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What Are UGC Ads? A Complete Guide to Boost Engagement and ROAS

Luca
Co-founder @Movig
Published on
October 25, 2024
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    User-generated content (UGC) ads are changing how brands connect with audiences by offering an authentic, cost-effective way to increase engagement. In this guide, we'll explain what UGC ads are, their different types, how to use them to improve your Return on Ad Spend (ROAS), and real-world examples of successful UGC campaigns.

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    What Are UGC Ads?

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    UGC ads leverage the genuine trust and authenticity of real customer experiences to build credibility and boost engagement. UGC ads use content created by consumers who have enjoyed positive experiences with a brand’s products or services. This content can include reviews, testimonials, social media posts, videos, blogs, and more. That's why UGC ads are used by various types of companies, including e-commerce brands, startups, and large corporations. These ads effectively leverage customer-generated content to enhance engagement and build trust across different business models. For example, e-commerce brands benefit significantly from UGC by showcasing real customer experiences.

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    Key Benefits og UGC Ads

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    1. Authenticity & Engagement: 83% of marketers agree that authenticity is very important to their brands, according to Stackla. Since UGC is created by real users, it provides an authentic perspective that traditional ads lack. For this reason, UGC generally resonates more with audiences, leading to higher engagement rates. For example, Coca-Cola’s “Share a Coke” campaign, where people were invited to share photos of themselves with personalized Coke bottles, saw a 26% increase in engagement on Twitter and Instagram on average.‍

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    2. Cost-Effectiveness: Leveraging UGC can be more cost-effective than creating brand-generated content. One of the significant cost advantages of UGC is that it uses content created and shared voluntarily by customers. This content is often available for free or at a much lower cost than creating professional videos or photos. For example, Doritos encouraged customers to create their Super Bowl ads through the "Crash the Super Bowl" contest. This approach saved a significant amount of money on marketing production costs while keeping the community highly engaged.‍

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    3. Trust: According to a study of EnTribe, 84% of people are more likely to trust a brand if they use UGC in their marketing campaigns. Consumers tend to trust peer recommendations over brand advertising, enhancing credibility and fostering loyalty to the brand. 

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    Types of UGC Ads

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    1. Social Media Posts: Social media platforms like Instagram, Facebook, and Twitter are hotspots for UGC. Brands can repurpose posts, tweets, and stories where customers share their experiences or showcase the products. Starbucks frequently reposts photos shared by customers enjoying their beverages, especially during seasonal campaigns like the release of Pumpkin Spice Latte. They use a branded hashtag, #RedCupContest, encouraging users to share their holiday-themed Starbucks drinks. 

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    2. Customer Reviews and Testimonials: Reviews and testimonials on websites like Yelp, Google, and Amazon provide genuine feedback from customers. Airbnb uses reviews and testimonials from guests to create ads that highlight unique stays and positive experiences. They feature quotes and star ratings prominently in their ads. These UGC ads build trust and credibility, showing potential customers that others have had great experiences. 

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    3. Video Content: User-generated videos, such as unboxings, tutorials, and product reviews, offer dynamic and engaging content that can be used in ads.

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    4. Blogs and Articles: UGC can also include blog posts and articles written by customers or influencers. These long-form contents can be condensed and repurposed into ads.

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    ‍5. Contests and Hashtags: Brands can create contests and encourage users to share content using a specific hashtag. The best entries can then be used in ad campaigns. Glossier, a beauty brand, uses the hashtag #GlossierIRL to encourage customers to share filter-free selfies using their products. Glossier features these photos on their social media and marketing materials, making real customers the face of the brand. This strategy has significantly contributed to Glossier's credibility and community engagement, attributing 90% of its revenue to UGC.

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    A Powerful Type of UGC Ads: TikTok Spark Ads

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    TikTok Spark Ads are a unique advertising format that allows brands to amplify organic content from TikTok users or their own profiles. Unlike traditional ads, Spark Ads promote existing TikTok videos, giving them a more authentic and native feel. This format is especially effective because it capitalizes on the organic engagement a video has already generated, allowing brands to reach a wider audience while maintaining the original content’s integrity.

