February 2009: User Generated Content Hard to Monetize

Industry Stats & Data by eMarketer

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User-generated content is integral to the online experiences of millions of US Internet users. From entertainment to communications to e-commerce, consumers are increasingly in charge of the creation, distribution and consumption of digital content.

By 2013, nearly 155 million US Internet users will consume some form of user-created content, up from almost 116 million in 2008.

The number of user-generated content creators will grow by similar proportions, reaching 114.5 million in 2013, up from 82.5 million in 2008. That will translate to 51.8% of US Internet users in 2013, up from 42.8% in 2008.

Levels of participation vary widely. Social networks are the most popular content creation activity—37% of US Internet users created social network profiles in 2008. The percentages of users who created videos and blogs were more moderate, ranging from 8% to 11%. And virtual worlds—which entail the creation of avatars and other online representations, often with user-generated photos, graphics and audio—were the most niche-oriented of these pursuits, with a 6% participation rate.

The number of people who consume user-generated content exceeds the number of creators. This is true in any content loop—more people are always spectators than active participants. But because user-generated content is affordable, accessible and amenable to mass participation, the gap between creators and consumers is smaller than in traditional media.

However, this frenzy of content generation is not likely to produce commensurate rewards for marketers or site publishers, since advertisers continue to shy away from attaching their brands to unpredictable content.

To realize the full potential of user-generated content, marketers and site publishers must be willing to work together. For marketers, that means taking risks and becoming savvier about finding safe havens within social media channels. For site publishers, it means creating environments where marketers feel comfortable investing their ad dollars.

Until these shifts occur, user-generated content will remain a phenomenon whose popular appeal eclipses its commercial possibilities.

Find out more about eMarketer's digital marketing and the new report, "“User-Generated Content: More Popular than Profitable"

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