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What’s UGC?
(2 min read) Breaking down what exactly is UGC and why it matters for Creators today
Avi Gandhi
January 07, 2025
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Happy New Year! I got this message from an unhappy (now former) subscriber last week, and I have to agree—I did a poor job setting the table on UGC economics.
It’s important to understand UGC because it’s both a growing market and one of the most effective ways talented, early-stage Creators can make decent money.
Let’s get into it!
2025 is your year to make $100,000!
If you’re looking to transition from making content to making money, UGC is one of many options.
It’s a challenging road to $100,000 in annual income - the threshold I use to define the Creator Middle Class - and much harder if you travel it alone.
I made $254,334 in 2024 with just 60,000 followers, but would not have without a strong community who did things for me like
Introducing me to a $137,000 client (!!!)
Getting me a panel at a major conference
Offering a perspective that grew this newsletter 300%
You deserve the same.
That’s why I’m launching The $100k Creators Club.
If you’re early on the journey from making content to making money, and want resources, peer support, and opportunity-sharing - maybe The $100k Creators Club is right for you.
UGC Means “User-Generated Content”
The term comes from the early days of the Creator Economy, when platforms like YouTube, Facebook, and Blogger referred to people making content as “users.”
UGC simply referred to all content created and posted by regular people, not media companies. The implication was that UGC wasn’t “professional”—videos with lower production value shot on consumer cameras, with cheap mics and simple editing, compared to TV-quality content.
It was often a pejorative term—executives dismissed it as “cat videos,” for example. A big part of my early career was advocating for the talent, quality, and value of early Creators and their content.
But I digress.
As the concept of “Influencer” emerged to describe Creators with scaled audiences and their own distribution, these categorizations shifted.
Modern Content Categories
Today, content falls into four broad groups: Hollywood, Publisher, Influencer, and UGC.
Hollywood: High-production-value content from traditional studios and production companies.
Examples: Movies, TV shows, and streaming series by Disney, Netflix, Amazon, etc.
Publisher: Mid-production-cost content distributed by large networks, including digital media companies and niche publishers.
Examples: The New York Times, BuzzFeed, and Food52.
Influencer: Low-to-mid production-cost content created by individuals with built-in audiences and strong distribution.
Examples: Creators like Alix Earle, Kai Cenat, Joe Rogan, and Pokimane.
UGC: Low-production-cost content created by individuals with little or no existing audience.
Examples: Content from everyday people or early-stage Creators with small followings.
Enter Brands
Brands began paying Creators with large audiences to promote their products as far back as the late 2000s. Most assumed social content was for organic reach, relying on incentives like discounts or contests to encourage posts.
By the mid-2010s, clever brands realized social posts could serve a different purpose: advertising.
Running ads on platforms like YouTube, Facebook, Instagram, or TikTok doesn’t just require money—it requires assets like videos and images, which agencies produce at additional cost. Marketers saw an opportunity to reduce costs by repurposing influencer posts as ad assets.
If you’ve done a brand deal, you’ve probably been asked for paid usage rights. Brands realized repurposing influencer content was cheaper than hiring agencies, and data shows it outperforms traditional ads—for example, one study found 4x higher clickthrough rates.
It’s About Creative
The boost in ad performance wasn’t from the Creator’s “influence.” Ads were shown to people who likely didn’t know the Creator. Instead, the shift came from changing consumer preferences.
People spent so much time watching “user-generated content” from peers and Creators that they began to prefer more authentic, lower-production ad styles over polished, TV-quality creative.
Brands, especially those running performance marketing campaigns, needed more creative assets to test and optimize - but paying influencers for these assets became costly since their pricing included audience distribution. Brands wanting 100 ad videos couldn’t afford 100 influencers if those influencers were also charging for the cost of reaching 100,000+ followers.
Enter UGC Creators
Many talented Creators make great content but have small audiences. It’s much more cost-effective for brands to pay these Creators just for the video assets, with any posts being a bonus.
Today, in the context of Creator monetization, UGC refers to content produced by Creators for brands to use in their marketing. That content might get posted by the Creator, but that’s not really what the brand is paying for - they’re paying for the creative asset generated by the Creator.
I know several Creators—like previous guest Sanchez Zehcnas, who worked with over 700 brands—making significant money with audiences under 10,000 by producing UGC content. I’ll be inviting some of these folks as guest speakers to The $100k Creators Club, to pick their brain on the exact tactics they use to maximize their earnings.
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Do you make UGC content for brands? |
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Written by Avi Gandhi, edited by Melody Song,
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