• February 11, 2009
  • By Jessica Tsai, Assistant Editor, CRM magazine

The 6 Principles of User-Generated Content

SAN JOSE — The success of President Barack Obama's campaign last year may have been the final stroke of validation businesses needed to support a focus on user-generated content (UGC). The high-profile nature of the campaign may even have been the impetus for the first-ever UGC Conference & Expo, held here this week. Whatever the case, interest is certainly on the upswing: Despite concerns that the recession might lead to cuts in travel spending and correspondingly anemic attendance, approximately 500 creative, technical, or "hybrid" professionals showed up, representing a spectrum of UGC experience that ranged from those just getting started to those already monetizing the material. In one of the conference's opening keynotes, in fact, presenters Bruce Livingstone and Kelly Thompson examined the case of iStockphoto, an online stock-image provider founded on user-generated content -- and offered attendees a fairly unique perspective, considering their roles as the company's chief executive officer and chief operating officer, respectively.

[Editor's Note: An additional dispatch from this year's User-Generated Content Expo can be found here; our blogpost of Jessica Tsai's live tweets sent from the scene may also be of interest.]

The two executives made clear that UGC was at the very core of iStockphoto's creation. Since its inception in May 2000, rapid growth has won iStockphoto recognition as one of the top 400 Web sites in the world, according to the presentation materials. With more than 65,000 contributors to the company's photo and video library, the executives also revealed the launch of iStockaudio -- what they called the industry's first royalty-free audio offering, with 10,000 files already available.

As enterprises accelerate the shift toward a consumer-centric approach, business is never "just business," Livingstone and Thompson said -- an allusion to their keynote's title, "It's Personal: The Possibilities and Pitfalls of Monetizing User-Generated Content."

"It's always personal," Livingstone told the audience. "Every decision you plan to take evokes a visceral and immediate response from another." Therefore, he added, trust and confidence between the consumer and the business is critical. To that end, Livingstone and Thompson shared the following fundamentals -- and warning signs -- to optimizing user-generated content.

Passion is the glue: Passion from the users can only be generated in response to a passionate business leader and employees. Only then can the community -- and the profit -- grow. "You can't have crowdsourcing without a crowd," Livingstone stated. From there, you can mold the community to enhance your operation and deliver on the needs of that community. At iStockphoto, executives are continually diving in and participating in the communities, even hosting "iStockalypse" events three or four times a year to bring staff members and community contributors together around the world.

Innovation is imperative: When the business began nearly a decade ago, iStockphoto was the first to market features such as color search and image zoom, Livingstone said -- all of which are now commonplace to most image-hosting sites. Within at most a year of any successful launch, he warned, there will be copycats ready to pounce. In response, first-movers hoping to remain competitive must never stop innovating. In an attempt to stay edgy, however, iStockphoto learned a lesson in listening to the crowd: Livingstone introduced the "Forumeter," a social-networking tool that characterized community participants based on how others perceived them (e.g., as the helpful superhero, the humorous clown, the complaining crab, or the antagonizing troll). "The problem was, the community didn't ask for it," he recalled. "It was too accurate. People didn't want to know how they were seen in the forums." The feature was removed after 30 days. What did come out of the crowd -- and, in hindsight, this seems inevitable -- was the availability of iStockvideo (and, now, iStockaudio). Fully 20 percent of iStockphoto's customer segment was buying videos from other sites, and content contributors were looking for an outlet. When iStockvideo launched in 2006, the offering quickly became a substantial part of the company's revenue, reaching 10 percent almost overnight.
Communication counts triple: The community always wants to be the first to know. By giving advance notice, consumers have time to acclimate to the change, thereby affording them a sense of control. For instance, despite having to increase prices, Thompson claimed iStockphoto saw 85 percent positive feedback as a result of having given the community a heads-up. While Thompson admitted that the company sends more communication directly to the community than through any other means, he warned that the method bears great responsibility. "Be prepared to change course if that's the feedback you get," he said.

Outsource to the crowd: The executives noted that iStockphoto enlists 140 global "inspectors" -- people who were valued users of the iStockphoto platform, and who were singled out for having what Livingstone called "an eye for composition" and a reputation for being creative and active in the community. These inspectors, he added, have been trained extensively on copyright and trademark laws, making them iStockphoto's "first line of defense against any type of infringement."

I.T. is it: In the online world, growth can sometimes be difficult to predict. Having too much bandwidth is costly, but not having enough can be disastrous. Initially held together by what Thomspon jokingly characterized as "duct tape, bubble gum, and hope," iStockphoto was installing servers as fast as possible. Ultimately, growth was so rapid that Thompson recalled it having been "difficult to prepare for," but he warned that, when architecting your site, you should plan for your own best-case scenario. "Man, do we feel for the guys at Twitter," Thompson said, referring to the microblogging phenomenon. "All the blood, sweat, and tears to make sure the ‘Fail Whale' doesn't show up." (The "Fail Whale" image appears on the Twitter site to signal downtime due to traffic overload; incidentally, Thompson noted, the image was once available on iStockphoto until Twitter eventually bought the rights.)

Flexible focus is the foundation: "Get comfortable with discomfort," Livingstone said. "If you're uncomfortable with risk, you're probably at the wrong conference [and in] the wrong business." Remaining flexible, he said, is critical in the UGC business. If it having fewer bells and whistles is the only way to ensure great performance, go that route. When users are empowered, there will inevitably be those who attempt to game the system -- for example, "gangs" that highly rate each other's content to get it onto the first page. One developer even programmed his video so that each time the video was clicked, a vote would automatically be cast to rate the video highly.

For the most part, Livingstone said, iStockphoto's community is out for the greater good. With 65,000 professional eyes patrolling the entire Web, "they will find everything," he said -- illegal image use, iStockphotos improperly loaded onto other sites, or pictures given away for free. Essentially, iStockphoto has managed to get the community to work on the company's behalf.

"Most [companies] have to pay for this kind of filtering," he told the audience. "We have it built in."

Stay tuned for an additional dispatch from this year's User-Generated Content Expo, and also see our blogpost of Jessica Tsai's live tweets sent from the scene.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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