NEW: David Trewern

With Web 2.0, feedback and advocacy comes faster than ever before, speeding up the evolution (or extinction) of brands.

User-generated content: Friend and foe for leading brands

Web 2.0 is all about communities and conversations. Online communities comprise any combination of consumer, company representative, advocate, publisher or critic.

Conversations can be “one to one”, “one to many”, “many to many” or even “many to one”. Specific examples include social networking and broadcasting, blogging, corporate podcasts, discussion forums and user reviews. User-generated content makes the world bigger and smaller at the same time.

Web 2.0 applications facilitate and encourage consumers to become content publishers. People love to have a voice, and consumers often look to the broader community for endorsement and approval before making purchasing decisions. Increasingly, purchasers go online to gain the view of the “community” before booking a holiday or buying a plasma TV.

But what does user-generated content mean for brands? It can have a potentially devastating impact for brands. But of course only if a company has got something to hide, or does not deserve the position that may have been created for it by clever marketing.

Consumer content makes it even harder for brands to achieve the “cut through” required to communicate clear messages and shape market perceptions. In fact many large companies are losing control of their messages to the masses.

It’s now common for a Google search to yield a user-generated Wikepedia page near the top of the results, sometimes above the official website for the brand or product in question. Of course the Wikepedia page contains the description that has been created and agreed to by the community, which may differ greatly from the official marketing blurb.

On the other hand, companies and products that create value for their customers and offer exceptional service can shine in this transparent new world of the online advocate.

And it’s very difficult to cheat the system against the overwhelming might of the collective. Positive customer testimonials, ratings and legitimate endorsements can be much more powerful than the advertising that has built many great companies over the past 60 years.

So what should companies do in this brave new world? They should stick to what they do best; create valuable and relevant products and offer a level of service that results in advocacy from every customer. This means being an approachable brand that listens to customers and invites feedback. In the online world the feedback loop can be closed in record time.

Traditional advertising still has a very important role to play in building the brands of the future. But advertising must be more honest than ever before. One wrong move can set the bloggers on fire.

Rather than the hard sell, marketers needs to create positive stories and experiences that create positive karma and halos around brands. Brands are easier to knock and hate than ever before, but can verge on religious when the values, messages and products of a company resonate with customers. Think Apple computer.

User-generated content is a truly great thing. It’s great for brands and for the broader economy. Market forces in our capitalist society have always rewarded good companies and forced out of touch companies to reinvent themselves or get out of the way.

In the 2007 BRANDZ top 100 ranking, Google was listed as the most valuable brand on the planet. Never before has a brand become so powerful so quickly. It’s very fitting that the mother of online user empowerment has been so empowered by its own invention.

While Google has only been incorporated for nine years, the average age of the next nine brands on the list is 93 years.

But of course our online powered world of instant celebrity can also work against brands. Online privacy concerns and ACCC court cases could very quickly undo Google’s hard work, turning the company that “does no evil” into the evil empire literally overnight.

With Web 2.0, feedback and advocacy comes faster than ever before, speeding up the evolution (or extinction) of brands.

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