivizing guests to share their content on social media, citing the brand’s Focus On Four Seasons Instagram contest that encouraged guests to submit their photos at various Four Seasons hotels on Instagram using #FocusFSChallenge to be entered into a contest to win a six-day vacation at two different Four Seasons locations.

According to the study, Four Seasons' deft use of incentives and rewards to have its customers “participate” in UGC generation squarely puts them at the top of the food chain when it comes to Instagram interactions among luxury hotel brands. In 2015, Four Seasons saw seven times as many interactions on Instagram as the average for luxury hotel brands, which resulted in 15 percent of the total Instagram interactions registered by the entire index last year.

L2’s study found that UGC that brands integrated into the online purchasing path, such as embedding purchasing links directly in or next to content, increased conversions by 10 percent. W Hotels was a standout in this sector by embedding a large, red “Book Now” button on the overlay image that pops up when an image is clicked.

Social campaigns that partnered with UGC in 2016 saw a 50 percent boost in engagement. Realizing this, many brands have begun to partner with “influencers” who are more renowned and have larger followings than they do on social media.

For example, according to L2’s study, Le Méridien saw success when it forged a partnership with renowned photographer Gray Malin to initially develop a multi-platform global art collaboration, which was first incorporated across Le Méridien’s hotels worldwide and social media channels, and then extended to fans through the #FollowGrayContest that encouraged guests of the hotel to post their own photos on Instagram and then follow @LeMeridienHotels and @GrayMalin to be entered for the opportunity to win 250,000 Starwood Hotels Starpoints.

Since Malin’s Instagram followers were about 5.5 times that of Le Méridien, the campaign increased the hotel brand’s follower count by 31 percent and generated 8.8 million impressions.

Hyatt Regency also recently saw a 105 percent increase in its social media engagement after it partnered with Comedy Central to sponsor the New York Comedy Festival. Hyatt developed a video series with comedian Iliza Shlesinger that solicited guests to post their best “not at home” moments on Snapchat to win tickets to one of Shlesinger’s shows.

It seems that more and more brands are starting to realize the low-lift/high-yield nature of UGC, and strategies they develop in the future to capitalize on it will be well worth watching out for.

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