why has UGC become an MLM?

Summary

In this video, Amanda from Swell Entertainment discusses the rise of user-generated content (UGC) and micro-influencers, questioning the sustainability of making money from UGC without a strong social media following. She critiques the trend of creators selling courses on UGC, suggesting it's more profitable than the content itself. Amanda also addresses the oversaturation and potential legal risks in the UGC market, advocating for building a genuine audience and community over quick financial gains.

Takeaways

• 😀 The video discusses the trend of individuals attempting to profit from content creation without establishing a substantial following.
• 📈 Amanda, the host of Swell Entertainment, critiques the rise of micro-influencers and the often unrealistic promises of financial success through user-generated content (UGC).
• 💰 There's skepticism about the financial viability of UGC, with Amanda noting a lack of evidence supporting the large-scale earning potential claimed by some.
• 📚 Amanda differentiates between UGC and influencer marketing, emphasizing that UGC traditionally lacks personal identifiers and is more about product promotion.
• 🤔 The video questions the sustainability of UGC as a career, suggesting that the market may be oversaturated and that the income is not as stable as some might believe.
• 🔍 Amanda expresses concern over the potential legal and regulatory risks associated with UGC, including the necessity for proper disclosure and copyright issues.
• 📉 There's a prediction that the value brands place on UGC may decrease, especially if the content leads to negative consumer feedback or if there's a crackdown on influencer marketing practices.
• 📝 The script highlights the importance of content creators understanding the business side of their work to avoid being exploited or facing legal repercussions.
• 💬 Amanda calls for a more authentic and community-driven approach to content creation, rather than focusing solely on monetization through brand deals and UGC.
• 🔑 The video concludes with a call to action for viewers to reflect on the cult-like aspects of UGC promotion and to consider the long-term implications of relying on it as a primary income source.

Q & A

What is the main concern Amanda raises about people entering content creation without the ability to build a following?

Amanda is concerned that many people are attempting to make money from content creation, specifically through user-generated content (UGC), without first establishing a substantial audience or social media following, which she implies is a risky and potentially unsustainable approach.

What does Amanda think about the current trend of micro-influencers promoting UGC?

Amanda is skeptical about the trend of micro-influencers promoting UGC, suggesting that it resembles a pyramid scheme where many are enticed by the promise of easy money, but the actual earning potential and sustainability are questionable.

Why does Amanda believe that selling courses on UGC might be more lucrative than the UGC content itself?

Amanda points out that some individuals make more money from selling courses about creating UGC than from the UGC content itself, as the courses capitalize on the desire of others to enter the UGC market, creating a secondary income stream that may be more profitable.

What is Amanda's definition of user-generated content (UGC) in the context of social media?

Amanda defines UGC as content created by users for brands with the express purpose of promoting a product, typically without putting any personal identity into it, and often without the need for a large social media following.

How does Amanda differentiate between UGC and influencer marketing?

Amanda differentiates UGC from influencer marketing by noting that UGC does not necessarily require a following or personal branding, whereas influencer marketing involves a creator with an established audience, and the content is contingent on their influence and relationship with their audience.

What is Amanda's view on the sustainability of a career based solely on UGC creation?

Amanda expresses doubt about the sustainability of a career based solely on UGC creation, suggesting that it is an oversaturated market and that the income from UGC can be precarious, especially with potential legal and regulatory changes on the horizon.

Why does Amanda mention the potential legal issues surrounding UGC content creation?

Amanda mentions potential legal issues to highlight the risks of UGC content creation, such as copyright infringement when using music or other copyrighted material without proper licenses, and the importance of clear contracts to protect creators' interests.

What does Amanda suggest as an alternative to solely focusing on UGC for income?

Amanda suggests that building a strong personal brand and community is a more sustainable approach than solely focusing on UGC for income, as it provides a more stable foundation and allows creators to have more control over their content and audience.

How does Amanda feel about the current state of influencer marketing and its impact on UGC creators?

Amanda is critical of the current state of influencer marketing, particularly how it may be affecting UGC creators by potentially oversaturating the market and misleading them into believing that UGC creation is a get-rich-quick scheme.

What is Amanda's opinion on the future of UGC in relation to influencer marketing and brand deals?

While Amanda acknowledges that UGC is not going away, she is cautious about its future, especially in relation to influencer marketing and brand deals, due to the potential for market oversaturation, legal challenges, and changes in consumer trust and regulatory guidelines.

