Competing by Participation – a Winning Marketing Tool Nóra Nyirő, Tamás Csordás and Dóra Horváth

7/30/2019 Competing by Participation a Winning Marketing Tool Nra Nyir, Tams Csords and Dra Horvth

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111CM : Communication Management Quarterly : asopis za upravljanje komuniciranjem 21 (2011) 111140 2011 CDC and author(s)

Competing by participation

A winning marketing tool1

Nra Nyir2

Tams Csords

Dra HorvthInstitute of Marketing and Media, Corvinus University of Budapest, Hungary

UDC 659.11 : 316.775.4 : 004.738.5

Summary: In the new media and communications context audiences are moreempowered than ever to make their voices heard. Audiences, consumers are activelyinfuencing the marketing activities o rms and brands. In the new dominant logic omarketing, rms are constrained to engage in complex processes o exchange with theirconsumers. o be able to keep up with the competition and media noise, it is crucialor companies to involve their audiences, potential consumers. Consumer participation

in this context does not end with special attention or the brand, as companies turnedto electronic word-o-mouth and other interactive messages concerning the company.Consumers themselves not only create advertisements and broadcast them in avour oor against organizations, they also create new products via a number o co-creative pro-cedures and they are pushing the organizations to launch new pricing models. Tereorethe scope o user-generated content is rather diverse rom a marketing perspective. Bygenerating an overview o the participation phenomenon in marketing and marketingcommunications literature, this article endeavours to reconcile the related taxonomyused in the business and marketing literature by an extended summary and explanation

o the key terms. Tis will allow us to conclude that the most important central themeo the very diverse literature o audience participation lies in the act that it is inspired,acilitated, established or maintained by the participating corporation as a core element.As such, participating corporations manage to extract a source o additional satisactionand thus an added value that in a long term can be transormed into a competitiveadvantage.

Keywords:participating audiences, user-generated content, marketing value

1 Te authors thank the CM editors and reviewers or helpul comments on various versions o this manuscript.

2 [email protected]


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A winning marketing tool

Nra Nyir,

Tams Csords, Dra Horvth

CM : Communication Management Quarterly : asopis za upravljanje komuniciranjem 21 (2011) 111140 2011 CDC and author(s)

1. Introduction: The marketing response to new

challenges an urge for participation

Marketing language requently uses the shorter term audience when reer-ring to the target audience o a brand, a product, a service, etc. In the traditionalbusiness setting marketers, companies, organizations create the marketing mes-sages, advertisements or their target audiences, in order to persuade, remind orattract them. Briey put, the world o marketing communications worked inthe same way as the general communication ows: the organization controlledthe messages, created the content and the audiences consumed them. Regard-ing advertisements and promotional messages, a common belie is that people

do not appreciate them, and that everyone is trying to avoid them. However,in the present media context, users, audiences, consumers themselves do createadvertisements and broadcast them in avor o (or against) a brand, companyor organization.

Prahalad and Ramaswamy (2004) argue that market value is increasinglyco-created by both the rm and the consumer. Tese two authors highlightthat this new consumer role is noticeable and apparent in a number o ways.Te new consumers have better, larger and quicker access to inormation and

these knowledgeable consumers can make more inormed decisions and inu-ence the decisions o other consumers more strongly. Tey have a global viewabout rms, technologies, prices etc. as well as about other consumers actionsand reactions. Te traditional barriers disappear in the network society and thethematic consumer communities are revolutionizing emerging markets andtransorming established ones. Te power o consumer communities stemsrom their independence rom the rm; consumer networking inverts the clas-sic mass type o marketing communication, making it interactive and demo-

cratic. Consumers may experiment with products and develop new ones thanksto the platorm the internet is providing them with. Activism changes as well,as consumers are able to better discriminate when making buying decisionsand experiences by emboldening each other to act and speak out. Firms are nolonger autonomous product designers, producers and marketing messengers, oa business necessity, they are led to resort to interaction with consumers or co-creation (Prahalad and Ramaswamy, 2004).

At the same time, new media and communications platorms oer a arbroader potential or cooperation between engaged consumers and rms thanever. Complex processes o creative exchange can be initiated between the twoparties, during which individuals become ever more empowered in relation to


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the rms, while they should only be their consumers. Te emergent service-dominant logic o marketing criticizes, not without avail, the traditionalmarketing paradigm o viewing buyers as passive consumers and advocates to

include buyers in the value creation process by involving them in the logics ovalue creation by asserting that the consumer is always a co-creator o value(Vargo and Lusch, 2004). One example o this change is ime Magazines 2006December issue, the ront page celebrating YOU as the person o the year.Te millions o people participating in social network platorms and creatingcontent (Grossman, 2006) are strong indicators o the turnaround in the logico successul marketing thought.

o understand the participation phenomenon and its importance or mar-

keting and business scholarship and practices we have to start rom the under-standing o participation and related notions and concepts in connection withmarketing and business studies. Te aim o this article is rst and oremostto identiy and reconcile key terms in marketing communications literaturerelated to consumerrm exchanges using new media and communicationsplatorms. Ater having examined the cluster o participatory concepts used inmarketing in the rst part, we will discuss the advantages and disadvantages oparticipatory practices in the second part o our article.

