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User-generated content and word of mouth spread by social media are changing the landscape of advertising. Companies are strategizing using these non-traditional methods and already seeing results. Read more about this in the full article from The Street.

You've probably seen the ads. A mom and dad, camcorder in hand, surprise their kids: They are off to Disney World.

The peals of laughter and squeals of joy are real in a way paid actors might not easily mimic. The shaky, average-quality video adds to the aura of reality. For many, the "home movie" approach achieves its intent: to make watchers imagine the reaction their own kids will have.

Disney's (DIS) commercials are just one way companies are seeking out user-generated content to connect with an audience addicted to social media sharing.

Companies have long known word of mouth is among the most powerful tools in building and maintaining a brand's reputation. Social media now offers them a way to leverage an army of users to do what Madison Avenue can't do as directly. Twitter tweets, Facebook status updates and Yelp postings sing the praises -- or lament the failings -- of restaurants, products and companies. Reviews, musings and even fanboy evangelism can also take the form of online videos made with webcams, pocket camcorders and smartphones. Low-tech or bad lighting? It's all good. It can even add that dose of authenticity and realism -- think Blair Witch Project meets Mad Men.

Scott Creamer, founder and CEO of The Screamer Co., an Austin-based advertising and marketing firm, describes Disney's recent ad campaign as a "natural extension" of the popular, long-running "I'm going to Disneyland" ads.

"Disney is leading the way with user-generated advertising in their 'home video' commercials," he says. "This continues to be fueled by the social networking phenomenon and the shift in mindset that, in turn, has driven people to become actively engaged in generating their own content and sharing it with an international audience on the Web."

Creamer sees the use of user-generated content as evolving.

"There is a natural fluctuation as people figure out how to use it," he says. "For years, almost everybody has used some sort of user content. We've all done a review, or posted something on Facebook. Even if you haven't uploaded a video to YouTube, you've still watched them. Now, [companies] are trying to figure out how to utilize the people using content ... People are testing out user-generated content and asking how they can utilize it, especially with a younger audience that is adapting to technology quickly."

"From a marketing perspective, using user-generated content is absolutely brilliant and usually a lot less expensive for a company," he says. "User-generated content owes part of its popularity to society's increasing agility at working with video and audio tools at home to mimic what television studios do for hefty fees."

The strategies go beyond just finding or soliciting video content.

Creamer cites a Super Bowl ad campaign by Doritos (owned by Pepsi(PEP_)) as a shrewd approach for achieving "a much larger campaign that engages consumers." Online, people submitted ideas, offered content and voted for which of the finished pieces would make it to broadcast. Then, even more mileage was had by keeping the discussion alive on the Doritos website with debates over which commercials did, or didn't, work and why.

"It was interesting that even the prep to that, the build to that, was consumer engagement," Creamer says. "The spot is just the end result. It really de-emphasized the commercial itself, because the process leading up to it was all user generated. The commercials themselves are just this leveraging fulcrum in the middle and a catalyst for discussions."

Not just content with seeking out content, companies are starting to play a larger role in shaping it.

Zooppa -- the name is Italian for soup -- began in Europe five years ago, based in Venice, Italy. It expanded into Brazil and now the U.S. with a North American headquarters in Seattle. For big-name clients such as Samsung (for its Galaxy Tab), Microsoft (MSFT), Amazon (AMZN), AT&T (T), Jones Soda (JSDA), Google (GOOG), Wired magazine and Sun Microsystems (JAVA), the company serves as a middleman for user-generated content, bringing companies and consumers together for mutual benefit.

Wil Merritt, an 18-year veteran of Time Warner (TWX) and former publisher of Time magazine's European edition, is Zooppa's North American CEO. He said his reaction after being introduced to the company's business model was to declare it "the future of advertising."

"I came from big media and traditional advertising," he says. "This all struck me as something that shows where things are going."

Zooppa bills itself as "the global social network for creative talent" and the world's largest source of user-generated advertising. It partners with companies to give its members opportunities to create great ads for leading brands. Companies develop a creative brief describing their brand's attributes, the target audience and the objectives of the campaign. Participants are invited to create ads in various formats -- producing a video, designing an animated sequence, creating a print ad, even writing scripts or concepts for potential ads.

Once members upload their content, cash prizes are awarded to creators with the highest-rated ads. Additional prizes are awarded by the brands themselves and by Zooppa's staff.

The contest and open submission model are intended to be an equalizer. Those trying to break into the world of advertising can parlay a successful submission into a door-opening calling card.

"More important than the cash is the recognition and legitimacy that it gives," Merritt says. "We know a lot of members have had job offers. That's a big benefit."

For companies, widening their net into the pool of creative talent has distinct benefits. These are "people on the cutting edge of digital communication," he says. "They don't break traditional rules, so much as bypass them."

"This is very different from the kind of advertising I grew up with, where we ran the same commercial for 5,000 times on TV," Merritt says. "I have three teenagers at home, and they won't put up with that. They don't even watch a TV, they watch everything on their laptops and then they immediately click off if they don't like it. Unless it is something that captures their imagination, or is made by a friend or someone they know, they stop watching."

Bringing the general public into the process creates the sort of "word of mouth effect" that even the biggest ad budget can't guarantee, Merritt says. It's a bottom-up, rather than top-down approach that allows a company to see how its brand and products are perceived, then benefit from the tell-two-friends multiplicity of a shared social media experience.

The commercials themselves vary tremendously -- in terms of message, approach and broadcast "quality." Some are no more than webcam testimonials; others, more elaborate and polished, have the imprint of professionals. Some incorporate established logos and jingles to reinforce the brand; others set those familiar trappings aside and rely more on story-telling and personal anecdote, betting on authenticity over time-tested Madison Avenue tropes.

"There is no committee, you do what you want, it goes right up and that's it," Merritt says of the appeal for advertising professionals. "It is unvarnished and refreshing. I think the YouTube generation now is used to that style of communication, where it is not artificial and polished, it is just more genuine."

This article was republished with permission from The Street.