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    Brands can leverage Spark Ads to increase sales by promoting user-generated content (UGC) that showcases their products in real-life scenarios. For example, if a TikTok user shares a video of themselves using a brand’s product, the brand can request permission to promote that video as a Spark Ad. This approach boosts credibility, as viewers are more likely to trust content from real users over traditional brand-created ads.

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    Spark Ads also offer advanced targeting options, allowing brands to reach specific audiences based on interests, behaviors, and demographics. Combined with TikTok's strong engagement metrics, this ad format can drive higher click-through rates, more conversions, and ultimately, increased sales. By blending organic content with paid promotion, Spark Ads create a seamless and effective marketing strategy for brands looking to boost their visibility and engagement on TikTok.

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    Meta Ads in UGC Advertising

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    Meta ads on Facebook and Instagram play a crucial role in user-generated content (UGC) advertising, blending authentic user content with brand messaging. These ads provide businesses an opportunity to extend their reach by showcasing real customer experiences. Here’s how brands can make the most of Meta ads combined with UGC.

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    • ‍Showcase Authentic Experiences: Incorporating UGC into Meta ads allows businesses to highlight genuine customer experiences and reviews, which research shows are highly influential. A study by Stackla found that 79% of people say UGC highly impacts their purchasing decisions, compared to just 13% for brand-generated content. By promoting authentic content created by users, businesses can create more engaging and trustworthy ads that resonate deeply with potential buyers.

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    • ‍Seamless Shopping Journeys: Meta ads enable marketers to build clickable galleries that lead directly to product pages. With 81% of people researching products on Instagram before making a purchase (Facebook IQ), brands can leverage UGC to show real-life product use and create frictionless shopping experiences. Featuring authentic customer content, like product reviews or demos, allows users to make a purchase decision in fewer steps, increasing conversion rates.

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    • ‍Diverse Industry Applications: While UGC is particularly effective for eCommerce brands, Meta ads support a wide range of industries—from fashion to tech. For example, a beauty brand can feature customers’ makeup tutorials, while a tech company might showcase real-world user reviews. This versatility makes Meta ads an ideal format for demonstrating products across multiple industries.

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    • Interactive Engagement: Meta ads foster interaction by encouraging users to engage with content shared by their peers. According to Hootsuite, UGC-based ads see a 4x higher click-through rate than traditional ads. By showcasing real user content, brands can build deeper connections and inspire consumers to become part of their story.

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    • ‍Driving Traffic and Sales: UGC in Meta ads has a dual impact. It not only drives online sales but can also boost in-store visits, making it ideal for omnichannel strategies. Brands that use UGC-based ads can see a 29% increase in conversion rates, as consumers are more likely to trust peer-generated content.

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    Practical Tips for Optimizing Meta Ads with UGC:‍

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    • Incorporate video content: Meta reports that video ads receive 1.8x more engagement than static image ads. Featuring user-generated videos such as product tutorials or unboxing can significantly boost engagement.

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    • Test different ad formats: Use A/B testing to experiment with formats like carousel ads, Stories, and Instagram Reels to see which UGC format performs best.

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    • Leverage hashtags: Encourage customers to use branded hashtags so you can easily find and repurpose UGC in future campaigns.

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    Understanding Targeted Advertising in UGC Ads

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    Targeted advertising within User-Generated Content (UGC) ads allows brands to reach potential customers with greater precision. This data-driven approach focuses on delivering ads that are more relevant and engaging, increasing the chances of conversion.

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    • Customization: Targeted UGC ads leverage user data such as browsing history, past purchases, and online behavior to create personalized ads. According to Epsilon, 80% of consumers are more likely to purchase from brands that offer personalized experiences. By tapping into these insights, brands can show ads that resonate on a personal level, making users feel seen and understood.

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    • Relevance: Targeted ads ensure that users encounter content aligned with their interests, increasing the likelihood of engagement. Studies show that personalized ads can boost click-through rates by up to 50% (Adlucent). By delivering tailored UGC ads in users’ social media feeds, brands can cut through the noise and capture attention more effectively.