Outlines

00:00

📈 The Mirage of Micro-Influencer Wealth Through UGC

Amanda from Swell Entertainment addresses the allure and pitfalls of micro-influencer culture, particularly focusing on user-generated content (UGC). She critiques the trend of individuals attempting to profit from UGC without a substantial social media following. Amanda discusses her skepticism regarding the financial success stories shared by micro-influencers, especially when they pivot to selling courses on UGC creation. She distinguishes UGC from influencer marketing, emphasizing that UGC traditionally lacks personal identifiers and is meant to promote products without injecting the creator's personality. Amanda also touches on the blurred lines between micro-influencer work and pyramid schemes, suggesting that the focus should be on building a genuine audience and community rather than merely chasing free products and quick monetary gains.

05:01

🤔 The Flimsy Foundation of Micro-Influencer Platforms

Amanda delves deeper into the micro-influencer phenomenon, questioning the sustainability of their platforms which are built primarily to attract brand deals rather than to foster a loyal following. She contrasts this with her own experience as a mid-sized YouTube creator who earns a substantial income from content and brand collaborations. Amanda expresses concerns about the broader impact of economic recession on influencer marketing, suggesting that brands are becoming more cautious with their partnerships. She also points out the irony of micro-influencers being followed mainly by peers, questioning the authenticity of their engagement. Amanda advocates for creators to aim for more than just being a 'storefront' for products and to build a meaningful digital presence.

10:02

📱 The Replaceable Nature of UGC Creators

In this segment, Amanda discusses the replaceability of UGC creators, emphasizing that while individual creators may be unique, the content they produce is not irreplaceable. She uses herself as an example, noting that while her personal brand is distinct, the UGC she creates could theoretically be replicated by others. Amanda also addresses the potential risks and legal issues surrounding UGC, suggesting that creators should be wary of over-saturating the market and relying solely on UGC for income. She mentions her own experiences with brands and the importance of maintaining control over one's content and relationships with brands.

15:03

💸 The Lucrative yet Questionable Rise of UGC in Advertising

Amanda explores the increasing demand for UGC in advertising, highlighting how brands are leveraging it for its perceived authenticity and cost-effectiveness. She references an influencer's claim of earning $4,000 in a month through UGC and the subsequent influx of videos promoting UGC as a lucrative side hustle. Amanda critiques the idea that UGC is a new concept, sharing her own past experiences with brands seeking UGC. She also expresses skepticism about the long-term viability of UGC, suggesting that it may eventually be viewed as just another form of sponsored content.

20:04

⚖️ Navigating the Legal and Ethical Minefield of UGC

Amanda addresses the legal and ethical considerations of UGC, particularly the importance of proper disclosure and copyright compliance. She discusses recent lawsuits involving the unauthorized use of music in influencer content and the potential for similar issues with UGC. Amanda stresses the need for creators to be their own advocates and to understand the business aspects of their work to avoid being exploited. She also speculates on the possibility of increased FTC scrutiny and regulation of social media marketing, which could significantly impact UGC creators.

25:06

🌪️ The Cult-like Hype and Oversaturation of UGC

In the final paragraph, Amanda likens the current UGC trend to a cult, criticizing the hype and oversaturation of UGC content on social media. She warns of the potential downfall of UGC's perceived authenticity and the risks associated with relying on it as a primary income source. Amanda also reflects on her own experiences and the potential consequences of the FTC's crackdown on improper ad disclosures. She concludes by reiterating the importance of building a genuine community and the unpredictability of relying solely on UGC for financial stability.

Keywords

💡Micro-influencers

Micro-influencers are individuals with a smaller, but highly engaged social media following, typically ranging from a few thousand to tens of thousands of followers. In the context of the video, the speaker expresses skepticism about the sustainability of making a significant income as a micro-influencer without a substantial following, highlighting the potential pitfalls and the allure of selling courses as a more lucrative venture than actual user-generated content creation.

💡User-Generated Content (UGC)

User-generated content refers to various forms of content, such as videos, photos, and written posts, created by users for social media platforms. The video discusses UGC in the context of content creation for brands without the need for a creator's personal brand or following, contrasting it with influencer marketing where the creator's personal audience is a key factor.

💡Influencer Marketing

Influencer marketing is a form of social media marketing involving endorsements and product placements from influencers to promote a brand. The video script differentiates influencer marketing from UGC, emphasizing that the former relies on the influencer's established audience and personal connection with their followers, whereas the latter may not require such a connection.

💡Cult of Micro-influencers

The term 'cult' in the video is used metaphorically to describe the rapid and somewhat cult-like following that the concept of micro-influencerism has garnered. It suggests a situation where new creators are drawn to the idea of easy success and income through UGC, often without fully understanding the market dynamics or the potential risks involved.

💡Courses and Workshops

Courses and workshops are mentioned in the script as a common monetization strategy among micro-influencers and UGC creators. The speaker critiques this trend, suggesting that some creators may profit more from selling courses about UGC creation than from the actual content creation itself, which could be a sign of an unsustainable business model.

