In the participatory world of Web2.0 (Musser and O’Reilly, 2006), millions of common people have started publishing their own brand-related content. As evidenced by YouTube videos, Facebook groups, Twitter messages, Wikipedia articles, Amazon book reviews and other social media activities, such amateur pieces may achieve significant reach. Instead of only monitoring this grassroots movement, more and more branded companies aim at actively participating in it (Christodoulides, 2008).

The effectiveness of such participatory programs, however, has not been explored in depth so far. Academic literature on user-generated content (UGC) in general is still considered to be in its initial phase (Stöckl et al, 2008). What is published is often rather anecdotal: From a brand community perspective, Muniz and Schau, 2007 analyzed unpaid marketing efforts of brand loyalists within their ‘vigilante marketing’ approach. Kozinets, 2008 identified pro-active and prompted patterns of consumer feedback, referring to ‘eTribalized branding’. From an ‘open source brand’ perspective, Pitt et al (2006) explored the nature of non-proprietary brands such as Linux compared to traditional brands. However, from my point of view none of these academics covered the full picture of UGC. The question remains, how effective are participatory web programs? I would like to briefly introduce the concept of user-generated branding (UGB) in order to answer this question.

UGB is rooted in the theoretical framework of the identity-based brand management approach (for example, Burmann et al, 2009). This approach takes into account both the brand perception by external stakeholders – referred to as brand image – and the self-reflection of a brand by internal stakeholders – called brand identity. By considering the inside-out perspective as equally relevant to the outside-in perspective, this approach differs fundamentally from the preceding one-sided image-oriented models, leading to an enhanced brand management understanding (De Chernatony, 2006).

With regard to UGC-related problems, the identity-based brand management approach is particularly suitable, as it stresses on the brand's interaction capability. Brand identity is constituted by both the interactions among internal stakeholders and their interactions with external target groups.

As in the Web2.0 era not meeting the brand promise is punished quicker, more consequently and with farther reach, the requirements for internal brand management are increasing. If employees and intermediaries ‘live the brand’, negative brand-related UGC may be counteracted and positive grassroots brand messages can be evoked. On the other hand, the identity-based brand management approach explicitly considers consumer-to-consumer interaction. User-generated brand messages are regarded as brand touch points next to corporate communication efforts, affecting a consumer's brand experience and brand expectations.

UGB can be defined as … the strategic and operative management of brand related user-generated content (UGC) to achieve brand goals’ (Burmann and Arnhold, 2009, p. 66). That is, UGB is understood as the handling of all kinds of voluntarily created and publicly distributed brand messages undertaken by non-marketers – from original user comments to reviews, ratings and remixes with corporate messages, to even full artistic work. This UGC might represent both expression of customer complaint and brand fan dedication. It might be visualized as text, image, audio or video and distributed not only via Web2.0 platforms such as blogs, review, video sharing and social networking sites, but also via mobile devices (Wunsch-Vincent and Vickery, 2007).

Aspects of UGB are tapped by other user-centered research fields: User innovation concepts such as prosumers (Toffler, 1980), lead users (Von Hippel, 1986) and open source (for example, Von Krogh and von Hippel, 2006) provide findings about users who create and innovate. Collective intelligence studies that comprise buzz words such as wisdom of crowds (Surowiecki, 2004) and wikinomics (Tapscott and Williams, 2006) deal with users who collaborate and share. Word-of-mouth research (for example, Gladwell, 2001) contributes insights regarding spreading the word on brands. Brand and online community studies (for example, Muniz and O’Guinn, 2001; McAlexander et al, 2002) focus on networks of users around brands and shared interests. In order to specify UGB, findings from open source, word-of-mouth and community studies, as well as UGC-related approaches in advertising and branding, proved to be most valuable.

However, UGB shall not be equated with existing terms: Unlike mass customization, UGB does not refer to a co-design process within a fixed solution space, but deals with freely created personal brand meaning. Content creators can be regarded as creative consumers (Berthon et al, 2007) but not necessarily as lead users who adopt novel products for own use. As user contributions within the UGB context represent personal interpretations of company-owned brands, UGB is not to be mixed up with non-proprietary open source brands (Pitt et al, 2006).

