Research shows that UGC ads bring up to 4x higher click rates, 10% more conversions, and a long list of powerful benefits for brand awareness. But building an effective UGC marketing and ad creatives strategy is a complex, long-term commitment.
To help eCommerce brands and marketing teams succeed with UGC, we’ve prepared a glossary of essential terms and concepts you need to know.
A/B Testing (Split Testing)
A method to and compare two versions of a webpage, email, or other content. These tests help to determine which one performs better in terms of converting visitors into customers or taking an action. You can use A/B tests to compare different concepts, or even the same concept with different creators.
The underlying idea or theme that drives the narrative and visual elements of an advertising campaign. An ad concept aims to creatively convey the unique selling proposition of a product or brand to consumers.
This is the written text that appears in your ad. This copy should contain persuasive and compelling messaging. It should also be simple and straightforward. Its purpose is to convince potential customers to take some action, such as making a purchase or requesting more information.
A collective term for the visual elements, design, and copy used in an ad. Effective ad creatives capture attention, convey a message, and prompt responses from the audience. In the context of UGC marketing, ad creatives can replicate the feel and vibe of actual user-generated content. To do this, eCommerce brands work with creators (more on them later).
Call to Action (CTA)
A prompt or instruction within an advertisement that encourages viewers to take a specific action, such as clicking a link, filling out a form, or making a purchase. If you are using UGC in your marketing, it’s crucial that all of your calls to action are clear and easy to understand. Each ad should have a single CTA for viewers to take.
Click-Through Rate (CTR)
This it a measure of the amount of people who are clicking through after watching your ad. You can calculate it by diving the number of individuals who click by the total number of people who view the ad.
The percentage of users who take an action that you want them to take after interacting with an ad or landing page. This could include making a purchase or signing up for a newsletter. If your click rate is high, but your conversion rate is low, this could suggest that there is some technical or UX issue on your pages.
Cost Per Action (CPA)
This metric helps marketing teams to stay on top of their expenses. For every action that a customer takes, you need to know how much it costs to get them to that point. Each a sale, click, or form submission has a CPA. It’s vital to know what it is, and whether it is optimal given your budget and goals.
Cost Per Click (CPC)
The average cost that advertisers pay for each click that an online ad generates. It’s a common metric used in digital advertising to assess the cost-effectiveness of campaigns.
Cost Per Mille (CPM)
A pricing model where advertisers are charged for every 1,000 impressions (views) their advertisement receives.
These are content producers who are not necessarily traditional influencers but have the skills and ability to create engaging UGC ads.
Important: creators are different from influencers. That’s because they don’t typically focus on building a large following or personal brand. Instead, they use their skills to create content that resonates with a specific audience or demographic. Creators may have expertise in content creation, such as video production, photography, or graphic design. You can source them on social media or freelance marketplaces like Fiverr & Upwork.
A document that you provide to content creators, influencers, or advertisers outlining the objectives, guidelines, and expectations for a specific piece of content or campaign. This should be comprehensive enough to ensure brand alignment, while still giving creators the freedom to experiment.
The level of interaction and involvement that users have with a piece of content or advertisement, typically measured through actions like clicks, likes, shares, comments, and time spent viewing.
The first few seconds of an ad, designed to catch the audience’s attention quickly and effectively. For video ad creatives, the hook is the most critical part of the ad.
A measurement of how well your content captures and retains the audience’s attention during the initial moments of an ad. To calculate your hook rate, divide the number of people who viewed your ad beyond the hook by the total number of views. Most creators would consider a score above 25% to be a good hook rate.
The total number of times an advertisement is displayed to users, regardless of clicks or engagement. This figure gives you an idea of the overall reach of your ads.
A strategy where individuals with influence and reach on social media or other platforms promote or endorse products and services to their followers. This form of marketing is generally much more expensive than working with creators. In addition, it may not actually deliver a satisfactory ROI if your goal is to create authentic UGC that don’t look and feel like regular ads.
Key Performance Indicator (KPI)
A measurable value that demonstrates the effectiveness of a campaign or strategy in achieving its objectives. In the context of UGC advertising, ROAS, CPM, CTR and CPA are some of the most critical KPIs.
This term refers to ads that mimic the appearance and style of the content surrounding them. These ads provide a seamless and non-disruptive experience for viewers. The goal of using ads like this is to be more relatable, and avoid giving viewers the feeling that they are being targeted by advertisers. Unlike most ads, native ads aren’t marked as “promoted”.
The total number of unique individuals who are exposed to an advertisement or campaign during a specified time frame.
This is a strategy where advertisers serve ads to individuals who have previously engaged with their content or visited their website. The goal of this strategy is to encourage first-time buyers to make their first order, or generate repeat purchases.
Return on Ad Spend (ROAS)
A metric used to measure the revenue generated for every dollar spent on advertising. It helps advertisers understand the effectiveness of their ad spend.
For example, if your UGC ad campaign cost $2,000 and generated $10,000 in revenue, your ROAS is 5, indicating that for every $1 spent, you earned $5 in revenue. A ROAS above 1 is profitable, while below 1 is not. Use ROAS to optimize ad performance and set benchmarks based on your goals. Accurate tracking and attribution are essential for calculating ROAS correctly.
Return on Investment (ROI)
This is the ratio of net profit to cost of investment in a campaign or strategy. You can use this ratio to evaluate the financial return of total advertising efforts. This calculation includes a broad range of factors including ad spend, salaries and any relevant tech.
User-Generated Content (UGC)
Strictly speaking, UGC is any content, such as images, videos, reviews, or social media posts, that unpaid people create. This usually means customers or fans of a brand. Effective ad creatives and UGC ads are sponsored ads that mimic the authenticity of pure UGC.
These are ads that feature real users of your product. It can also describe ads that feature creators using a product in a way that looks and feels organic.
This is a mutual arrangement between creators and brands. The creator grants a brand advertising permissions to their social media account so that the brand can run paid ads through the creator’s profile. In exchange, the brand benefits from the creator’s reach, and the creator benefits from paid exposure to the brand’s target audience.
Leverage the Power of UGC Ads with an Expert Ad Creative Agency Team
Hustler Marketing’s Ad Creatives Team works with eCommerce brands to develop engaging ads that reach customers in the digital spaces they love. Follow team lead Iveta Makedonska for expert ad creative insights, or book a free call to meet the team yourself, including our in-house Facebook ad buyer. They’ll take a deep dive into your ads strategy, or help you to create one from scratch.