2. The concept of participation in marketing

2.1 Activity-focused notions of participation

We can identiy a wide range o concepts that encircle audience participa-tion in marketing or marketing-related (e.g. consumer behaviour, marketing

communications or management) literature. Tis cluster o participatory no-tions includes very dierent concepts that dier at the level o participationrequired (e.g. involvement, prosumer), whether they ocus on the process (con-tribution, co-creation, collective buying) and how the output o the process oparticipation is seen (user-generated content, consumer-generated advertise-ments, viewer-created content, e-word o mouth). All o these notions imply a(power) relation with audiences, which can be seen as the dening componento the phenomenon o participation. In Figure 1 we summarize the most re-

quently used notions relating to the participation phenomenon. Te activity-ocused taxonomy emphasizes the activity o the consumer or the active role o


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the consumer while the output-ocused taxonomy concentrates on the result othe audiences or consumers participation.

Figure 1: Notions o participation in the marketing literature

Activity-ocused notions Output-ocused notions

involvementengagementparticipationprosumption

produsageco-creation

co-creative labourconsumer empowerment

crowdsourcingcontribution

user generated contentconsumer generated adver-

tisementsel-generated advertisements

DIY advertising

viewer created contente-word o mouth

user-led innovation

Notions o participation in the marketing literature show dierent pointso the companyconsumer encounter interace, all ullled through mutualcommunication and resulting in a valuable outcome whether this concerns in-

ormation, new ideas or sharing experience. In the next sections we introducethe participation-related notions one by one, emphasizing the dierences andspecicities o the concepts.

First we discuss the core concepts providing insights and approaches oparticipation, based on consumers action and their role as actors. Followingthat, we discuss the activity-ocused notions in the marketing literature relatedto consumer participation and then the output-ocused notions resulting romthe preceding activities.

Involvement

Kotler et al. (2009: 255) dene consumer involvement as the level o en-gagement and active processing the consumer undertakes in responding to amarketing stimulus. Marketing literature dierentiates products and buyingdecisions as being high or low involvement, and states that high involvementconsumers are more likely to process large amounts o cognitive inormation(Greenwald and Leavitt, 1994). Other consumer researchers consider thatthe essential characteristic o involvement is the level o personal relevance(Celsi and Olson, 1988). Involvement is rst o all linked to the buying pro-


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cess and marketers are exhorted to use dierent marketing strategies in case olow and high involvement products. In marketing communications literature,involvement can be dened as the importance people attach to a product or

buying decision, the extent to which one has to think it over and the levelo perceived risk associated with an inadequate brand choice (De Pelsmackeret al., 2007: 70). Consumer research examines more deeply the involvementphenomenon in marketing. Most agree that involvement reers to consumerssubjective perception o the personal relevance o an object activity or situa-tion, and they emphasize that involvement is a psychological state experiencedby a consumer in a given situation (Peter and Olson, 1990: 85). O course itis important to recognize that people may be involved in many ways. In sum-

mary, the term involvement in marketing is related to the consumerproductrelationship resulting in elt involvement, which is inuenced by intrinsic sel-relevance (consumer and product characteristics) and situational sel-relevance(situational context and product characteristics) (Peter and Olson, 1990: 88).

Engagement

Schultz (2007) redenes marketing as constructive engagement and em-

phasize the importance o a macro-level ocus providing the possibility oconstructive engagement (both political and managerial) ending in long termbenets, win-win outcomes and enhanced marketing systems. Te theory andsubsequent policy o constructive engagement argues or pro-social interac-tions among individuals, groups, rms, communities, and/or countries that areenmeshed in polarized and requently intractable or destructive conicts. In aconstructive engagement, negotiation, cooperation, and exchange are impor-tant components, contrasted with control, consumption and authority.

Marketing communications play an essential role in ostering engagementby providing the means by which brands and organizations are presented totheir audiences. Te goal is to stimulate a dialogue that will, ideally, lead tosuccession o purchase. Complete engagement. (Fill, 2005: 9). It also meansthat marketing communications are an audience-centred activity (Fill, 2005).Other marketing researchers argue or developing a grounded understandingo consumers, considering consumer behaviour with engagement as a necessitywhen developing consumer relationships (CRM) that allow or an ideological

disposition to interactive engagement and learning (Mitussis et al., 2006).O course new media and the internet as a platorm have distinctive ca-

pabilities or customer engagement, including interactivity, enhanced reach,


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persistence, speed, and exibility (Sawhney et al., 2005) and provide a uniqueopportunity or organizations to use these capabilities to engage customers incollaborative co-creation processes. We can see that the engagement concept

includes macro and micro level perspectives as well, and that it has a clear pro-cess and activity ocus rom the side o the rm resulting in a special company-consumer relationship and purchase. Tis is dierent rom involvement whichis an intrinsic psychological eature proper to each consumer.

Participation

From a marketing point o view, the concept o consumer participation

itsel has also been used. In this context it is dened as the degree to whichthe customer is involved in producing and delivering the service (Dabholkar,1990: 484). Extending this construct, Meuter and Bitner (1998, cited in Ben-dapudi and Leone, 2003) distinguish among three types o service production:rm production, joint production, and customer production. Firm produc-tion is a situation in which the product is produced entirely by the rm and itsemployees, with no participation by the customer. Joint production is a situa-tion in which both the customer and the rms contact employees interact and

participate in the production. Customer production is a situation in which theproduct is produced entirely by the customer, with no participation by the rmor its employees. Bendapudi and Leone (2003) provide a chronological reviewo the literature on customer participation in production which shows thatparticipation in production has already appeared in the marketing literature asearly as 1979. It seems that consumer participation is attributed mainly positiveaspects, though a number o studies also imply that it can be a double-edgedsword or rms (e.g. Chan et al., 2010). Consumer participation can enhance

customers economic value attainment and strengthen the relational bond be-tween customers and employees and may increase the stress level o them. Tenotion o participation in marketing and business literature highlights par-ticipation in production processes. However audience or consumer participa-tion may have a wider scope even rom a marketing point o view, includingbrand value building through participatory practices, generating participationthrough communication, as well as building loyalty through participation.

