Peak UGC: are we there yet?
Big brands are twitchy on user-generated content. UGC creators cranky. Governments crankier. Pressure's building. Big advertisers like P&G, Unilever and Diageo are reweighting their tolerance to user-generated content - for brand and societal risk (the latter is new). Meanwhile, policymakers and regulators the world over, once benign and awestruck, are aggressively stating intent to restrain the platforms.
Are we entering the early phase of a fundamental reshaping of UGC and what does it mean for brands? It's a phenomenon that has delivered huge advantages to marketers: UGC reduced paid media costs in online's long tail to an all new baseline and delivered unprecedented user profiling and targeting data because of UGC's direct links to the powerful capabilities of tech platforms.
A year ago, the idea that teens might be outlawed from using the Open Web and social platforms, similar to alcohol, tobacco and gambling, was barely credible. Today it's a valid point of debate. So what becomes? Read on - and contribute to an intelligent conversation in our comment thread below.
You need to know this:
- Procter & Gamble's chief brand officer Marc Pritchard said this month: "The problem is many of the platforms were not originally built for advertising. They were built for social communication and freedom of expression. Far too much of the intellectual firepower of our industry is being spent on fixing problems versus focusing on delighting the people we serve".
- Unilever is bringing global, regional and local online publishers and platforms together under a 'Trusted Publishers' network to gain control and visibility over the environments in which its ads are placed.
- Diageo is doing likewise, reducing its long tail of publishers to push for quality in what it calls a 'Trusted Marketplace' which it manages jointly with agencies.
We prefer to work with those who don't allow anonymity to be a weapon ... everyone can have a microphone, it doesn't mean every voice needs to be amplified ... every platform has a responsibility to control their content.
- UGC risks are not lost on Google and YouTube. The Verge this month predicted "The Golden Age of YouTube is Over" - the platform was built on the backs of independent creators but now YouTube is abandoning them for traditional content: "As YouTube battles misinformation catastrophes and discovers news ways people are abusing its system, the company is shifting toward more commercial, advertiser-friendly content at a speed its creator community hasn't seen before".
- YouTube's biggest individual creator, the controversial PewDiePie (~95 million subscribers), announced this month he is exclusively backing DLive as his live streaming platform - it promises far better returns for creators than other major platforms. DLive hands 90.1% of all its subscription and gift revenue directly to creators. YouTube offers circa 50%.
- Governments and regulators have turned hostile towards the two UGC giants that have been bankrolled, almost entirely, by the global advertising industry. The brand safety risk has broadened to societal risk. Advertisers are entwined in the issue - they're being blamed for underwriting and rewarding the arms race to deliver "engagement" and "attention", at the cost of civil discourse and public health.
Our commitment to publishers was that we would invest with the most effective and responsible partners ... we will pay the right price to achieve that outcome. Our Trusted Marketplace approach should be co-owned with our agencies.
- Google, Facebook and Amazon are under unprecedented antitrust, public health and privacy scrutiny.
- The UK Government will pursue legislation which could hold both social media executives personally liable for harmful content distributed on their platforms and any website that "allows users to share or discover user-generated content, or interact with each other online". Read that again.
- Public health concerns around screen and technology usage could see social media and/or the open web outlawed for under 16 year-olds, in a similar vein to age restrictions on alcohol and tobacco.
- Democrat darling and a probable future US presidential candidate Alexandria Ocasio-Cortez (AOC) has publicly pulled her Facebook account citing public health risks: "I actually think that social media poses a public health risk to everybody. There are amplified impacts for young people … it has effects on everybody: increased isolation, depression, anxiety, addiction, escapism."
- Another Democrat who's confirmed she's running for Presidential nomination, Elizabeth Warren, set Washington DC and Silicon Valley alight with her declaration last month on Medium that "It's time to break up Amazon, Google and Facebook".
YouTube spent years chasing one business goal above others: engagement. Corporate leadership was unable or unwilling to act on internal alarms for fear of throttling engagement.
- Republicans and Democrats in the US are both hunting. Senators Deb Fisher (Republican, Nebraska) and Mark Warner (Democrat, Virginia) introduced bipartisan legislation this month to ban "manipulative dark patterns" designed by tech companies "to trick users into giving up their personal data". Google's former lead design ethicist, Tristan Harris, has been a lead advisor on the legislation.
- Much focus is on Facebook but YouTube execs are also in a pickle: they ignored warnings, letting toxic videos run rampant and proposals to change recommendations and curb conspiracies were sacrificed for engagement - a metric rewarded by advertisers.
- Venture capitalists accuse big tech platforms of killing innovation and competition from start-ups. VCs now discount companies that rely on a digital platform to reach their markets.
"In their scramble for growth at all costs …[platforms] use these measures to offer false choices that ... trap users into over-sharing personal information or drive compulsive use – especially for the most vulnerable, including kids."
Widespread antitrust debate is underway about breaking Big Tech into bits. In the US, that happened most notably in 1982 to the US telco monopoly AT&T and its Bell System. Seven independent regional operators were formed from AT&T, known as the “Baby Bells” but it took eight years for the US Department of Justice to win its antitrust lawsuit against AT&T (1974-1982).
Pressure continues to build elsewhere. The EU last month fined Google another €1.5bn after a competition probe, taking the tally to €8.2bn in antitrust fines imposed on the company by the EU in less than two years.
