UGC is growing—but can it overtake traditional influencer marketing?

Influencer rates are rising, brands are seeking communities, and people—particularly Gen Z—are growing wary of influencers’ promoted products.

In response, some marketers—particularly those in the CPG and retail space—are banking on user-generated content (UGC) to reach social audiences, encouraging people without huge followings to post about products in what may appear to be more authentic than influencer posts while also likely saving money on rates.

Some in the space said UGC has the power to replace big-budget influencer deals, while others argued it’s more of a supplement to engage audiences at all levels.

A new form of cash back?

UGC can have different meanings and can take different forms; sometimes, it just involves a brand reposting content from a user who’s tagged them.

Some companies have recently taken steps to formalize it a bit more. Isha Patel is the CEO and co-founder of Kale, a platform that pays users in exchange for social posts about products. The amount paid out is based on an algorithm that considers things like how much engagement the post gets in the first 24 hours–48 hours, and the “quality and relevance of the audience,” Patel said. She told us that she believes UGC has “already overtaken influencer [marketing]” in popularity given the number of UGC creators she sees post on a daily basis. Patel confirmed that Kale has accrued more than 50,000 UGC creators on its platform since starting in 2021.

“There’s a lot of discourse on the internet around, ‘Everyone wants to be an influencer. Everyone wants free products,’” Patel said. “Really, what we found is there is a certain class of brands that people really love and they want to participate with them. They want to codesign and co-innovate, get feedback; they want to participate in the narrative of that brand.”

Patel said people who don’t want to quit their job to make content for a living but are still interested in posting about a brand and making money on the side are “often overlooked.” While Kale “has vetting in place to make sure it is safe and inclusive,” she said there are no follower minimums given that anyone can go viral on platforms like TikTok.

In one instance, it worked with Free People to promote its clothing collab with the Amazon Prime show Daisy Jones & The Six, encouraging creators to post outfits inspired by the show as part of a social media challenge, Patel said.

Patel said the ethos of Kale is, “Instead of paying one big influencer tens of thousands of dollars, how about you take that money and spread it among your long tail of customer enthusiasts?”

TikTok debuted a feature earlier this year that similarly rewards users for creating posts for brands: Its “Creative Challenge” lets users who meet certain criteria “submit video ads to brand challenges.” These videos don’t show up on a creator’s profile but instead run as in-feed ads, and users can earn money based on the ad’s performance.

Quantity versus quality

But does quantity always outweigh a single high-quality partnership? While she’s seen more interest in UGC, Therese Little, head of sales, Americas, at influencer marketing platform Traackr, told us UGC is more of an addition to the traditional influencer marketing mix, rather than a replacement.

“I do think it’s more concretely in the fold of every robust influencer strategy now, where it used to be sometimes sitting in a different area of the organization or not thought of in the same way,” Little said.

However, she said the same way there’s space for nanoinfluencers and UGC creators, there’s space for mid-tier influencers and celebrity partnerships. “It’s just an extension of how we think about influencer and creator partnerships and the imperative to make those across tiers of individuals,” she said.

But the potential benefits of UGC can come at the expense of creative control, Chris Jacks, director of growth strategy at influencer marketing agency HireInfluence, told us.

“The benefit of contracting an influencer is you can be very clear with what the brand brief and posting guidelines are, and there’s the expectation that those are followed,” Jacks said, while with UGC, there can be “less control over what that end product looks like.”

Little agreed, adding that influencer contracts often have stricter vetting around things like values and aesthetics. However, she said those fears are a “necessary evil” for brands taking a multifaceted approach to creator and influencer marketing.

“You can’t not think about UGC,” Little said. “It’s going to happen whether you’re thinking about it or not. So are you going to be an active participant, or are you going to hide from it?”