One must note that the concepts o involvement, engagement and partici-

pation are highly interrelated. Te marketing literature oten resorts to usingone in order to dene the other. Te main dierence, as we endeavoured to out-line, is on the ocus and nature o the activity involved. Tus while engagement


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has a process and activity ocus which stems rom a calculated eort o the rm,involvement is more consumer-related and can be one eect o a rms engage-ment activity. A high level o consumer involvement will eventually aect the

mode o consumer participation which thus acts as a measure o success or arms engagement activity.

Prosumption

Te goal o marketers and companies is to sell their products and services topeople rather than perorming these services or themselves (McKnight, 1977),which generates a clear contradiction between marketing and the producing

consumer phenomenon. Tis shiting role o consumers to producers, acilitat-ed by electronic technology, had already been predicted in 1972 by McLuhanand Nevitt (1972: 4). Te term prosumer, a portmanteau ormed by con-tracting either the word proessional or producer with the word consum-er, was introduced by ofer (1980). Trough the new do-it-yoursel pregnan-cy kit in the early 1970s, the rapid diusion o sel-service solutions (rangingrom sel-help movements, to sel-service uel pumps, sel-service supermarkets,electronic banking etc.), the third-wave consumer became independent and

had higher levels o control over their consumption. ofer (1980) suggested auture economy in which leisure time is redened as unpaid work: peoplewill never hold a ull-time job, but spend extensive time producing their owngoods and services with immensely enhanced sel-helping technologies. Heenvisioned a do-it-yoursel economy where the number o consumers declinesas everyone produces more and more things (products) or themselves. Tisconcept was provocative enough to attract the attention rom other authors, in-cluding Philip Kotler (1986). First o all, Kotler criticizes the empirical evidence

used by ofer and adds that i ofer is right then marketers will ace a highlyrustrating uture. In addition, Kotler (1986) states that prosumption activitieswill have to have our main characteristics: high cost saving, requiring minimalskill, consuming little time and eort, and yielding high personal satisaction(e.g. house painting). Marketers have to ocus on those products and serviceswhich do not meet these requirements (e.g. car repairing). Modern computerswill allow people to take part more in designing products as well. Kotler (1986)proposes to look or opportunities in order to acilitate prosumption activities

like creating better tools or prosumers and simpliying the products.We agree with Kotler that very ew people will opt or 100 percent pro-

sumption as they will be more attracted by the hedonist, easier living liestyle


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provided by growing economies and subsequent welare. But more importantlyin this context, Kotler (1986: 512) identies two clear types o prosumers: the

Avid Hobbyist who ll their leisure time with one or a ew dominant hob-

bies and the Archprosumer who practice a liestyle o voluntary simplicitythat is closer to nature and produce many things themselves. He concludesthat marketers should not protect the exchange but acilitate the pursuit o hu-man satisaction and emphasizes that ofers raised some worthwhile issues ormarketers to consider. Even though Kotler analyzed the notion o prosumeras it was used by ofer, we argue that prosumerism may have dierent levelsranging rom ofers view o producing as many products and services as pos-sible, to participating in the production ow as a consumer, and being part o

producing or others as well.Xie et al. (2008) provide a theoretical model o consumers as co-creators o

value through empirical research supporting prosumption. According to theirdenition, prosumption consists o value creation activities undertaken by theconsumer that result in the production o products they eventually consume andthat become their consumption experiences. (Xie et al., 2008: 110). Tis deni-tion is consistent with the notion o value co-creation (Lusch and Vargo, 2006:284), but wider than Dalbhokars (1990) notion o participation, and more inline with Meuter and Bitner (1998, cited in Bendapudi and Leone, 2003).

Produser

Bruns (2009) says that ofers image o the prosumer (1980) still has con-siderable inuence on our understanding o the collaborative processes o con-tent creation. He states that ofers prosumer is clearly not the sel-motivatedcreative originator and developer o new content. According to Bruns (2009),

the terms production and consumption do not correspond well with thecreative and collaborative participation o consumers: In the user communi-ties participating in such orms o content creation, roles as consumers and us-ers have long begun to be inextricably interwoven with those as producer andcreator: users are always already also able to be producers o the shared inor-mation collection, regardless o whether they are aware o that act they havetaken on a new, hybrid role which may be best described as that o a produser(Bruns, 2008). In his produsage model, Bruns (2008) stresses that the tradi-

tional production distribution consumption models include the notion oprosumer as well, whilst maintaining the traditional industrial value chain. Incontrast, in postindustrial or inormational economic models the production o


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ideas takes place in a collaborative, participatory environment, breaking downthe boundaries between producers and consumers. Tis new context enablesall participants to be users as well as producers o inormation and knowledge

requently in a hybrid role where usage is necessarily also productive and par-ticipants become produsers. Te outputs o produsage processes are not discreteproducts but rather quickly developing and growing revisions o exciting con-tent (e.g. Wikipedia).

