User-generated content becomes the ad campaign: Olapic raises $5M Series A

By Cale Guthrie Weissman , written on July 30, 2013

From The News Desk

User-generated content bombards us everyday. On Facebook we see all the companies our friends "Like." Brands display users' Instagrams. Companies respond to tweets, your friends' reviews on Yelp, and their input on Quora. You get the picture. On the other end, companies like Klout are trying to channel this information into something quantifiable and maybe even salable. And to marketers, our user-generated content is their data, which they want to slice and dice and collate to figure out what it will take to get us to buy more shit we may or may not need.  

One such company is New York-based Olapic, a startup that provides a platform for "collecting, curating, showcasing, and measuring crowd sourced photos and videos," which has just raised a $5 million Series A led by Fung Capital USA and Longworth Venture Partners, with participation by existing investors Great Oaks and Scout Ventures. What is special about Olapic? It is solely interested in the picture side of UCG. 

Olapic started in 2010 aiming to capitalize on the photo-sharing market. The idea is simple: Scrape the social mediascape for photos of companies' products, then re-appropriate them for marketing purposes. According to co-founder Pau Sabria, the initial intent behind the platform wasn't necessarily ecommerce.

"We started the company with a focus on media companies," he told me. Soon he realized that perhaps he should focus on another market, as e-commerce sales topped $1 trillion in 2012. The company is only taking that further with this funding announcement, along with a list of more than 30 new ecommerce customers coming aboard.

Ecommerce businesses and marketers are betting that user-generated content increases user engagement. Clothing lines, for example, are using photos from social media as a means for advertising. It seems to work, as we trust our friends more than we trust advertising. Research shows that often users rely on other users before making purchasing decisions. A survey by PowerReviews found that a majority of people are influenced by Facebook "Likes" when making purchases. EMLWildFire finds that 51 percent of consumers trust online reviews, and the list goes on. 

Olapic is focused on the photographic side of UCG, continuing a long line of marketing tactics. Some effective ad campaigns (Burberry and Lululemon, for example) were grounded in user-submitted photography. Even Ford, a company I personally wouldn't consider the hippest marketers out there, ran a photo-based campaign last winter called "Fiestagram" in Europe.

Olapic wants us to think that this will greatly help e-commerce sites unlock unused potential from users' photos. That is, it will show businesses the way their products are used in the "real world," that is, the way a regular person wears a shoe and not necessarily some model. And that is a genuinely novel and interesting factor that it offers.

Olapic has a pretty impressive list of brands, including Pepsi, Steve Madden, Condé Nast, New Balance, Jet Blue, and Coach, claiming that clients using its platform get increased conversion rates, but there's little data behind this. While "Likes" and user-generated reviews contain actual content about people recommending products, user-generated photos don't contain this type of useful information; they're just images. And there's a difference between the content provided in Yelp than by Instagram.

But, for the time being, many brands are taking the bait. Does this mean that UCG has reached a new paradigm? Of course not. But it does mean that ecommerce is beginning to realize that these user-generated pictures may actually convert into sales. So here's to more brands not paying you to partake in their advertising.