Lounging on the beach with my wife, Debra, on vacation in Maui, today I read "The High Price of Creating Free Ads" in the NY times. It is a story about the rough start that Heinz is having following the lead of Doritos, General Motors, and many others in trying to spark word of mouth through user-generated advertising. Small companies like Blendtec have made a mint by being pioneers in this new format (but their approach was different from Heinz).
The simple fact of the matter is that not every strategy for user-generated content is going to be successful. Partnering with a company that specializes in user-generated content is going to help you significantly because most companies don't have the needed experience in-house. This is a very new field, after all.
However, I believe that Heinz is doing the right thing by at least trying. The online dialogue has begun – starting with ratings and reviews, then blogging, then social networking, and now user-generated advertising. Heinz is smart to dip their toe in the water, just as many (even earlier pioneers) are dipping their toe into the upcoming 3D Web, popularized by Second Life. There is an opportunity cost to being too much of a laggard, just as there is an opportunity cost for being too early of a pioneer. The balance is difficult to strike but great companies did not get great by being timid.
Perhaps instead of user-generated advertising, Heinz should have started with crowdsourcing. Another consumer food company, Kettle Chips, selected several new user-generated flavors with their "People's Choice" campaign, as I wrote about last year around this time.
The NY Times article also reminds me of the "contrarian" (i.e., informed by decades of marketing experience) views of Dr. Peter Fader and Dr. David Reibstein of The Wharton School, as documented in my Word-of-Mouth Wisdom interview series.
I would love to hear your thoughts on this news.