Contribution

User-contribution systems consist o active and passive types o possible

contribution, providing various types o user input that are valuable or others.Active contribution covers audience or user participation in content creationand social networking. Consumer contributions have clear advantages at thelevel o cost, scalability and competitive advantage (Cook, 2008). Te contribu-tion concept o Cook (2008) is in line with Schultzs (2007) concept o win-winresults o marketing collective engagement. Te motives behind contributionmay be that it is a practical solution providing immediate reward (e.g. accessto extra services), social rewards (being part o community o common inter-

est), reputation, sel-expression or altruism. In Figure 2 we give a summary oconsumer and corporate benets o contribution in dierent processes. We cansee that consumer contribution in dierent company processes results in betterinormation, entertainment, personalization or sense o ownership on the con-sumer side, while the company gains as well through improved satisaction, in-creased loyalty, awareness, engagement or through potential cost eectiveness.

Figure 2: Consumer (user) and company benets through contribution

Consumerservice Marketing Humanresources Capitalinvestment Design &Development Production

Consumers Immediatebetter infor-mation

Info & enter-tainment, senseof community

Empowerment Fine tuned,personalizedservices

Recogni-tion, sense ofownership

Entertain-ment, senseof owner-ship

Company Improvedcustomersatisfaction

Increased aware-ness and loyalty

Employeeengagement

Reduced costof capital,revenue fromsubscriptionservice

Reduced costs Inexpen-sive talents,hugeadvertisingvalue

Source: own summary based on Cook (2008)


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Co-creation

Prahalad and Ramaswamy (2002) mention a connection o co-creation

between consumers and companies, and we have seen that Lusch and Vargo(2006) also use co-creation o value when dening the basics o new market-ing logic. In this consumer-centric view the consumer is an integral part o thevalue creation system. Te consumer may inuence where, when, and howvalue is generated; they need not to respect industry boundaries in the searchor value; they can compete with companies or value extraction; and multiplepoints o exchange can be identied where the consumer and the company canco-create value. Payne et al. (2008) make no distinction between participation

in production or co-production (see Bendapudi and Leone, 2003) and co-cre-ation (Lusch and Vargo, 2006). Tey propose the usage o the latter term andconcept.

Van Dijck and Nieborg (2009) argue that the concept o co-creation andother contemporary notions have to be introduced into mainstream economicdiscourse while one ought to put aside the undierentiated concepts o usersand platorms. Tey claim that rather than deending or attacking the cult(ure)o participation, mass creativity or co-creation, one needs to approach the so-

cio-economic implications o these emerging trends in a more critical way (vanDijk and Nieborg, 2009).

Co-creative labor

Consumers participation has a clear labor aspect as they ensure ree (or verycheap) labor or rms, as erranova (2000) states in her article Free Labour:Producing Culture or the Digital Economy. She argues that there are tensions

and contradictions around participation as being pleasurably embraced and atthe same time oten shamelessly exploited. Te ime article mentioned earlieralso mentions that these activities position creative consumers as working ornothing and beating the pros at their own game (Grossman, 2006). Othersargue that we have to careully consider this topic, how work or labour termsare reshaped and negotiated within the context o emerging co-creative rela-tionship or mutual benet by participants themselves (both proessional andnon-proessional, commercial and non-commercial) (Banks and Deuze, 2009).

We may also cite the notionsplaybourwhich also describes the phenomenon omerging ree time, entertainment activities (play) and work (Kcklich, 2005)as well asgamelabourorun production(Humphreys et al., 2005). Tese new


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orms o cooperation and participation o the consumers provide a new sourceo labor or the rm (not only or prot-oriented companies but also or thepublic, NGO and other non-prot institutions). Tese concepts provide an

understanding o the participation concept rom a workow and labor pointo view and thus clearly identiy the importance o participation in human re-source management as well.

Crowdsourcing

Crowdsourcing relates to labor as well, being a novel orm o outsourcingwhich is well-known and requently used business solution to solve non-core

competence-related unctions o rms. Non-vital, non-regular business unc-tions or one-o tasks, traditionally perormed by an employee, and later out-sourced to a contracted business partner can today be oered to an undened,large group o people or community (a crowd), usually in response to an opencall (Howe, 2006). Crowdsourcing is a process where companies outsource awork or a generally online community and oer payment or anyone withinthe crowd who completes the task the best and astest. Crowdsourcing thusaccentuates the mass participation aspect so that the crowd appears as a par-

ticipatory agent.Te potential or the uture use o crowdsourcing in marketing was identi-

ed in three areas: product development, advertising and promotion, and mar-ket research (Whitla, 2009) while Alberts et al. (2010) argue that crowdsourc-ing is a potential and relevant marketing research tool, however agencies andadvertisers have to use it careully. Brabham (2008) identies the user-generat-ed advertisement as a typical orm o crowdsourcing.

Consumer empowerment

Te literature on consumer empowerment puts the emphasis on consum-ers eorts to regain control o their consumption processes rom suppliers.Suppliers may achieve success by trying hard to empower consumers throughresearching and providing what consumers want. It is claimed here that con-sumers eel empowered when they are able to enjoy the consumption process.

In this view buying is not a simple process o obtaining products but also ex-perience and enjoyment. Providing an agreeable marketing environment andrelevant inormation may be a actor o success due to subsequent consumer


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satisaction and empowerment (Wright et al., 2006). Some results indicate thatconsumer empowerment can be understood as voting by consumption. Tisapproach views consumption as an ethical/political domain where participat-

ing consumers characterize their consumption as empowering. However, itprovokes some tension between consumer power and sustainable living (Shawet al., 2006). Tis interpretation o consumer empowerment was provided byShankar et al. (2006) who question the liberal view o consumers empower-ment and argue that choice is the product o disciplinary power and that moreand more choice can lead to choice paralysis. Foucaults concept o the technol-ogy o the sel allows or a more sophisticated understanding o the uidity o

power relationships between producers and consumers (Shankar et al., 2006).A technology-oriented view and strategy is launched when consumer empow-erment is reected in the development o inormation-based consumer-centricmarketing strategies that seek to enable but also control delegation. Tese kindso marketing strategies are enhancing the amiliarity and use o inormationtechnology by consumers, underlining the uncontrolled nature o the consum-er empowerment process (Pires et al., 2006).