💡Manufactured Authenticity

Manufactured authenticity refers to the creation of content that appears genuine or authentic but is actually crafted for commercial purposes. The video discusses how UGC is sometimes marketed as more authentic than traditional ads, even though it may be just as calculated and produced.

💡MLM (Multi-Level Marketing) Language

MLM language in the video refers to the persuasive and招募性 language often used in multi-level marketing schemes. The speaker draws parallels between the recruitment tactics seen in MLMs and the way some UGC creators promote their courses and opportunities, suggesting a potentially exploitative approach to attracting new creators.

💡Sponsored Content

Sponsored content is when a brand pays a creator to produce content featuring or promoting the brand's products or services. The video contrasts sponsored content with UGC, noting that while sponsored content is clearly branded and tied to the creator's personal brand, UGC may not require such a direct association with the creator.

💡Legal Issues in UGC

Legal issues in UGC pertain to the rights, permissions, and regulations surrounding the use of content, music, and other intellectual properties in UGC. The video script warns of potential lawsuits and regulatory crackdowns that could impact UGC creators, especially if they use copyrighted material without proper licenses.

💡FTC Regulations

FTC regulations refer to guidelines set by the Federal Trade Commission regarding advertising and promotional practices, including disclosure requirements for sponsored content. The video anticipates increased scrutiny and potential penalties for UGC creators who may not adhere to these regulations, particularly concerning transparency and endorsement disclosures.

Highlights

Content creators face challenges making money without building a following.

Micro-influencers are often misled about the potential income from user-generated content (UGC).

UGC is traditionally unbranded and does not feature identifiable personal elements.

Micro-influencers are sometimes pressured into selling courses rather than focusing on content.

User-generated content is not new; it's been part of marketing for decades.

The line between micro-influencer marketing and UGC is blurred and complex.

Economic recessions can significantly impact influencer marketing and UGC income.

UGC creators may face oversaturation and decreasing rates as more people enter the market.

The value brands place on UGC may decrease due to legal challenges or negative public perception.

UGC creators are encouraged to build a strong community and platform for long-term success.

There is a risk of legal issues for UGC creators who do not properly disclose sponsored content.

The FTC is cracking down on violations of ad disclosure rules, which may affect UGC creators.

UGC creators should be cautious about depending solely on brand deals for income.

The future of UGC is uncertain, with potential for both growth and crackdowns.

Creators are advised to be their own advocates and understand the business side of content creation.

The oversaturation of UGC content may lead to a decrease in its effectiveness and profitability.

Transcripts

- There's an ongoing trend here

of people who wanna make money from content creation

without actually having the ability to build a following.

That's it, that's my intro.

I'm Amanda, you're watching Swell Entertainment.

And I know that intro is very harsh,

but I think it's something that should be noted

because I have been thinking about making a video

specifically on micro-influencers for a while.

However, I made the decision to not,

and I just made a little TikTok being like,

"Here's like the risk of you being a micro-influencer."

And now I'm getting way more, (chuckles)

way more UGC content pushed to me specifically on TikTok.

This is where I see most of the original people

who are making tons of money, allegedly.

I have yet to see proof.

This is a very dramatic image to use

because I think that calling this a direct pyramid scheme

is a bit excessive and doesn't fully fit

because though I think that this specific image

is fairly accurate considering one person starts posting

about how they're making money from UGC content,

two to 40 people are like, "Oh my god, that sounds so cool."

I don't make money from that

without having a social media following

with 200 followers on Instagram or whatever the heck.

And then they hear all the money they can make

and all this stuff and then they start adding more

and then they start making content and selling courses

because when they bring up courses, that's where I'm like,

"Ooh, what?"

Then they start having courses,

and then everyone has courses,

and then you're making more money from the courses

than you are making from the actual user-generated content

that you're making that you're promoting

as this is how I'm making all my money.

And then now we have a problem,

a child-shaped problem. (laughs)

I feel like someone's gonna be mad at me

for saying that a triangle is a child shape. (laughs)

What is UGC?

UGC stands for user-generated content.

Amanda, that's like all content on social media.

I know.

You could argue that my reviews,

though I am not specifically working with a brand

and I'm not being paid, are considered UGC.

My brain keeps wanting to say UGC content,

but that's redundant, so I apologize if it slips out.

However, if I do a brand deal here on YouTube,

that is not user-generated content,

that is influencer marketing or a influencer brand deal

because the deal that I got

is contingent on the fact that I have an audience

and I am sharing that content with you,

the audience, for the brand,

and I'm receiving a monetary exchange for that.

