Unlock Reports:
Industry-wide studies on consumer behavior from the Cohley Insights team.
Back in 2014, coming off of a brief stint as a sports writer, I joined a promising young startup in Silicon Valley called Piqora. Led by Co-Founders Sharad Verma and Naveen Akunuri, Piqora was focused on helping consumer brands identify, acquire rights to, and utilize User Generated Content (UGC). The overwhelming majority of that UGC consisted of photos that were shot on smartphones by regular, everyday people.
Why did marketers want more of that content? The answer was pretty simple: It had a material impact on their conversion rates.
Within our client base, which was certainly substantial by any measurement, we saw conversion rates spike anywhere from 2–5% on product pages that had 3+ UGC photos displayed. Industry leader Yotpo reported an average lift of 3.28% across its client base. This small subset of authentic, visual proof points created organically by the brand’s customers built trust in would-be buyers. It enabled them to see themselves in the product, and it gave them an element of peer validation. “Hell yeah, these shoes really ARE cool!”
But we faced challenges at Piqora that ultimately proved extremely difficult to overcome. The primary UGC-related challenges we faced were, in no particular order:
A few years later, Piqora was sold to one of its primary competitors, Olapic. While the company ultimately was a modest success, we never really made it past those aforementioned challenges. One thing was abundantly clear to my eventual Co-Founder, Erik Graber, and me: Third-party content was immensely valuable and was only growing in importance.
In 2016 Erik and I had a few beers at some dive bar in San Francisco. We talked about what went right with Piqora and what we might have done differently. We’d worked both closely and highly effectively together at Piqora, overseeing the client base and building a number of relationships with marketers that would later prove valuable.
I was catching him up on how my good friend Richard’s company, BirkSun, was coming along. Richard and his Co-Founder Noah had reached seven-digit revenue selling backpacks with solar panels on them. The overwhelming majority of their sales came directly through their website (this used to be unique).
The primary way that they were building brand awareness was through influencers on Instagram, which at the time I assumed were just a bunch of wannabe models. As we continued to talk about and research influencers over the next week, we both came to the same realization that was heavily informed by our time together at Piqora: The primary value that influencers brought to the table wasn’t their “influence,” but their ability to create high-quality branded content at scale. This was THE answer to all of our Piqora-related challenges.
We knew that brands had an insatiable, nearly endless need for content, and we knew that these creators had the ability to create content that can be overwhelmingly valuable value for brands. We thought, “What if we give brands the ability to work with these talented individuals with a clear focus on content generation?”
Armed with that idea and a wealth of experience in the content space, Erik and I kicked off our journey in early 2016. We built the platform to be content first in every respect, and we put a particular emphasis on packing the creator side of the two-sided marketplace with talented creatives who weren’t necessarily influencers. We brought in semi-professional and professional photographers, we brought in people who created smartphone videos reviewing products, and we brought in aspiring “influencers” who other platforms wouldn’t touch.
Every startup, whether their founders are willing to admit it or not, need some element of luck to succeed. We started with some core assumptions and some educated guesses on how the market would evolve..here’s a recap:
Assumption №1: Brands’ overall need for content is going to skyrocket
Five Years Later: It certainly has! Marketers’ drive to personalize consumer experiences has contributed to this, as has the rise of social networks like TikTok.
Assumption №2: The brands that run more sophisticated testing programs will create separation
Five Years Later: This has certainly proven to be true. There’s an obvious correlation between testing more content and better performance in ads. The only measurable difference between top-performing advertisers and the average advertiser on Facebook and Instagram? Top performers test 11X more content than the mean. The brands that are winning on digital are the ones that are constantly testing, learning, and using the Content Engineering flywheel approach.
Assumption №3: Smartphone cameras will continue to improve, enabling more and more people to create high-quality branded assets
Five Years Later: I mean, obviously. There’s no better representation of the “Shot on iPhone” series that’s found its way onto countless billboards and banner ads.
Assumption №4: Digital marketing will continue its double-digit year-over-year growth
Five Years Later: Even before COVID accelerated the growth of ecommerce by an estimated five years (and 44% YoY relative to ’19) that trend line was sticking. Online sales enjoyed double-digit growth YoY in the four years leading up to the pandemic. In order to take full advantage of this ongoing shift in consumer buying habits, a comprehensive, well-thought-out digital marketing strategy is now table-stakes for direct-to-consumer brands.
Content is the cornerstone of every brand-to-consumer interaction that happens online.
Assumption №5: Brands are going to ramp up their content testing in automated channels
Five Years Later: To be determined! This is one of Cohley’s most important roadmap priorities in the coming quarters, and we’ll be introducing the ability to test content where it wasn’t previously possible across brands’ full marketing stack.
What fun would it be if we didn’t have more assumptions and educated guesses in front of us?