We have seen that the consumer empowerment concept stresses the control

aspect o consumer participation and reveals the signicance o handing overcontrol into the hands o consumers. Consumer empowerment talks about aconscious, active and control-loving consumer who is able to and wants to usethe control and power s/he has gained in the consumption process.

All notions o participation indicate that there is an exchange between thecompany and its consumers or audiences, which is expected to result in somebenecial outcomes that could be a product, an idea or a message. In our pointo view these notions are not dierent, but all ocus on dierent aspects o theinteraction and exchange, whether it is located at the level o the consumer oron that o the market, or whether it ocusses on the production or consump-tion process, or on the level or amount o contribution made by and expectedrom the audience.

In Figure 3 we give a summary o the used terms and their major ocalpoints in relation to processes and outcomes involved, as they were discussedbeore.


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Figure 3: Activity-ocused notions o participation and their scope

Notion Process / Activity Result

Involvement Consumer interest, motivation Successul choice

EngagementConversation / communication/ interaction between companyand consumer

Successul exchange

ParticipationProduction (company andconsumer together; consumer

alone)

Productrelational bond

Prosumption Production by the consumerProducer consumercorporate acilitation

Produsage Productive usageContinuously developing con-tent and meaning

Contribution(Corporate) inputtransormation (by audiences)

Rewards (immediate, social,reputation, sel expression)

Co-creativelabor Working roughly or ree Mutual benets or companyand consumer

Co-creationIntegrated corporate andconsumer creation o value

Mutual values

Consumerempowerment

Consumption processcontrolled by consumers

Consumption as empoweringenjoyment, experience

CrowdsourcingCommunity creation orcorporate call

Content created by community

2.2 Output-focused notions of participation

he output-ocused concepts o participation highlight the result orachievement o participation. In these cases it is not the role or the action oconsumers (or the audience) which relates to the concept o participation, butthe output achieved by them.


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User-generated content (UGC)

UGC stands or user-generated content, and in the majority o cases de-

ploys digital media technologies. Content created by users can correspond toevery traditional type o content, including content accessible via proessionalmedia services (text, image, audio and audiovisual content). UGC is generallylocated in the public domain or under a Creative Commons license, whichoer content creators a simple set o standardized ways to grant copyright per-missions to their creative work (Creative Commons, n.d.)

User-generated content is ubiquitous in e-media and e-marketing, andits rapid growth contributed to creating some o the most successul digital

brands, like Youube or Wikipedia. Audiences are more and more becomingused to consuming content that is generated by ordinary, non-proessional,or amateur people, even more when some UGC starts to resemble proession-ally produced content. Despite UGCs extraordinary growth, advertisers andadvertising agencies still remain hesitant to venture into this unproven context.Teir concerns stem rom a ear o intruding on a consumer environment, alack o understanding o UGC users and their behaviour, and a lack o control

over the context in which their advertising gets exhibited (Clark, 2007 cited byKrishnamurthy and Dou, 2008). Te emerging quantity and consumption oUGC orces academic and market research to provide implications or advertis-ers through a comprehensive analysis o their business models and the interac-tions among key stakeholders (Krishnamurthy and Dou, 2008).

Figure 4: ypology o UGC classication and examples

Psychological Motivation for Engaging in UGC Creation

Rational Emotional

KnowledgeSharing

Advocacy Social connections Self-Expression

Platformbase

GroupWikis(e.g. Wikipedia)

Issue-centriccommunities (e.g.Rachel Ray Suckscommunity)

Multiplayer onlinegames (e.g. Socioown)

Virtual presences(e.g. Second Lie)

Indivi-

dual

Blogs by experts

(e.g. askanexpertblog.com)

Consumer reviews

(e.g. Epinion)

Social networking

sites(e.g. Facebook)

Consumer creative

inventions(e.g. Jumpcut)

Source: Krishnamurthy and Dou, 2008


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Regarding the motivations or creating UGC, the positive attitude towardsUGC and consumption o UGC were ound to have relevant explanatory pow-er (Daugherty et al., 2008). User generated content clearly ocuses on the con-

tent output o consumers participatory production, while it includes all typeso content independently rom the goal and motives o content creation or theorm o the content (text, image, lm, etc.).

Consumer-generated advertisement (CGA)

Consumer-generated advertisements can vary rom modiying elements o

a companys advertising material (e.g. by distorting the meaning, the imagery,etc.) through uploading original variations on a theme o a companys advertis-ing material (e.g. humorous, subvert variations called spoos [i.e. the practice osubvertising]) to proposing original materials in order to, or example, close agap in a companys advertising campaign.

Berthon et al. (2008: 7) dene consumer-generated advertisements as anypublicly disseminated, consumer-generated advertising messages whose subjectis a collectively recognized brand. Tey base their notion on two main deter-

minant actors: subjects and disseminations. Tey argue that even though con-sumers may create ads about almost anything (themselves, their amilies, theirriends, etc.) consumer-generated advertisements have to be specically target-ed at collectively recognized brands. Te nature o a brand as an asset makes theissue o consumer-generated brand ads so critical. Te dissemination is crucialas CGA may aect a brand only i it is collectively disseminated through someorm o media. Figure 5 provides a typology o CGA based on one hand on therelationship towards the ocial brand message (i.e. whether it is assonant ordissonant with it), and on the other, on whether it addresses the brand in ques-tion in a negative or positive way.