User-generated content

does not necessarily need to be posted on your socials.

Most of the time, it's my understanding,

you should not post on your socials.

It's not what they usually want.

Also, user-generated content

traditionally does not have identifying factors in it.

For example, if I am showing a product and they're like,

"Hey, we wanna show that you're a woman using this product."

My face, my identifiable facial features would not be in it.

So say I'm advertising this,

the image would be like this blocking my face,

maybe making sure you don't see my glasses.

But you see that I'm a brunette white chick.

You know, William's gonna be mad

that this is blocking my voice from the mic, probably.

You're basically creating content

with the express purpose of promoting a product

without putting any personality into it.

Okay? Okay.

The reason I bring up micro-influencers

with user-generated content

is because I do think that the line, it's there,

but I don't think it's a super solid line.

Like it's one of those like dot, dash, dot, dash lines

that goes between the two.

Because though, again, micro-influencers,

there is a nature of you need the personality,

you need some form of a,

you are getting this because you are you

and not you are getting this because of your portfolio

or because of other content that you make or whatever.

You know, that is the nature of micro-influencing.

It may not be so super contingent on your audience

'cause you may need less than a thousand.

There's a whole thing, lots of issues there.

No, let's talk about it.

Let's talk about the cult side of the micro-influencer

and the rise of micro-influencers.

So technically, on paper,

I believe I've joked about this years ago, okay?

On YouTube I'm considered a mid-sized creator.

I'm at like 340, almost 345.

I'm considered a mid-sized creator.

I think I'm considered a large creator either after 500K

or after a million.

I'm not entirely sure what the new rules are for that,

but I'm fairly certain

I'm still considered mid-sized at this point.

On Instagram I have just about 25,000 followers over there.

I think I'm still considered a micro-influencer

because I have done brand deals on there,

but I am not getting brand deals regularly.

And then on Twitter, I'm considered annoying.

As far as I can tell, with micro-influencers,

the goal seems to be how many free products can I get.

And trying to maximize the ability

to get free beauty products, clothes, et cetera,

to do brand deals on your small social media pages.

I'm not trying to be mean

when I say that it's small social media pages.

That is the goal.

It's usually people under 5K, a thousand, under 10,000 even

who are talking and making these videos.

All the content that I saw during this time

of how to become a micro-influencer,

you can get free product for under a thousand followers.

And all this stuff was very much how can I build my platform

to appeal to brands?

And it was not, how can I build my social media presence

to gain a following, grow a community,

and create a platform from that community

that I can then pitch to brands

to then share products with my audience that I believe in,

that I like, that I would promote if I wasn't being paid.

A lot of my issues with people who are like,

"I'm gonna be a micro-influencer,"

is that the overall base of what you build

is incredibly flimsy because right now,

hi, I am a mid-sized creator on YouTube.

I make fairly good money from my content.

I make fairly good money from brand deals.

However, I've been told from my management,

friends that are in management, other content creators,

that people are being told and sharing how,

because of the current state of the US economy

and where where things are going,

especially in influencer marketing,

it is going to be affected by the recession that we are in,

going into, or whatever you choose to believe.

Brands are pulling out of deals,

brands that are being offered deals are much less

and that's going to affect

across the board content creation

whether you're user-generated micro-influencers or whatever.

Same goes with the micro-influencers

who are only being followed by other micro-influencers,

which is still so crazy to me.

They know, you know?

Like I just think, hmm.

"My engagement's great."

Yeah 'cause you're in a group chat

where you're plugging each other's stuff

and mining interactions.

It's so...

Don't you want more for yourself?

You know, don't you want to be more than

literally just a storefront?

Don't you want that for your content and yourself

and your digital footprint online?

I don't know, like I know that's easy for me to say

as someone who now has a platform,

but like I didn't for years.

I was making content because I loved making content.

I did start making content because I wanted to be famous,

but like that got old very quick.

I was 16, you know, we're past that.

I'm 25 now.

Oh God, (laughs) we're coming up on 10 years of this.

Oh God. (laughs)

User-generated content is not new.

For example, when I was in, gosh, either,

I think high school?

I posted an image on, I wonder if it's still on Instagram,

let's find out.

When I was in high school I went to a Lumineers concert

at the Hollywood Bowl with my friend.

We got there pretty early and I took a photo from our seats

and posted it to Instagram.

328 weeks ago.

In 2016, I posted, "We have some pretty rocking seats.

#thelumineers, #hollywoodbowl."

Got a whopping 46 likes.

Started from the bottom, now we're here.

Looking at it now, it's a pretty mid-photo actually.

In the comment section still, I got a comment from Airbnb.

