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Are Consumer-Generated Ads Ready for Prime Time?

NEW YORK -- The latest hot trend in advertising is consumer-generated advertising (CGA), where consumers of a product or service participate in the ad campaign. But at the ad:tech conference here this week, a panel representing advertisers, agencies and videographers were notably cautious in their assessment of the new marketing dynamic.

And that muted tone came from a group of CGA advocates.

Facebook's announcement earlier this week, put CGA in the spotlight. Advertisers and agencies will continue to study, plan and launch CGA campaigns, where consumers are recruited to become brand evangelists, spreading the packaged message of a product or service virally. But experts say the ROI on these campaigns is nearly impossible to measure, and they are not as scalable as the conventional Madison Avenue creative.

"I don’t ever see CGA replacing the traditional TV spot," said Neil Perry, CEO of XLNTAds, who moderated the panel. "But it has a place."

And a major part of that place is generating buzz. That's where CGA campaigns shine, said Kevin Nalts, a videographer whose self-produced ads for brands like Mentos have ricocheted around YouTube to considerable acclaim.

When asked about ROI, Nalts is dismissive. "It’s not a good medium for direct transaction," he said. With a low single-digit clickthrough rate from the creative to the commerce page, Nalts believes that CGA will remain a sidelight until marketers can bridge this gap between content and sales.

"If you’re measuring it on a direct conversion rate, it’s probably going to let you down," he said.

While ROI remains elusive, the CGA crowd is looking more to metrics that gauge brand conversation, such as Nielson’s Buzz Metrics. For outfits operating under a tighter budget, Technorati and Google have tools that can help track the buzz of a CGA campaign.

But CGA can help marketers in other, less tangible ways, like giving marketers a better pipeline to their consumer base than agencies are sometimes able to provide. Even though the advertiser will retain ultimate control over the brand, CGA campaigns give the most passionate consumers a voice in how that brand evolves.

Still, not all consumers engage in a CGA campaign to shill for their favorite products. Others are after the peculiar sort of fame that comes from being an online sensation. Some hope to parlay a video into a career in advertising. Others are simply after the cash prizes that marketers are increasingly offering for the best spot, such as the $57,000 Heinz offered in its CGA campaign.

The agency’s role in a CGA campaign is less clear. Smaller campaigns invite the potential for the exclusion of the agency, as advertisers can give consumers the tools to create their own ads directly. This presents a scalability issue, however, that agencies feel they can help resolve, said Ben Ezrick, senior strategist at Ogilvy New York.

In large CGA campaigns, agencies have to work as hard (or harder) than in traditional ad rollouts, Ezrick said. In a case like the Heinz contest, it becomes the job of the agency to sift through all the entries and filter out those that don’t represent the brand.

"Marketers aren’t just handing their campaigns over to 16 year-olds," Ezrick said. "Agencies are still the brand stewards."