Influence Marketing and User Generated Content: Growth Drivers of E-commerce

​Influence marketing and user-generated content (UGC) are two of the most extensively explored axes within brands. Both markets have evolved in recent years, leading to new customer acquisition opportunities. For instance, we have moved from a few prominent influencers to a multitude of influencers across various domains, each with varying community sizes. From simple UGC to UGC Ads, the landscape has transformed.

The power of community and word-of-mouth has never been more critical in establishing a lasting brand presence: enhancing brand awareness, building trust, and positively impacting sales. Let’s take an overview of these practices and, more importantly, how the gift card becomes a strategic tool in this context.

Influence Marketing and Influencers in E-commerce

Definition of Influence Marketing

Influence marketing is a technique used to promote a brand or its products through an influencer. An influencer is an individual who has built their own community on social media and has the ability, due to their status, to influence or drive specific consumer behavior by giving their opinion. They are compensated by the brand for their actions.

There are four types of influencers based on the size of their community:

• Nano-influencers (community < 10,000 followers) have a small but highly engaged community. They are particularly attractive to small brands looking for a good engagement rate at a reasonable price.
• Micro-influencers (community < 50,000 followers) also have an engaged community and are appealing to small and medium-sized brands.
• Macro-influencers (community < 500,000 followers) have a very large community, but not necessarily highly engaged or qualified.
• Mega-influencers (community > 500,000 followers) are usually celebrities or athletes, with significant reach but low engagement rates and high costs.

Impacts on ecommerce

Influence marketing allows brands to gain visibility and drive sales. In 2022, brands worldwide invested over $15 billion in influence marketing, compared to just $6.6 billion in 2019. The return on investment is 11 times higher than traditional advertising. Notably, 56% of internet users made a purchase after seeing an influencer talk about a product.
It’s no surprise that 74% of brands have launched at least one influence marketing campaign in the past two years.

Choosing the Right Influencers

For campaigns to be effective and yield a positive ROI, it is crucial to carefully select the influencers and, consequently, the right community. The community should, of course, align with the target audience, but that’s not all. The brand’s values must be consistent with the influencer’s image and the values of their community.
Examining the influencer’s previous collaborations is also valuable. Have they been successful? If the goal is brand awareness, impressions will be an important metric to verify. For acquisition objectives, engagement rates are crucial.
Moreover, it is essential to beware of fake influencers. On average, $200 million is lost annually due to fake influencers who artificially inflate their communities. To avoid falling into this trap, taking the time to analyze the community is necessary.

User-Generated Content (UGC) Reinvents Itself

Definition of User-Generated Content

User-generated content refers to content created by users and customers about a brand or its products on the internet. It can be reviews or ratings left on e-commerce sites or other platforms. It can be comments, shares, or likes on the brand’s social media posts. It can also include posts on social media, forums, articles, photos, videos, unboxing, hauls, or tutorials. In essence, there are numerous formats available for e-commerce and retail to target the right format and have authentic content throughout the customer journey.

Impacts on Brands and Retailers

The main advantage compared to influencers is the guarantee of authenticity. Users or customers, not being paid or approached by the brand, are free to provide feedback and share their content.
UGC allows 58% of brands that have implemented strategies to promote it to increase their credibility, and 54% report higher revenues as well.
Moreover, UGC is a crucial part of the purchase journey. 60% of buyers read at least three reviews before making a purchase, and for 94% of internet users, a positive review influences their buying decision.

User-Generated Content Ads

User-generated content is evolving, and specialized platforms are emerging. Brands are taking more and more initiatives to encourage users to leave reviews or photos, such as offering a discount coupon or financial compensation. A market is forming, and UGC is becoming UGC Ads. UGC-like content is also emerging. These are scripted UGC that gives the illusion of being a user-generated video.
The question of authenticity arises as compensation comes into play. Similarly, the line between influencers and UGC is blurring, making the distinction less clear.

Difference Between Influencer Marketing and UGC Ads

The difference between influencer marketing and UGC ads lies in the fact that the user of UGC may not necessarily have a community. They freely share their experience with the product after using it. The user is an expert who has already used the product. In contrast, influencers have a more global expertise, for example, in a particular sector.

Compensation or Motivation: The Key to a Successful Campaign

Compensation and Motivation

Compensation is the primary source of motivation for both influencers and UGC Ads creators. It serves as a reward for the time, energy, and resources they invest in creating content and building their online communities. For users or customers, compensation is a way of saying thank you. Brands acknowledge the value of their content and encourage them to continue sharing their experiences.
For influencers, compensation varies based on the size of their community or the number of active subscribers. It can be fixed or variable. In the case of variable compensation, factors like engagement rate and the number of impressions may be considered. It can also take the form of commissions on sales.
Ultimately, compensation creates an environment conducive to producing quality content and fostering trust between brands and their audience.

The Power of Gift Cards as a Means of Compensation and Motivation

Instead of providing simple financial compensation, such as depositing money into an account, some brands use gift cards. Why?
Gift cards represent the brand and its entire offering. They are a form of branded currency—a reward appreciated by everyone, especially influencers.
Gift cards foster long-term relationships with influencers or users/customers. Instead of transferring money to an account, a gift card invites the recipient to shop at the brand’s stores. For long-term relationships, brands can create stimulating loyalty programs.
Through gift cards, brands gain valuable information about spending habits—when, where, and which products are purchased—enriching their relationships. This sets in motion a virtuous and coherent cycle where users and influencers create content around the brand while trying or using the products, making the content more authentic.

Mechanisms of remuneration or motivation with gift cards

Using a gift card to compensate influencers: a great way to engage influencers with the brand. Instead of sending a product, the brand can offer the influencer the choice to shop on the website with an endowed gift card. This allows them to explore the entire catalog and the brand’s universe, resulting in more profound content creation.

Using a gift card for influencer contests: This is a technique often used by brands with nano or micro-influencers. Rather than compensating the influencer directly, the brand proposes engaging their community by organizing a contest where a brand gift card can be won. The brand gains visibility, and the reach is amplified as winners share their positive experiences and rewards on social media.

Contests to promote User Generated Content (UGC): Encouraging customers to share positive experiences through contests is an effective method. The rule for participation is to create content related to the brand, and the winner receives a gift card. The interest of the contest lies in participants sharing it with their friends, expanding the audience.

Using a gift card to incentivize UGC: Implementing a system to reward customers who share their reviews. For example, offering a €5 gift card after posting a review on the website. The gift card can be spent on the site for a future purchase, strengthening customer loyalty to the brand.

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The use of gift cards in influencer marketing campaigns offers numerous advantages for brands. It provides a means to reward and motivate influencers, encourage participation from subscribers and followers, and enhance brand visibility. By offering a gift card, brands create attractive incentives for key players in their influencer campaigns, thereby strengthening engagement and loyalty towards the brand.