We love your shot and would love to feature it and your post

in our products as well as on Airbnb social medias

and materials.

Reply with #AgreeAirbnb if you want to allow us

to use your content this way.

And I was nobody, so I said #AgreeAirbnb

and I never heard anything back.

It never went anywhere.

That is Airbnb trying to get user-generated content.

A lot of times it's more organic, okay?

And I'm sure you've been reached out to before

if you post from events or of products and things like that

or if you tag a brand.

That's technically user-generated content

if the brand features you on their page.

Doesn't mean that Airbnb wanted that to be like,

"Look at all the cool things you can do here.

Look at this photo that someone took from an Airbnb."

Even though I wasn't on an Airbnb, I don't know.

Who knows? I don't care.

Now, in the year of our chaos, 2023,

it's much more prevalent, user-generated content

because as I assume you've heard me talk about

in other videos where I talk about marketing,

consumers, users, potential customers

put trust in individuals

more than they put trust in an ad on their TV

or an ad on their computer.

Especially if you recognize the person talking to you,

you're going to trust that ad more

than say some hot person in a commercial.

I mean I shouldn't say that because people trust hot people.

That's like scientifically proven.

My point is that if you like me,

you're probably more likely to trust a product

that I'm promoting to you,

not just because I'm someone who reviews products

and rips apart products on the regular.

You know, like there's a part of your brain psychologically

that does trust me

or at least likes my opinions on most things.

So when I promote something like say an iPhone,

you might be like, "Wait a minute, swell has an iPhone?

Maybe I want an iPhone too."

I'm assuming it's also people who thought that they could,

they saw the rise of micro-influencers on TikTok

and things like that and thought,

well, why are they doing that

when they can actually be making money

with like the same amount of following if not less.

And this is where I kind of lose the whole MLM structure

side of things.

I do still am the what's on a cult feels like a cult.

This literally is like has,

not propaganda, that's not the word,

but manufactured authenticity

that is framed as real reviews or like content.

Not all user-generated content results in money.

Sometimes it is just free product,

but to build your portfolio,

then you start making more money and all this stuff.

And I think that's where, again,

we lose the like top of the pyramid style of things

because at the end of the day,

I take brand deals, I take images, I do that.

Anyone can go and take better photos.

I could take a photo of this iPhone.

You could take a better photo of this iPhone

with a better camera, better lighting, a better backdrop.

Again, what's not replaceable is myself.

You cannot replace me.

I am an individual.

Forget my platform 'cause there's people on this website,

on TikTok with the same size platform as me,

probably made up with the same type of demographic as me.

What's unreplaceable is myself.

And that's where I think this is,

again, precarious for the person at the top,

but also kind of loses the whole pyramid thing.

I don't know why I'm doing an upside down pyramid

'cause it's like this.

'Cause this person can be replaced

by any one of these people who decides to get off.

But again, I think that's proof that it's more perilous

to be doing this type of work anyways

and be relying on this work.

But my point is, is that again,

where this person maintains control is courses

and their mailing lists and maintaining, okay,

I have deals with let's say Dunking Donuts

and Barnes & Noble.

They don't do UGC as far as I can tell

because they don't need to.

But Barnes & Noble, okay?

I have contacts for all three of these brands.

I've been making content for all three of these brands,

user-generated content,

and I've made thousands of dollars or hundreds of dollars

from these brands.

I have also built a following,

an audience of people who also want

to make user-generated content

and make the money that I make and work with the brands

that I work with

because they see all the free products I get

and all the money that I make from it and they wanna get it.

Now, is it in my best interest

to share these contacts with people

or is it more worth my time and for my own safety

of my business to just give them a template

of how I reached out to people

and show them maybe, sort of,

how you got this email contact and all of that?

But again, I already have an established relationship

with these brands.

Let's see if so and so, they may have better content,

but they might be a little difficult to work with

or they may not be confident in pitching themselves yet.

So they may have better user-generated content,

but they really don't know

how to play the game of being a business person

when also doing work with these brands.

That's subjective here,

but there's a lot that's also like,

this person's precarious,

but also they are in fact replaceable

because the content even is replaceable.

It's just constantly able to be regenerated

by different people.

Everyone can take the same slice of lemon

and take a photo and it's all gonna look different

because it's all different people doing it.

And again, it's just like cool.

If we just work with six people

all at a hundred dollars each or there's now 500,

615,000 people doing user-generated content professionally

and this person does their 14 videos

or whatever it is for 500,

this person's gonna do it for 300,

that person's gonna do it for a thousand.

And though they have worked with a lot of great brands

and have portfolio

that we've worked with them before or whatever,

these photos are pretty good too

and we think they'll do the same amount of work.