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Figure 5: ypes o consumer-generated advertisements

Underlying message about brand

Negative Positive

Nomina

lrelationshipto

ofcial

brandmessage Assonant

Subversive(the surace text is in accord with theocial brand message, but the sub-text o the ad is clearly negative, otenuse parody to subvert and underminethe dominant brand message)

Concordant(surace text and subtext are in accord;nominal text o the ad is in agreementwith that o the brand message, under-lying subtext or message is positive inattitude towards the brand)

Dissonant

Contrarian(clearly o-message and implicitlynegative towards the brand, under-mine, question, or attach a contrarianmeaning to the brand message)

Incongruous(the surace message is dissonant withthat o the ocial brand message, theunderlying text is generally positive to-wards the brand)

Source: own illustration based on Berthon et al., 2008: 14

It is critical or advertisers not only to understand and ollow CGA butalso to do so with any eedback on consumer-generated advertising appear-ing in the orm o ad-hoc comments and discussions on content-hosting sites(Campbell et al., 2011). A lampoon o a brands ad might as well be categorizedas concordant when the message is not necessarily negative and deteriorat-ing, and both the audience and the responding rm might wink and nod, therm accepting a criticism and carrying on with their own brand building. Incase the consumer-generated material is inevitably deteriorating to the rm (i.e.anti-branding), which occurrence is more likely in the case o well renowned

brands (Krishnamurthy and Kucuk, 2009), then the rm should classiy it assubversive and respond accordingly. Contrarian and incongruous types oCGA are less o a direct threat to the rm in the sense that although the messageconveyed is not in accordance with the ocial communication and messageso the rm, it cannot be directly retraced to and tallied with by the audienceand thereore ollows a route on its own as an advertising or anti-advertisingmessage.

Te term sel-generated advertisement is used by Shimp et al. (2007) intheir article examining campaigns which asked consumers to write personaltestimonials about their brand-related experiences. Teir research shows that


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these testimonials positively aect consumers evaluative judgments, but as thetestimonials are motivated by external rewards, participants tend to exaggeratetheir statements.

Te term consumer- or sel-generated advertisement describes a specicsubtype o user-generated content when involved consumers (not simple users)create specic communication materials (advertisements) related to and talk-ing about a brand or product. However, the message and the relation with thebrand is not unequivocally positive and depends on the quality o involvementthe creator o the given content has with the brand in question.

Viewer-created content

Audience-created content has a long tradition in the Western media land-scape, or example, in the USA with the network o public access television, inFrance with its long history o community (or associative) media, or in Ger-many with its open channels. Also in a more business-oriented context, chan-nels exist that make use o viewer-created content and/or involve the audiencesmore directly in their programming structure. Current V was launched in theUSA in 2005 and is a well-know example o a viewer-created content-based(VC2) television channel (see http://current.com/). 30 percent o the programso the independent television channel aired on the web are produced by theconsumers or viewers, who are mainly 18-34 years old. Te programming isbased on short video clip type o content and the channel is paying or the con-sumers i the content produced by them gets broadcasted terrestrial as well. Inaddition, consumers may also participate in the programming structure: basedon the majority-wins principle they can vote or the programs (Jenei, 2008).

For these reasons, channels (be they online and/or ofine) resorting to viewer-created content can also be understood as a subtype o user-generated content.

E-word-of-mouth

Electronic word-o-mouth (eWOM) communication reers to (positive ornegative) statements that are made by potential, actual, or ormer customersabout a product or company, which are made available to a large number o

people and institutions via the internet (Hennig-Turau et al., 2004). eWOMcan be understood as the extension o traditional interpersonal communicationinto the new generation o cyberspace. It quickly moved into the spotlight o


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marketing and consumer research, specically ocusing on how eWOM inu-ences adoption, buying and consumption (Cheung et al., 2008). EWOM, aspart o marketing communication strategies, became a critical tool which takes

the target audience and the message creation into consideration (Phelps et al.,2004). Indeed, electronic word-o-mouth present on virtual social media plat-orms (e.g. discussion boards, user comments o product reviews, news eeds osocial networking sites), is similar to traditional commercial sources o inorma-tion (i.e. in-store inormation, brochures, etc.) in that they are both impersonal.Te dierence is that virtual inormation sources have the advantage o beingnon-commercial (Jepsen, 2006). E-word o mouth and online consumer rec-

ommendation systems orm a part o user-generated content as well.User-led innovation

User-led, user-initiated or user-driven innovation is a phenomenon rstobserved and described in the 1970s by von Hippel (1978). User-led innova-tions have a large inuence on creative industries (e.g. game industry), whereusers are highly involved contributors (Humphreys et al., 2005) and participatein content production as well (Bruns, 2008). User-led innovation begins whenone or more users o some good recognize a new set o design possibilities aso-called design space and begin to explore it (Baldwin et al., 2006: 1291).User-led innovation emphasizes the users participation in the development andinitiation o innovations so their participatory role in designing innovations hasto be noted. A specic type o these innovations isparticipatory design where thepeople destined to use the computer system play a critical role in its develop-ment and design process. In this context participation stands in contrast to the

culture o specialists and experts (Schuler and Namioka, 1993).In Figure 6 we show how output-related notions o participation relate and

dier, highlighting what corporate consequences, in other words what market-ing results, they might bring.


