KEY POINTS:
Senior analyst Tony Boyte answers questions about Nielsen Online's Consumer Generated Media report.
What is consumer-generated media?
It is the practice of citizens digitally publishing and distributing all forms of content, such as blogs, photos, videos, journals over the internet.
What kind of challenge does it present to business?
The key challenge to business is the lack of control over content being created by consumers, which could affect their brands. By its nature, CGM is an unpredictable medium and companies are dealing with increasingly sophisticated consumers who are cautious of being marketed to and who like to remain in control. The real opportunity for business lies in tapping into these consumers by engaging them and using the power of CGM to their advantage.
How will traditional media change as a result of this?
CGM is revolutionising the way consumers interact, communicate, create and nurture personal and professional relationships, and entertain themselves. This has implications for traditional media, most significantly in terms of how much share of consumers' time CGM gleans from traditional media channels. For example, we're already seeing the introduction of blogs on to mainstream news websites.
How can business take advantage of the CGM movement?
With the growth of CGM comes new opportunities to profit from consumer-generated content and consumption, new online advertising platforms, new means of creating word-of-mouth marketing, and new forums for consumers to share views on products. As a growing number of consumers uptake these online activities, organisations can tap into the channel to increase awareness and sales.
How is CGM changing? Is it consolidating into just a few sites or fragmenting into many smaller ones?
Growth in sites has been strong in recent years. Sites such as YouTube, Facebook and Flickr have enjoyed international growth of about 70 to 80 per cent in the past 12 months. We're expecting to see a continued increase in online profile creation, but the real growth is expected to be around activities such as blog creation and video upload. As far as growth of sites, we are seeing a typical scenario in a high-growth market of many smaller niche sites entering as start-ups. We imagine that, as the market matures over the next few years, consolidation will occur. Of course, CGM-dedicated sites are attracting the purchasing attention of traditional major players in the web industry.
How can a business improve its reputation or profile on these sites?
Many organisations are using CGM activities as marketing tools. Encouraging two-way communication has benefits, but businesses should also be aware of pitfalls if they do not market to the right audience in a CGM environment.
How does consumer behaviour change as a result of using CGM?
Our research has found that consumers feel comments and feedback from other consumers are relevant to information requirements. Nearly half of New Zealanders tell us comments from other consumers have a major impact on purchase decisions.
What kind of person is more likely to be using CGM sites?
CGM activities are most likely to be undertaken by under-35 males. But CGM is becoming a mainstream activity and, in the area of social networking in particular, we're expecting to see a surge in female uptake in the coming months.