And I'm sure someone's gonna be like,

"That's a risk with any business."

But this is my point is that it's already oversaturated.

We're seeing it already

based on the amount of TikToks that I see

from different women specifically.

I'm sure there are men who do user-generated content.

I only see women on my for you page

doing user-generated content

and I never see the same woman doing it.

And I'm not saying like, oh, it's the same person

not showing their face, holding the thing.

No, I mean every person that's a guru

about user-generated content,

I never see the same person twice,

which tells me that there is a ton of people doing this.

There's an article, this is like a,

"Oh, look at this great side hustle type of thing."

Look how you can change your work life

and make all this money and all this stuff

from Business Insider and it's called,

"TikTok has led to surging demand for UGC ads.

Here's how creators are cashing in."

And again, all different creators.

UGC is my fave job ever.

Are you ready to start your UGC career?

How to dissect and study TikTok ads for UGC content?

And I'm saying UGC content in that regards

because it's, again, content for UGC content.

Okay? Okay.

Advertisers are embracing paid UGC as a cheap

authentic form of promotion.

Again, manufactured authenticity.

One of the ads that's on here

is from AHMNA social.

Finally try glam nails in the style chocolate milk.

Use my code.

It has 129 likes.

Now, user-generated content does not need to be posted

to your pages is my understanding.

They may ask that you post to your pages,

but it's not required.

This article is talking about Amna.

One day in April while scrolling through TikTok

during her lunch break,

she saw a post discussing how lucrative UGC can be

for creators.

In the video, an influencer claim she had made

4,000 in a month creating UGC for brands.

Again, an influencer.

I don't know if this is an actual influencer

or if this is someone who has become an influencer

from promoting the fact that they do UGC.

Okay?

Again, the lines,

boom, boom, boom, boom, okay?

Like Dailey's TikTok was soon flooded with videos

about how to succeed with UGC.

Three months in, Dailey's already made over $7,000

creating UGC for brands like activewear line Ayda Active,

skincare brand Simply Jess, and beauty company FW Beauty.

Brands have user-generated content

for promotional purposes for decades,

but several ad agencies told Insider

they've seen a significant uptick among clients,

especially those in beauty, fashion, and food

and beverage spaces using UGC

and their influencer campaigns in the past few months.

So I think the phrase influencer campaign

is being used here for like influencer marketing.

So I think that's maybe referring

to how their influencer campaigns

is referring to influencer campaigning budgets

and they're just using a larger chunk of that budget now

for their marketing for the UGC content

versus like a content creator

who's an established influencer or whatever.

My point is that I think they're using the word influencer

incorrectly here, but that's just me.

And I'm sure someone's gonna be like,

"You're just jealous they're making more money than you."

No, 'cause you're not.

$7,000 over three months, she's not.

It's not about the money.

I am talking about the fact

I can survive without brand deals.

I can survive without a brand reaching out to me

for the next 10 months, even longer.

I don't think you can.

User-generated content creation is a real job.

I'm not trying to imply that it's not.

However, I don't think it's the get rich quick scheme

and that everyone can do it

the way that so many of these creators

who are trying to frame themselves as UGC gurus

are making it out to be.

These are the people who are talking about it

using MLM language.

Advertisers looking to save money in the uncertain economy,

UGC allows them to create cheap social media content

with a less produced quality,

giving the videos an authentic feel.

And it's a way for social media creators

without large followings to cash it.

While not all creators will be as successful as Dailey

and consumers may realize

the videos aren't that authentic after all,

some industry insiders believe

UGC will change brand engagement long-term.

According to TikTok strategist Denver McQuaid,

UGC is the future of ad content.

UGC is here to stay, he said.

The days of Instagram perfection and extreme Facetune

are mostly behind us.

See, I think those are two separate things though.

We can talk about extreme Instagram perfection

and Facetune and all of that,

but I don't think that's the same thing

as an influencer marketing campaign

with an individual as the focus, okay?

For the campaign itself.

I think those are two different things.

Unlike sponsored content

that gets posted on a creator's personal personal page,

this newly popular UGC belongs to brands

and the creators don't need to have a following

to establish credibility.

In fact, some brands prefer creators with small followings

because their content costs less and feels more authentic.

It's my understanding that if I were to take a contract

for a UGC deal and make the video,

that's their ad.

I no longer own that because I agree to make that

under their agreement with them.

If I make a brand deal, I'm promoting the product,

but it's still mine.

Unless they pay for the rights to use it other ways,

then that's a licensing deal, that's a separate thing.

Then I let them use it, never in perpetuity.

I don't think you'd ever do anything in perpetuity

as a content creator,

but that's just me for a set amount of time

and I charge for that.