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Figure 6: Output-ocused notions o participation and their scope

Notion Output Result

User-generated contentext, images, audio or audio-visual content

Less inuence and control o busi-nesses, emerging new businessmodels

Consumer-generatedadvertisement

Amateur advertisementsAdvertising messages out o thecontrol o the brand

Viewer-created contentAmateur television content orparticipation in selection

Cheaper video content, higherviewer satisaction

E-Word-o-mouth Electronic recommendation oconsumers Inuence on adoption, consumerdecision making and buying

User-led innovationMore suitable and consumeroriented innovations

Quicker, cheaper and more consum-er suitable innovations

All output-ocused elements o participation lead to the conclusion thatnot only consumers are more than ever empowered to participate at dierentlevels in rms business processes, but rms are also oered additional grounds

or value extraction. A rm that is aware o the available processes or motivat-ing its consumers to participate in a process o mutual creation o value, withall the opportunities and threats involved (see Figure 6), might substantiallyextract added value and competitive advantage rom the situation. Value is cre-ated through participation, and in its every maniestation it brings competitiveadvantages and considerable market value.

2.3 Cluster of participatory notions in marketing

One aim o our article was to give an overview o how these requently usednotions relate, contradict or overlap by dierentiating and connecting all therelated taxonomy o participation, without adding new concepts to the list. Fig-ure 7 shows the cluster o participatory notions as dened in the preceding parto the article. Our gure represents the complexity and overlap o the dierentnotions. At the same time our summary suggests two dimensions or structur-ing the participatory cluster. One suggested dimension o study is rom the sideo the subjectso participation: individuals (themselves divided into sometimes

overlapping, other times diering roles o audience and consumer) or the rmitsel. Te other dimension is the approach o participation that is either theactivity or the output. Overlaps are still present in this model: the notions o


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involvement and participation overlap in terms o their subjects while engage-ment is a complementary notion and uses the corporate perspective.

Figure 7: Relating notions o participation

Source: own illustration

3. Creating market value via participation

3.1 Indirect value

Word-o-mouth marketing is the most important indirect means o creatingbusiness value. While searching inormation, online participatory media sites asorums or blogs replace more and more the traditional inormation search (e.g.via sales personnel or brochures), although reerence groups are still importantsources o inormation (Jepsen, 2006). Tereore online media oer a doubleincentive or companies to turn to. First, as we mentioned beore, eWOM hasthe advantage o being non-commercial. Product inormation is largely presenton online discussion boards and blogs through largely anonymous participants

discussions and subjective product reviews. Reerence groups as another deci-sive element in consumers purchase decisions are to be ound on social mediasites where they share product and brand inormation under their own name.


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It is important or companies to study the cases and contexts where com-munities generate positive messages related to the company in order to avoidthe opposite (Chung and Darke, 2006). rying to inuence opinion leaders

networks and sources o electronic word-o-mouth is all the more important asthese subjective pieces o inormation about a rms products and services havea direct eect on the other members o the audience (potential consumers) thatmight generate a level o involvement towards the rm or its products.

3.2 Direct value

At the same time new media oer much broader opportunities or media

and non-media rms to (nancially) prot rom participating audiences. Teemerging possibility or audience participation has brought great challengesor media companies. First, data collected by observing registered online usersactivities can allow content providers to customize their services even more,in order to better suit and serve users obvious needs and thus create a marketadvantage by better serving their clients. As seen in the denitions o the di-erent concepts related to the types o user-generated content, viewer-createdcontent appeared as a source o competitive advantage: I you cant beat them,

join them. As a considerable part o user-generated content uses elements olegacy material, their creators are oten on the verge o copyright inringement.Instead o prosecuting creative users or utilizing unauthorized sources, the con-tent industry ought to include participating audiences in their business model.

For non-media rms the acilitated access o a large and diverse number ousers and the possibility to integrate them virtually in one space can contrib-ute to solving given business and marketing problems. Crowdsourcing (Howe,2006) is a possible and quick complement to internal research and develop-

ment or gaining leads in problems that are judged unsolvable. Moreover, ac-tive audiences and supposed consumers that take part in the creation o user- orconsumer-generated content are a priceless base o customer inormation and asource o marketable ideas. Moreover, while businesses core model stands uponprotability, individual creators o user-generated content do not necessarilyollow a market logic. From a predominantly pecuniary goal (i.e. principal oradditional source o remuneration) through various combined stances, theycan contribute or mere intrinsic interest (Fller, 2007), enjoyment and sel-

promotion (Berthon et al., 2008) or recognition (e.g. by the other members oa community, by given people, by a prospected potential employer, etc.) as anexpected remuneration.


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From this varying set o goals, businesses can set up a viable business model:Te main challenge o virtual consumer integration may be to create a com-pelling innovation experience (Fller, 2005: 645). Tis can include providing

a community-based, shared set o tools or people in search o recognition oradditional revenues to publish the results o their creativity and a surace withthe possibility or others to use (e.g. istockphoto.com, or Apples AppStore).

