The ROI of UGC — blurring the lines between fans, creators, and influencers

By Brit Starr, SVP corporate marketing, CreatorIQ

New research shows brands are actively converting organic fans into creator partners. Here's everything you need to know.

Word of mouth is nothing new. Since the dawn of commerce, the most reliable source of customers has been a recommendation from a trusted source.

For years, brands have tried to piggyback on that concept with paid endorsements, hiring celebrities, sports stars, and other recognizable individuals to say nice things about their products or services. Sometimes those were existing customers who genuinely used and liked the products, but not always.

Enter social media, where word of mouth became scalable, trackable, and sometimes viral. In the early days, brands naturally used this same endorsement strategy, paying so-called “influencers” to use or endorse products to their legions of followers. The bigger the follower base, the better.

But social media, and with it what’s traditionally known as influencer marketing, has evolved. Brands no longer need to rely solely on celebrities (or even “social celebrities”) to generate mass awareness. Brands can also leverage grassroots, dare I say authentic, word of mouth from actual customers themselves.

We recently conducted a study that found 77% of brands are actively converting organic fans into creator partners. That means rather than (or in addition to) paying celebrity influencers, brands are looking for customers vocally promoting their brand across social media for free, and then recruiting them as official partners.

What’s driving UGC sponsored content

A number of forces are converging to accelerate this trend.

First consumers prefer UGC, creator-led recommendations over paid endorsements because they see creators simply as highly visible proxies for themselves. Creators are both trusted advisors and a source of emotional support and validation. Creators are part of a community, talking with them, not to them. That’s an authentic connection, and when captured in a brand-supported campaign, it can scale rapidly and deliver impressive results.

According to our survey, brands credit the authentic and relatable content that creators publish as the main driver of conversions, at 48%. Aspirational or instructive content follows at 21%, with ease of reach and entertainment value both tied at 15%.

Second, brands can more easily find, recruit, and manage a larger number of creator partnerships than ever thanks to the availability of creator discovery and management platforms like CreatorIQ.

Brands now have the ability to find and recruit a larger number of smaller creators that in the aggregate provide the same reach as fewer, larger influencers. Since these smaller creators boast higher engagement rates than influencers with larger followers can command, this allows brands to get both more reach and more engagement from their creator-led campaigns.

Our survey found that 64% of brands recruit UGC creators organically, 45% use creator discover tools like CreatorIQ, and 41% are a result of past partnerships expanding into deeper relationships.

Third, the impact of all these efforts is more measurable than ever, allowing brands to quantify the ROI that creator-led campaigns deliver and therefore justify the investment placed in them. Although creator campaigns traditionally have been considered awareness efforts, 94% of the brands surveyed say they can attribute sales to creator content across social platforms. That’s based on a mix of conversion rates, click-through web traffic, and marketing mix modeling.

Finally, creators have become increasingly interested in monetizing their social publishing activity. The compensation they can earn partnering with the brands they’re posting about anyway helps fuel their ability to keep creating more content, more frequently, and with better quality. For some, it’s a lucrative passion project side hustle. For others is a new career.

Influencers vs creators - a blurred line

As these forces continue to evolve, the line between UGC creators and paid influencers will continue to blur. It’s no longer a new, binary distinction. It’s not as simple as paid vs free. It’s rather about intent and motivation — passion vs profit.

The recent rise of college athlete endorsements is a perfect analogy. Until recently, college athletes previously were barred from accepting compensation from brands for use of their name, image, or likeness. So what they posted was from the heart. Once those NIL rules changed, athletes just started getting paid for it as well. They don’t think of themselves as influencers, but rather as athletes who happen to work with brands.

Converting brand fans into official partners along these same lines allows brands to align with authentic content from individuals with a pre-existing passion for their products or message. That’s far more effective than simply paying for followers.

That’s why 67% of surveyed marketers report increasing their investment in creator marketing from 2022 to 2023. What’s more, that increase comes at the expense of more traditional formats, like advertising. Of those brands whose budgets increased, only 24% are working with a net-new budget and 76% are diverting the funds from other marketing activities, including digital ads.

Creator-led marketing is a natural evolution of influencer marketing, and is outpacing nearly every other format in its potential for brands to scale. By amplifying creator assets through various channels, brands can amplify their marketing efforts with greater results, and at lower costs.

To learn more, get the report Can Creator-Led Marketing Really Drive ROI? available for download here.