It's things like this that really make me think

there is going to be a crackdown from the FTC

across the board on social media marketing.

I've talked about this

with people in my day-to-day life actually.

I'm working on revamping my personal finances right now.

I'm now working with a new accounting company.

I am making sure that everything is done

step by step properly.

Fairly certain there's going to be a mass influencer audit

in the next couple of years.

If even then because of all of these brand deals,

the FTX US situation, everything happening with crypto,

all of that, but also crackdowns on what is allowed

for paid promotion.

And that's going to affect influencers

who do influencer marketing, #Ad, don't forget that,

but also people who do UGC content who make a,

what is essentially an advertisement

without putting #Ad or #UGC or whatever it is

that is going to be required for brands like these.

And so again, I just think where's,

I know I'm talking in like a grand scale of things,

but I really think you're opening yourself up

to a lot of legal issues

and there's going to be one lawsuit

that we are gonna talk about in a second

because you gotta know exactly what you can and can't do

when it comes to user-generated content

and content in general.

This is how the article ends by the way.

"So for now, the use of paid UGC

is benefiting both brands and influencers."

Again, I think we're throwing the word influencer around,

but that's just me.

"But some insiders worry

that the tactic may soon come to be seen

merely as sponsored content.

If a random person creates content with their brand

because they love it, what better endorsement can you get?"

Craig McDowell, media director and Rachael Pecka,

media supervisor at agency TDA Boulder emailed Insider.

If you are paying them for the content,

then it feels more like any other ad.

And there are times where I see content where I'm like,

"This seems inauthentic."

Okay?

And I check the comment sections and sure enough,

it's inundated with people who's like

"You left out the #Ad.

Why aren't you admitting that they're paying you?

Did you even pay for this product?

I don't think you actually used this product."

Inevitably, people are going to catch on

when something is inauthentic.

Either last year or in 2021,

I made a video called "Who Owns What on TikTok,"

and then last year I made a video

talking about don't steal from creators.

In that video I talked about a couple of different things,

but we talked about using music

and promoted ads on TikTok,

which do classify as ads,

and whether or not those people using those audios,

whether it's from a popular TikTok sound or a song,

if that's legal for them to do

or if that is copyright infringement

or if there was a licensing deal.

We talked about a bunch of things.

More recently, Mike's Mic here on YouTube

posted on TikTok.

- Would you rather never- - Hey, @parade,

just wondering why you're using my voice

in this ad on TikTok.

I did not consent to this.

You did not contact my team and I would know

because I am the team. (laughs)

- Talked about Parade a lot.

Don't worry, the video is coming,

and he talked about how no one from Parade

had reached out to him or his team

because he was his team for permission to use his sound

and that they had not paid him.

Just because that sound went popular on TikTok

does not mean that it can be used as an ad

because that is from his video.

Me allowing something from a video to go viral on TikTok

or whatever the sound to be played through

or whatever is one thing.

A brand starts using it for money, run me my check, okay?

We're not doing this.

It's that simple.

People having fun with it and making like 50 cents

off of the Creator Fund is one thing.

A brand that definitely I know has marketing dollars,

you're gonna pay me.

This is our buddy, Robert Freund Law.

We talked about him

in the "Don't Steal From Creators" video as well.

He covers a lot of social media

and influencer marketing lawsuits

and updates and things going on.

So this is from his blog.

"WMG Sues Makeup Brand Iconic London

Over Music in Influencer Posts."

Warner Music Group's lawsuit against Iconic

alleges that Iconic and its influencers

use WMG's copyright music without permission.

In total, WMG says with more than 165

different copyrighted tracks owned by WMG

across at least 169 videos.

WMG says Iconic never sought to obtain licenses

for the tracks.

Remember, brands and influencers

cannot use music from TikTok's standard,

i.e. non-commercial music library,

for any sponsored post or advertising

without obtaining a license

for whoever owns the rights to the music.

Platforms like TikTok and Instagram

have licensing deals with big record labels

that allow users to include music in videos,

but those licenses don't allow for commercial usage.

Same goes with me.

If you are a brand, even if we've worked together,

you better talk to me before you use any audio

or clips from my videos, et cetera.

Bang Energy was found liable

for this exact same type of infringement

in a case brought by Universal Music Group

earlier this year.

The lesson, if you're a brand or a creator,

do not use music in sponsored content,

advertising without clearing the rights.

Damages...

Again, if you don't know the business side of things,

you're gonna get screwed by the game.

It doesn't matter which how you approach these companies,

as a content creator, influencer, UGC creator,

whatever, okay?

They don't respect you. (laughs)

You can be friends with individuals at these companies,

but the companies as a whole

is always going to protect their bottom line

over protecting you.

