August 17, 2008

Once, long, long ago, advertisers only had to worry what was on the facing page.

YouTube educated the mass market about authoring and sharing user-generated content (UGC), and now advertisers are catching on, too.

One of the first global revenue forecasts for mobile UGC, from Juniper Research, projected that mobile UGC will generate $5.7 billion worldwide in 2012, up from $576 million in 2007.

Later research by ARCchart raised the estimate for mobile UGC to $6.6 billion worldwide in 2012, up from $700 million in 2007.

Clearly, mobile UGC spending is growing. But advertisers still face challenges in reaching consumers in highly personalized—and often unpredictable—UGC settings.

"At first glance, combining the viral characteristics of UGC with the targeting capabilities of mobile should provide a powerful marketing opportunity," says John du Pre Gauntt, senior analyst at eMarketer and author of the new report, Mobile User-Generated Content: Marketing 101. "However, mobile UGC does not easily lend itself to display banners, text links or other traditional ad units."

He adds, "Trying to shoehorn an advertising message that might not be precisely aligned with the ongoing consumer conversation is worse than rude—it is ineffective."

Nevertheless, smart marketers are beginning to address the distinct mobile UGC environment through contests, branded tools and other forms of digital collateral that add value to consumers' creative and distribution efforts.

"The two most important mobile UGC categories for advertisers to consider in the near term are social networking and multimedia authoring/sharing," says Mr. Gauntt.

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