Consumer Generated Media is any content created by visitors who are NOT marketing folks for a site, product or service. Blogs are the most recent large example, but it extends to user reviews, bulletin boards, forums, chat, Messenger clients, social networks, podcasting, interpersonal emails, etc. CGM is both the most open form of online communication and the form of communication most feared by company marketing strategists and PR mavens. If the CGM is unfiltered and informative (positive or negative) it can drastically influence someones opinion to buy or not buy a product or engage with a service.

Here’s an example, while I was at Amazon - we did analysis on the user reviews for specific products to see how the number and quality of posts affected the sale of a product. Un-suprisingly, the product with relatively similiar features that had not only the best but the most user reviews sold better than other products. This was true even if the price point was a little higher (the range was about 10%). We tried to take into account consumer digest reviews, brand, etc. as much as we could but there was definately an effect. In addition, we saw critical mass in terms of user review after 3 positive reviews. Just one or two reviews did not significantly move the needle, but three and up created more trust.

So, we know that CGM can impart or degrade trust in a product, but only if the comments are seen as truthful, honest and open. A site that has nothing but good or nothing but bad to say about a product is seen as suspect and not trustful in and of itself. Marketers are realizing this and are now trying to take advantage through the following mechanisms:
1) Measuring CGM. I sat through a really interesting presentation by a rep from Neilsen/BuzzMetrics who are now using advanced Natural Language Processing and Advanced Text Mining to monitor the buzz of brands throughout the web. This is very cool technology with a lot of uses. He showed examples of how the volume of buzz may not equate to positive awareness or sales of a product. The prime example was when Oprah gave away all of the G9 Crystlers on her show. The initial buzz was loud, but when it was revealed that the recipients were stuck with a $7,000 tax bill, the buzz turned negative and did not impact desire online.
2) Back end systems are being built to expand the number of sites that can host and utilize CGM. BazaarVoice.com is a new service that basically white labels user review software to sites like CompUSA, Petco and GolfSmith. They give you the tools to let users review items much the same way you can buy forum or bulletin board software.
3) Marketers are hiring buzz firms to seed CGM. There is a growing number of small, nimble, cloaked companies doing viral or buzz marketing online. They talk about products in influential spots online to generate buzz. This really only works if either the person is transparent in their identity and speak from authority or if they are really good at hiding who they really are and what they are doing.

All in all, this is a very interesting area online marketing that is only going to grow. At some point, it may become too commercialized which will hurt the trust issue and something else will take it’s place. I love the internet!