So be your own advocate. Otherwise, you're screwed.

In doing that, I found something from Robert

also talking about how the FTC

is announcing they're cracking down on the violations

of their rules, including ad disclosures

and influencer disclosures.

Remember what I talked about?

What would you rather do with $50,120?

That's the potential penalty per violation,

which means liability can balloon quickly.

This is part of why we're seeing more record breaking

settlements and judgements

from this aggressive FTC administration.

This is not going to go away.

This is only going to get worse.

You need to protect yourself if you are going to do this.

Again, the cult of UGC content.

I'm talking about this for a variety of reasons.

It's not look how much money I can make.

There's risks with everything.

There's risks with me making this video.

And that includes any UGC content creators

reaching out to me and being like, "You're a bitch,"

or calling me, can I say bitch doll on YouTube?

Probably.

I do think that user-generated content

is not gonna go away.

But my point is is that it is not the get rich quick scheme

that I'm starting to see it pitched on TikTok, okay?

The moment courses get brought up, the moment I'm like,

you lost me because I know that immediately,

you're gonna start making more money from the courses

than you are going to be making from the UGC content.

Hermes is growling.

What is the problem?

WMG wins.

Then Iconic London can turn around

and sue the influencer for the 24 million

if they in fact did not have the proper protections

for their contract in place.

That's the risk that you take.

And especially if you post it on your page and it stills,

they can be like, "Oh look, they post on their page,

which shows that it actually belonged to them.

We just reposted what they posted.

We didn't know we were in trouble for that."

I'm sure there's gonna be a bunch of shenanigans

because that's what people do.

They commit shenanigans and you will not be protected

if you rely on them to protect you.

My point is is that, again, we're already oversaturated,

I think, in the UGC market.

Whether it becomes more popular or not,

you're gonna start seeing the rates going down

because there's so many options

and everyone's gonna start being priced competitively

because if they do X amount of brand deals

or X amount of deals, again, that's 7,000.

That could be 50 of them or a hundred.

Who knows how many UGC deals are actually in that

for that 7,000 that that one creator was making.

You are dependent on these brands

seeing value in the content that you are making

and what you are doing.

The moment that these lawsuits start becoming more prevalent

or the FTC changes their guidelines or whatever,

that value that they see in that content

is going to go down,

especially if there's not a good ROI

for the content that they are paying you for.

If people are saying like,

"This is an ad, this sucks, this is bad.

Oh my God, I'm never gonna shop from them again

because they did UGC content."

That is something that can happen at any given time.

You need to be prepared for when that drought

inevitably comes to your land.

My metaphor is bad, but that's besides the point.

I always think that building a stronger base

and a stronger community is more valuable

than just look how much money I'm making from brand deals.

Anyways, that's really gonna be it.

Do you think this is a cult? Probably not.

I know I got a little thin on there,

but it's just every other video

is how to get more clicks on your UGC content,

how to get more contacts for your UGC content,

how, all this stuff.

It's just inundating my For You page.

Do you make user-generated content?

Do you think I'm a bitch

for everything I said about user-generated content?

Do you think that I am jealous

because of user-generated content creators?

I don't know. Tell me what you think.

Really, rip into me.

Tell me, help me in the algorithm.

Have fun.

What's something that's not a cult,

but you kind of think is a cult?

Do you think that this was excessive?

Let me know.

Comment down below.

Reminder, I have a podcast, the "Swell Shenanigans Podcast."

It is officially back.

Reminder, I have a merch like this mug

and shirt designs that will be out for this video as well,

coming soon to Fourthwall.

Shout out to my patrons.

Thank you so much for my own patron.

You can also explore my Patreon,

it'll be listed down below.

Links for all my social media, that'll be all up here,

and that's gonna be half of the day.

Goodbye.

It's kind of like when everyone talks about

YouTube automation,

like, "Oh, you can become popular on YouTube

without showing your face and all this stuff,"

and then suddenly YouTube stops monetizing channels

that do that and you realize,

"Oh, I wasted all this time and all this money

and all this stuff to not make money from YouTube."

I think that that's the inevitable follow through

with the amount of people getting into UGC content.

Thank you Allen, Cameron, Christopher,

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Donnie, Elliot, Evan, Erik, Eyal,

Hopeless, InCogNiTo, Isaiah, Ja'korey,

James, Joe, John M, Jordan, Joseph,

Keni, Kim, Kristen, xLamn, Lex, Lisa, Luis,

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Michael, Michael J, Mica, Nathan, Nathaniel, Pat, Pen,

Richard, Rob, Red, Robert, Ross, Ryan, Sam, Serena, Seairra,

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William, Zendre, Zwink.