3.3 Threats and problems

As much as an online brand community can oer positive business ex-ternalities to a rm, as much malevolent user maniestations can harm their

business activities3

. Consumers are technologically enabled to express their dis-content over the internet with very little eort. Tis, combined with the pro-pensity o human beings to more easily notice and voice negative experiences,makes the internet a acilitator in developing anti-branding, i.e. the systematicbrand image erosion o more renowned brands (Krishnamurthy and Kucuk,2009) through anti-an imagery, spoo videos, and websites. Tis activity canbe personal (e.g. via ones Facebook message wall) or impersonal (e.g. under anunidentiable nickname or by spreading an unsigned comic image o the given

brand). In the lack o a possibility o personal and/or ace-to-ace interactionor the rm, an anonymous and impersonal user contribution to brand-relatednegative content is hardly under the control o the company and can do a loto harm to a brand. In contrast, a direct complaint to the retailer (i.e. voice re-sponse), an expression o discontent to amily and acquaintances (i.e. person-al response) and a complaint to higher authority (i.e. third party response)are in most cases less visible and thus harm the brand less.

Managing participation at any level or in any process o the organizationwill lead to a need or more capacity, more working hours, and more resourcesrom the company side. Tis implies rom an economic point o view thatparticipation may have a cost increasing eect at a certain level and/or or aperiod o implementation and adaptation. As companies and organizations arebounded by short-term cost eciency, the participation phenomenon mighthave a limited reception through its short term eects on costs.

Well-designed spaces suitable or audience participation may create a veryauthentic positive brand image, however, the phenomenon o participation, inany orm, requires that audiences be active. However it is likely that not every-one is willing to contribute, thereore in a participatory space active audiences

3 Te threats and problems related to consumer participation at the democratic level are beyond the scope o thisarticle.


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views will be overrepresented. Another but related threat is the articulation othe whole audience as homogenous regarding their attitudes towards participa-tion. Consumers and audience members may have dierent eelings and atti-

tudes towards participation: the lead user type o consumers will be expectedto be the rst to react to a new advertising campaign or generate the highestnumber o comments on the rms social network page. At the same time thereare other consumers who do not want or do not have the time, capacity, skill oraccess to share their opinion, to become a participant actor. More active con-sumers and audience members might also suppress the voice o the less activeor even passive (even though potentially more numerous) part o the audience.Tis phenomenon may launch a new type o marketing myopia, where compa-

nies may lose sight o what their consumers want even while listening to their(participating) audiences. Te notion o marketing myopia was introduced byLewitt (1960). According to him, companies ocusing on products rather thanconsumers would pave the way or a business to ail, as it is a short-sightedmindset leading complacency and a loss o sight o what the customers want. Inthis new communications setting this implies that a company (or any organiza-tion) have to bear in mind that the active audience does not necessarily repre-sent their whole consumer audience.

4. Conclusion

In todays oversupply o brands, products, services and inormation, thosewho are able to involve their audiences win their audiences choice. Participa-tion in communication means understanding; participation in the generationo new ideas means commitment; participation in usage means winning andmeeting the preerences o the consumers.

Te notion o participation is not new in marketing communication, salespromotion and direct marketing applications have required active audienceparticipation or decades, so do the classical media by asking or viewers opin-ion. However, the emergence o web 2.0 and the integration o the internet andclassical media shed new light on the notion o participation

From a marketing perspective, it is not the question o involving potentialaudiences, consumers at the point o planning, production, communication,as the major source o marketing success lies in act in nding aorm o partici-

pation that is in accordance with product and brand concept, that is in line withprevious communication messages and is benecial enough or the audience to con-tribute to. I the company is able to establish a avourable space, the company-consumer interaction will result not only in mutual benets, but also will be


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worthwhile or the media to urther broadcast about, thereore providing extramedia coverage and value. As a result, classical marketing concepts are to beenriched with the notion o the participating consumer. Tose market actors

who are able to provide inspiring and motivating spaces or contributing audi-ences will have a structural advantage to become market leaders.At the sametime participation cannot be considered as a magic wand o uture market-ers. It has its disadvantages and threats as participation is not the right waytowards each and every consumer, as they may have dierent attitudes towardsparticipatory actions. Also participation may aect higher costs or companiesthrough higher needs in human resources, data mining capacity and more com-plex management challenges.

Tis article has also attempted to show the diversity o concepts that circu-late in the participatory cluster. Te main strategy to structure the phenomenono participation that is proposed in this article is to use an activity and outputperspective, while urthermore dierentiating it according to its audiences: us-ers / consumers and rms. I we look at the activity-ocused notions o involve-ment, engagement, participation, contribution, co-creative labor, co-creation,consumer empowerment and crowdsourcing, we nd processes where mutuallybenecial activities occur but are placed at dierent stages o the value creation pro-

cess. Involvement relates to consumer motivation, engagement means mutualconversation, contribution means intervention in the business process itsel atsome point by the consumer, etc. Overall, each notion captures one momento the mutual value creation process. Similarly, output-based notions pinpointvaluable contributions ideally or both the company and the consumers.Tese creations mainly are: texts, images, videos, commercials and products.Tis might suggest that both activity- and output-based notions o participa-tion may be reconsidered, simplied and unied in the uture. However, this

richness o applied notions underlines the topical importance o the participa-tion phenomenon, which in its current orm identies numerous relevant di-mensions o participation or uture research.

Companies who are very successul in involving their audiences are otensuccessul in many aspects; they use traditional marketing and marketing com-munications planning logics that have been improved by creating opportunitiesor participation by meeting consumers on the internet, creating collaborativetools, engaging consumers in product development and testing, triggering con-

versations. We believe that the notion o participation is an inevitable market-ing tool or any corporate player in any market place.


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Documents

Competing by Participation – a Winning Marketing Tool Nóra Nyirő, Tamás Csordás and Dóra Horváth