Similarly, UGB needs to be distinguished from brand communities and word of mouth. While brand communities represent a network of brand fans and word of mouth describes a dissemination channel, UGB refers to brand-related content. This content, however, may be generated within brand communities and disseminated by online word of mouth. Finally, UGB is more than eBranding. While the latter aims at using the channel Internet to present a brand, UGB refers to an online feedback movement beyond conventional top-down brand management behavior.

In terms of managing the consumer feedback, two key UGB approaches can be identified: The handling of natural brand-related UGC, which occurs unprompted without the interference of the marketer, is understood as non-sponsored UGB. It refers to the monitoring of natural brand-related UGC, incorporating the won insights into the brand management process.

On the contrary, brand management may also stimulate brand related UGC by actively asking for consumer contributions through blogs, contests, voting, selected fan contributions or other forms of campaigns. Such management of stimulated UGC is called sponsored UGB. As the brand manager may set up the program rules, the user contributions may be canalized but not controlled. In addition to applied market research, the main objective of sponsored UGB is idea generation. As it fosters the brand–consumer interaction, it may also be used as an instrument for customer acquisition and customer retention.

On the basis of this background, it seems that stimulating UGC is a very effective branding tool. Sponsored UGB programs should be promoted as symbols of open brand communication, highlighting the brand transparency and responsibility principles. If this ‘open door’ idea takes center stage, sponsored UGB programs may have mass market and ‘offline’ appeal. For instance, mass approval of a corporate blog could be reached by positioning it primarily as a forum to talk to the makers; a brand community could be primarily understood as a market place for peer-to-peer storytelling.

Given the comparable effect size of UGB activities compared to classic branding measures (Arnhold, 2010), sponsored UGB programs can be considered as equal value instruments in the brand communication mix. UGB is thereby not only an effective but also efficient tool. As cost of setting up a UGB program website is apparently lower than running a TV prime-time advertising campaign, saving potentials could be reached if branded companies lowered the share of traditional mass media marketing spend in favor of UGB programs. A further advantage of sponsored UGB over classic brand communication tools is the traceability of consumer contact. Given the participatory nature of UGB programs, immediate quantitative feedback regarding program reach and qualitative feedback in terms of brand message understanding is provided.

However, UGB participation and awareness rates are often observed to be still low, in particular if a brand's UGB program was not announced via mass media. That is, sponsored UGB programs depend to a considerable extent on traditional mass media campaigns to get reach. In addition, UGB programs cannot replace existing instruments. For long-term brand building, for instance, TV commercials with recurring icons and claims are often more powerful.

Given the early stage of UGB development, there is sufficient room for future research. On the one hand, it should be investigated whether sponsored UGB only suits volume brands or if it is also applicable to premium and luxury brands. In addition, other traditional brand communication instruments should be integrated in order to identify the effect of sponsored UGB programs in combination with other brand management tools.

On the other hand, researchers may address themselves to a wider set of UGB facets. While most researchers so far focus on the impact on consumers, studies are needed to validate UGB effectiveness within the business-to-business context and regarding the internal target group. In particular, the role of UGB programs in strengthening a brand's organizational interaction capability is of interest. Furthermore, it should be investigated as to which organizational structures and branding activities might be suitable to evoke positive UGC.

Apart from the market-oriented effect side, research should also be conducted on the cause side. Future studies should work on identifying success factors for UGB program quality, as well as motivational drivers for UGB program participation. Special attention should be paid to peer-to-peer interactions (P2P). Studies should explore to what extent P2P affects the liking of sponsored UGB programs, as well as the quality of UGC.

Furthermore, the huge field of non-sponsored UGB occurring without the interference of the branded company is still widely untapped. On the one hand, existing social media monitoring approaches should be related to the strategic and operative brand management process, showing how to benefit from those grassroots messages. On the other hand, virally distributed anti-brand content deserves much closer attention. Studies should aim at developing an ‘alarm system’ telling branded companies at what stage and by which means they should react to these off-brand messages.