Antitrust measures are not the platforms’ only worries.
YouTube started with indie creators – and piracy. Content and IP holders have been fighting platforms for a decade to address rampant piracy to no avail, as "platform" status allows these companies to side-step copyright laws others can't. But the EU just knocked the piracy-copyright exemption enjoyed by platforms out of the park. The European Parliament this month voted for the first update of its copyright rules in nearly two decades, coming into force from 2021.
Article 13 of the EU's new law will make sites such as YouTube, Facebook and Twitter legally responsible for user-generated material they host across the EU. It also requires all platforms to take down material that breaks intellectual property rules and take out licences with rights-holders to show their IP.
Article 11 of the new law also means services like Google News will need to negotiate licenses with publishers and newspapers to show short "snippets" of text.
It's part of a long-brewing conflict between how creators view YouTube and how YouTube positions itself to advertisers and the press...creators who have found the most success playing into the platform's algorithms have all demonstrated profound errors in judgement, turning themselves into cultural villains instead of YouTube's most cherished assets.
Mi3 Takeout:
Whatever your views on the future of cheap reach and the long tail of UGC, industry is at a juncture it's not navigated before. Brands relied on the tech platforms and other data operatives to deliver granular, personal user data to better target and get closer to those personalised, relevant messages that many marketers believe is the Holy Grail. It transpired primarily through the tech platforms' trojan horse of UGC and the surreptitious techniques to accumulate user data.
All of that is under threat.
But let's quote the thoughts of a senior Australian media agency leader on this:
The industry has a bigger problem than replacing cheap reach; it's about future customer access. Clients are realising they own very little of "their" data. It's either Google, Adobe, Facebook, the agency or a third party. We meet many clients who can't even access their own search accounts.
"Cheap reach," he says "is disappearing because social media publishers can't sidestep the costs of regulation and quality control anymore. Advertisers will replace this with existing and emerging channels. But, in my opinion, the industry has a bigger problem than replacing cheap reach; it's about future customer access.
"As data regulations tighten and consumers gain more awareness of who is doing what, the future becomes more problematic. Clients are realising they own very little of "their" data. It's either Google, Adobe, Facebook, the agency or a third party. We meet many clients who can't even access their own search accounts. This leads to a hard push by client marketing departments to build data infrastructure and fill it in a way that customers will view as responsible.
"But as many big brands take data ownership, they will need to be wary of the side effects. Being the controller, to use a GDPR term, is a tightrope for a marketer. Ultimately many firms need to look at social media publishers and spend some serious time thinking about customer data - not just what they can do but what they should do for long-term sustainable growth."
Pretty much nails it.
We'll have more on the risks to marketers becoming "data controllers" in a coming edition. It quite literally could bust your data pipes.
A final thought: as many UGC operatives look to professional content producers to prime their platforms with less divisive, regulatory and advertiser-friendly content, brands will need to accept higher advertising costs (although it could lead to better results if coupled with lower ad loads). Professional content producers, on the other hand, will need to remain vigilant on the price they extract for their content from the masterfully alluring platforms. Metrics like "incremental" or "off-platform audience reach" is vanity without adequate margin. Professional content costs more to produce. Period.
Want more? Here's some smart takes:
...or contribute to the debate via the comments section below
- Julia Alexander, The Verge
"YouTube relies on creators to differentiate itself from streaming services like Netflix and Hulu, it tells creators it wants to promote their original content and it hosts conferences dedicated to bettering the creator community. Those same creators often feel abandoned and confused about why their videos are buried in search results, don't appear on the trending page or are being quietly demonetised. At the same time, YouTube's pitch decks to advertisers increasingly seem to feature videos from household celebrity names, not creative amateurs. And the creators who have found the most success playing into the platform's algorithms have all demonstrated profound errors in judgement, turning themselves into cultural villains instead of YouTube's most cherished assets."
- Marc Pritchard, P&G
"We've all had a hand in monetising them [tech platforms] and we've all been trying to retrofit our media and advertising standards for years but it's only partially working. Rather than calling for endless retrofitting and clean-up, I'd like to offer a new approach. It's time to invest our brainpower into an ecosystem that builds in quality, civility, transparency, privacy and control from the very start."
"Our Trusted marketplace approach should be co-owned with our agencies. There is definitely more that advertisers and agencies could each be doing in this space, so it's critical to create a team which holds that tension with each other."
- Mark Bergen, Bloomberg News
"YouTube CEO Susan Wojcicki's media behemoth, bent on overtaking television, is estimated to rake in sales of more than $16bn a year...YouTube's problem is that it allows nonsense to flourish. And, in some cases through its powerful artificial intelligence system, it even provides the fuel that lets it spread. Wojcicki and her deputies know this. The company spent years chasing one business goal above others: "Engagement", a measure of the views, time spent and interactions with online videos. Conversations with over twenty people who work at, or recently left, YouTube reveal a corporate leadership unable or unwilling to act on these internal alarms for fear of throttling engagement."
- Connor Friedersdorf, The Atlantic
"Perhaps there's a regulatory middle ground. Here's an idea: Silicon Valley builds a new network specifically for young people - up to say 15. The youth-net is huge and varied, like the internet. But its content must be similar to that of a PG movie. Young people would access the youth-net via a new generation of smartphones and tablets. These new devices would block access to the actual internet. Decisions about content moderation are made with children in mind. Freedom of speech is not paramount."