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    Through these tailored experiences, brands enhance user satisfaction by showing relevant content that fits seamlessly into social media scrolling. This precision not only improves the user experience but also leads to higher ad effectiveness, ultimately driving more meaningful interactions and conversions.

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    Practical Tips for Improving Targeted UGC Ads:

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    • Use lookalike audiences: On platforms like Facebook, you can create lookalike audiences to find users with similar behaviors to your existing customers, improving targeting accuracy.

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    • A/B test your targeting: Experiment with different audience segments to identify which targeting strategies drive the highest engagement and conversions.

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    • Leverage retargeting: Show UGC ads to users who have interacted with your website or previous ads for better conversion rates.

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    Implementing UGC Ads to Maximize ROAS

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    To maximize Return on Ad Spend (ROAS) with UGC ads, brands need to implement strategic approaches. Here’s how to do it effectively:

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    1. Identify and Source High-Quality UGC: Finding high-quality UGC is the first step. Brands can identify UGC by:

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    • Monitoring social media mentions and hashtags
    • Encouraging customers to leave reviews and share their experiences
    • Collaborating with influencers and loyal customers

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    Outsourcing to UGC platforms like Movig saves time and resources by connecting brands with top-quality creators, managing content production, and ensuring authentic, high-performing UGC that boosts engagement and conversions.

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    2. Obtain Content Permission: Before using UGC in ads, it's crucial to obtain permission from the original creators. This not only respects their rights but also fosters trust. Additionally, it’s essential to adhere to copyright and intellectual property laws. Ensure that the content does not infringe on any copyrights or trademarks before posting.

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    3. Choose the Right Platforms: Different platforms cater to different audience segments. Understanding where your target audience spends their time can help in choosing the right platform for your UGC ads. For example, YouTube ads utilize Google's advanced targeting capabilities, making them highly effective for reaching specific audiences. The platform hosts a wide variety of content, from video games and makeup tutorials to niche documentaries. Although YouTube has a diverse audience, it tends to skew younger, with the largest user demographic being between 20 and 34 years old.

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    4. Create Content Optimized For Ads: Each platform has its own specifications and best practices for ads. Ensure your UGC ads are optimized for the platform you’re using, whether it’s Instagram Stories, Facebook feed ads, or YouTube pre-roll ads.

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    5. Incorporate CTAs: Even though UGC ads are authentic and engaging, they still need a clear CTA to drive desired actions. Whether it’s “Shop Now,” “Learn More,” or “Sign Up,” ensure your CTA is compelling and relevant.

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    6. A/B Testing: A/B testing different versions of your UGC ads can provide insights into what resonates best with your audience. Test different content formats, captions, CTAs, and visuals to optimize performance.

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    7. Monitor and Analyze Performance: Regularly monitor the performance of your UGC ads to understand their impact on ROAS. Use analytics tools to track key metrics such as engagement rates, click-through rates, conversion rates, and overall ROI.

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    Five Best UGC Ads Platforms

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    Insense

    Insense is a UGC platform that connects brands with content creators to produce high-quality, authentic user-generated content. It offers tools to help brands find and collaborate with creators, from influencers to everyday users, who align with their target audience. Insense also supports ad integration, making it easy for brands to run UGC-based ads across platforms like Instagram and TikTok, which helps reach audiences with genuine, relatable content.

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    Bazaarvoice

    Bazaarvoice is a UGC platform focused on customer reviews and ratings. It allows brands to collect and display helpful feedback from real customers, building trust and influencing buying decisions. This platform is essential for businesses wanting to strengthen their online reputation by highlighting satisfied customers’ experiences.

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    Tagbox

    Tagbox is a flexible UGC tool designed to make it easy for businesses to gather and show off user content. It includes features to review and analyze content, ensuring brand safety and tracking success. Tagbox gathers posts from different sources, like social media and reviews, making it great for brands that want to share real user experiences and connect more with their audience.

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    Billo

    Billo is a UGC platform known for being simple and easy to use. It helps businesses collect, review, and show user content on their websites and other materials. Billo also allows brands to adjust the look of their UGC displays to match their style, making it a great choice for companies looking for a straightforward UGC tool.

