UGC Ads: What Are They, And How Can Your Brand Benefit?

“What’s up with this UGC ads thing? Is it just another random business acronym?”

If that’s what comes to your mind when you hear the term, “UGC ad,” you’re not alone. But it’s not just another way to run ads– it’s one of the most effective digital ad formats out there– and we’re here to help you learn everything you need to know about them.

UGC is an acronym that stands for User-Generated Content. We’ll cover it in-depth later in this article but for now, just think of it as content that customers make for your brand.

Besides explaining what UGC ads are, we’ll give you examples of what they look like, and explain why they’re some of the best-performing ads you can run for your brand. We’ll also peel back the curtain and give you the 3 metrics we measure to decide the success of a UGC ad campaign.

Did you catch that? We’re revealing the secrets of how to measure your UGC ad campaign results.

You might not expect that from a company that makes its living connecting brands with UGC content creators, but we want your brand to succeed– that’s why we created Clip in the first place.

So, let’s talk get to it!

But what are UGC ads?

UGC Facebook Ads, UGC TikTok ads… You’ve probably heard these terms before, but what are they?

Put simply: UGC ads are ads on social media (whether that’s Meta, TikTok, Snapchat, or even Pinterest) that feature user-generated content, or UGC.

UGC isn’t a secret formula for success… It’s just ads featuring UGC creators who love trying new products and are fans of specific brands. Once they try the products, they create UGC videos for these brands, and the brands use them to advertise.

UGC ads can be either video ads or photo/static ads.

Okay, now that you know what UGC is, let’s talk about how running using it in ads can build your brand.

How can your brand benefit from UGC ads?

Running UGC ads can bring several benefits to your brand:

Your brand will be perceived as more authentic and consumer-conscious

UGC ads from content creators are more trustworthy and authentic than other types of ads in the minds of most consumers.

Why?

Because the people making the content are true brand fans, not influencers or video creation studios who are paid to say positive things.

The best UGC ads incorporate raw videos and opinions on products, and that lack of over-the-top polish rings true. In the world of social media, where everyone is trying to sell you something, raw opinions are like a goldmine.

And when your marketing is perceived as more trustworthy and authentic, your brand will be too. It’s a win-win situation that leads to better sales and more brand appeal.

Better ad performance will result in more sales

In general, UGC ads perform better than ads with branded content. You’ll be able to see this in metrics like CTR (click-through rate), CVR (conversion rate), or the cost per purchase.

As with any ad campaign, you’ll still need to experiment with the creative to find winners. However, studies show that UGC tends to perform 3x better than branded ads, which means you’ll have more sales– if not initially, then down the road.

You get to engage more with potential customers and gain their trust

Ads featuring UGC tend to get more engagement from potential customers– more comments, direct messages, etc. This is an opportunity to make a super good impression, so your brand sticks in their mind as their first choice when they need something your company sells. Just make sure to respond to comments, believe it or not, many brands ignore this.

UGC video ads examples

Now that you’ve learned about their benefits, let’s get super practical and give you examples of the best types of UGC ads.

Our goal with this section is simple: to give you realistic examples of ads you can run for your company, right now.

If you search for UGC ad examples, you’ll see people talking about Coca-Cola or Airbnb. While their campaigns are cool, they’re hard to reproduce or be inspired by, because they have so many resources at their disposal. These brands have millions of dollars in budgets, so it’s not like they have to be super strategic about how they collect UGC.

So instead of trying to help you find “inspiration” in examples you can’t hope to replicate, let’s break down the three categories of UGC video ads.

After you see the examples below, start thinking: How can you get something similar for your brand?

Testimonial ads

These ads are testimonials or reviews from current customers or content creators who love your products. They simply tell others how good your products are– and they’re very effective as ads.

How-to ads

These ads feature how-to videos. They’re generally a bit longer, but they explain how to use a product and give insights into the process. There’s nothing super complicated here– except that the videos DO need to be captivating for people to keep watching.

Unboxing ads

Unboxing ads feature videos where creators unbox a product. They’re super popular, especially for e-commerce brands and especially on TikTok. Everyone loves a good surprise, so an unboxing video reels them in and makes them stay to see what the product is going to look like.

Other blogs and websites categorize UGC video ads in many different ways, but at their core, they fall into one of these three categories (obviously with slight variations). Some people prefer to categorize them by their placement and platform (for example, we have seen Spark Ads, which is a TikTok ad, labeled as a type of UGC ad), but we prefer to keep things simple.

What metrics should you look at when measuring success for UGC ads?

This is the secret we promised at the beginning of this article– how you’ll know if your UGC ads are successful. We won’t make you wait a minute longer.

The 3 metrics you can follow to measure the success of your UGC ads

1. CTR or click-through rate. This tells you the percentage of people that click your ads. In general, above 1% is considered good. Pro tip: Look at the “outbound CTR,” not the regular CTR. Outbound CTR measures all the clicks that go to your website. Regular CTR measures all the clicks people make– including to the ad itself, or your profile so that is misleading.If you’re trying to drive traffic to your website, you don’t need extra clicks messing up the numbers.
2. Purchases, checkouts initiated, and registrations. UGC ads tend to perform better, so you should see these numbers go up. Don’t just look at purchases– check other metrics in your marketing funnel too, like checkouts initiated, registrations, or adds to cart. This will give you an idea of where people are getting stuck in your funnel.
3. Cost per purchase, per checkout initiated, or registration. How much does it cost to make one viewer into a purchaser? This is the most important metric to watch for.

That’s it! Once you know how to measure the success of your UGC ads, you’ll be ready to test, tweak, and improve every single ad campaign.

If you need help getting UGC content for your brand, we’d love for you to check Clip out. We connect brands (like yours!) with home studio creators who make top-performing UGC content. You pay per video, and there are no contracts, ever.

Curious? Book a demo today.