UGC vs. Traditional ads: influence on customer engagement

Abstract

In the digital economy, companies actively utilise social media as a primary channel for consumer interaction and customer acquisition. One of the most significant tools in modern digital marketing is user-generated content (UGC). This paper investigates the impact of user-generated content on the effectiveness of marketing campaigns and its specific role in reducing customer acquisition cost (CAC) compared to professionally created brand content (firm-generated content, FGC). Through a comprehensive analysis of contemporary scientific research, this study examines the influence of UGC on consumer trust, audience engagement, and purchasing behavior across various industries. The findings indicate that user-generated content enhances brand authenticity, stimulates higher engagement rates, and significantly reduces marketing expenditures. These factors collectively contribute to a lower CAC, positioning UGC as a critical component of cost-efficient digital marketing strategies in the social media landscape.