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    Movig

    Movig is a UGC platform that specializes in connecting brands with creators to produce and manage user-generated content, especially for video-based platforms. With a strong data-driven approach, Movig helps brands streamline their outreach and optimize content for platforms like TikTok, making it ideal for startups and DTC brands seeking customized UGC solutions.

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    Challenges and Risks

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    Risk of Harmful Content: Make sure to use tools and rules to catch and block any hurtful or inappropriate posts. Act quickly to remove flagged content and follow clear rules to keep the community safe.

    Example: Social media apps like Instagram let users hide rude comments, report mean messages, and block harmful users. Similarly, YouTube uses computer systems to find and take down harmful videos automatically.

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    Handling Privacy Concerns: Always get clear permission from users to use their content. Tell them exactly how their photos or videos will be shared and protect their data. Be open about what information you collect and how you store it.

    Example: Starbucks encourages customers to share photos by tagging the brand or using specific hashtags. This signals user consent for Starbucks to potentially share their photos on its social media channels. They also keep user privacy safe by not revealing any private details.

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    Keeping Control Over Brand Image: Set clear rules for the type of user-generated content that matches your brand's style and values. Partner with influencers or users whose style fits your brand.

    Example: Apple is very selective with UGC, picking only the content that matches its sleek and simple image, making sure every post reflects their brand.

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    By carefully managing these risks, brands can make the most of user-generated content in their ads. Following successful examples, like those on Instagram or YouTube, can help brands use UGC without the downsides.

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    Five Examples of UGC Ads in Action

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    Apple

    Apple’s #ShotOniPhone campaign invited users to share their best photos taken with an iPhone. This campaign not only showcased the impressive capabilities of the iPhone camera but also built a community of engaged users who contribute high-quality content. This user-generated content was then featured in Apple’s marketing materials and social media channels, boosting authenticity and appeal.

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    Lush

    Lush's UGC ad campaign used video content and social media posts on Instagram and YouTube. They encouraged customers to share their experiences with the hashtag #LushLabs. Lush then turned these customer videos into Instagram stories and YouTube ads. This authentic content connected well with their audience, boosting engagement and conversions. It also built a strong community and increases customer loyalty.

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    Spotify

    Spotify's #FindYourFeels campaign encouraged users to share personal stories about how music influences their lives using the hashtag #FindYourFeels. This user-generated content (UGC) campaign was shared across social media and on Spotify's platform, showcasing real-life experiences and building a strong community. The authentic, relatable stories enhanced user engagement and reinforced emotional connections between Spotify and its users, demonstrating the effectiveness of UGC in creating a personal and engaging marketing strategy​

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    Coca-Cola

    With “Share a Coke” Campaign Coca-Cola encouraged customers to share photos of bottles with their names or friends' names on social media. This campaign inspired millions of people to create and post content, creating a sense of personalization and engagement with the brand.

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    GoPro

    GoPro's “Photo of the Day” showcases customer photos and videos taken with their cameras by featuring a "Photo of the Day" across their social media. This highlights GoPro’s adventurous brand image while letting users feel like part of a community, fueling even more UGC.

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    Conclusion

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    UGC ads represent a powerful tool in the digital marketer's arsenal, providing authentic, engaging, and cost-effective content that resonates deeply with audiences. By understanding the different types of UGC ads and implementing strategic approaches to leverage them, brands can significantly enhance their ROAS.

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    Key takeaways include sourcing high-quality UGC, optimizing content for different platforms, incorporating strong CTAs, and continuously monitoring performance. Through real-world examples, it's evident that UGC ads not only build trust and engagement but also drive substantial business results. In a world where consumers value authenticity and peer recommendations, UGC ads stand out as a highly effective strategy for brands looking to connect with their audience on a deeper level and maximize their advertising investments.

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    Movig helps brands find the right creators to produce authentic, high-performing content. Whether you need help sourcing UGC creators or managing your next campaign, Movig can assist you in driving impactful results. Schedule a demo today to learn how we can elevate your UGC advertising strategy and connect you with top creators.