User generated content on Instagram is a goldmine that not nearly enough brands are utilizing, according to new research from digital think tank L2.

User generated content (UGC) works best for brands on Instagram, according to a new insight report from digital think tank L2.

The report found that across all ages, 55 percent of consumers trust UGC over other forms of marketing; 49 percent said the same of brand websites, and only 19 percent of people trust banner ads above all else. At 64 percent, only professional industry reviews were ranked higher.


But while professional industry reviews hold more clout, they don't translate to social media platforms, particularly visual platforms like Instagram, the same way that images created by fans do. When brands use UGC, they're not only earning consumer trust, but they also have the ability to integrate that content across other platforms.

For example, Target has incorporated the #TargetStyle hashtag as a tab on its iPad app, while Starwood Hotels aggregates a "Guest Gallery" of Instagram photos related to the properties. Coca-Cola's massively successful Share a Coke campaign from last summer was also heavy on UGC, which attributed its gallery of 550,000 Instagram posts to a 2.5 percent quarterly sales increase.

Hyatt has also leveraged UGC for email marketing in a recent test. When consumers sign up for the hotel brand's email list, they're asked to check off areas to which they're interested in traveling. Using location tags, Hyatt pulled Instagram images from properties in Hawaii and included them in emails to consumers who have indicated an interest in Hawaiian travel.


According to L2's previous Instagram Intelligence Report, 18 percent of the 250 brands featured UGC from Instagram onto an off-site gallery. Only 9 percent place UGC directly on product pages, despite the fact that doing (Read more...) can improve conversion rates by up to 6.4 percent in categories such as apparel.

The conversion rates also jump for jewelry (2.4 times), footwear (1.7 times), and beauty and consumer electronics (both 1.6 times). In addition, visual commerce platform Olapic found that consumers who see UGC during their purchase journey have 4.6 percent higher conversion rates, while those who interact with UGC's conversion rate goes up to 9.6 percent.

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