UGC (User-Generated Content) Usage Rights: Everything You Need to Know

UGC or user-generated content covers everything users create about your brand, like photos, videos, or even livestreams.

It’s the easiest way to increase brand recognition and trust. 

UGC is like the new-age word-of-mouth, essential for promoting your brand on social media.

However, there are some legal hoops to jump through, like getting proper UGC usage rights.

Don’t worry; we’ll use our experience in the field and share insider tips on avoiding legal pitfalls and the nitty-gritty of licensing agreements. 

Key Takeaways:

• UGC serves as today’s customer testimonials, improving brand recognition and trust, and creating a positive reputation, thriving on social media for cost-efficient advertising. 
• Legal risks accompany the use of UGC without proper consent, emphasizing the need for understanding and obtaining UGC usage rights. The default rule is that unauthorized content usage may lead to legal implications. 
• Ensuring you have a contract with the content creator is essential to the best practices for UGC rights. Licensing agreements are a common method, followed by the complete transfer of ownership for extensive usage and exclusivity rights that come with premium costs.
• A step-by-step guide for acquiring UGC usage rights includes setting clear Terms and Conditions, approaching influencers respectfully, negotiating professionally, drafting comprehensive contracts, and maintaining positive partnerships through regular follow-ups. 
• The determinants of UGC rights costs are influencer size, content type, length, quality, and duration of usage rights.

Without further ado, let’s start with the basics of UGC marketing. 

What Is UGC (User-Generated Content)?

User-generated content, or UGC, is an umbrella term that includes all types of content users create regarding your brand, company, products, services, or employees.

This content could come in text, image, video, or live stream. 

Learn more about the ABCs of UGC marketing here: What Is UGC and How Does It Work? 

Why Is UGC Important for Brands?

Think of it like this.

User-generated content of today is the customer testimonials of the past. 

A real person using your products or services giving positive feedback or showing a step-by-step process of using your product or service is still the most effective advertisement. 

Word-of-mouth marketing is more alive than ever today on social media, thanks to user-generated content. 

We’ve seen it with our clients.

 UGC creates brand recognition, a sense of trust, and a good reputation for a company. It is authentic and genuine, placed within a real-life context.

Not to mention, it also reduces the cost of in-house content production. 

Insider story: UGC helped us massively decrease the CPAs for brands like NielsenIQ, up to 75% across all social media channels.

A good example of a brand incorporating user-generated content is the clothing brand Aerie. 

Through its UGC strategy, Aerie promotes the idea that beauty comes in diverse shapes, colors, and forms.

The brand encourages users to join the movement by using the hashtag #AerieREAL for a chance to be featured on their official account. 

Source

What Are “UGC Usage Rights”, and Why Are They Important?

While user-generated content seems all fun and games, it could bring legal risks unless you are careful. 

Once you come across a piece of content that mentions your brand, your initial impulse could be to repost, reshare, or repurpose it on your own social media channels.

You are understandably proud of this authentic mention of your brand.

However, you should not use any content without the creator’s consent. 

This is where UGC usage rights enter the stage. 

The default rule in the usage rights of any kind of content is that if you did not create the content, you do not own it.

The user may tag, mention, show, or even actively use your brand or product in the content.

It still does NOT mean that you can use this content freely.

Intellectual property rights still apply to social media content. 

Additionally, it is safer to assume that any piece of content created during a campaign or a collaboration with an influencer belongs to the said influencer unless there is a contract signed that states otherwise.

Using the content outside of the agreed timeframe may cause trouble with legal implications. 

We advise our clients to obtain UGC rights for multiple reasons.

The first is obviously the legal risks (more on that in the next section). 

Secondly, adopting proper business conduct raises your brand’s credibility. 

Other brands and influencers with the potential for a future collaboration need to ensure you are doing legit business without any association with copyright infringements.

Lastly, your brand’s reputation is hugely affected by any and every accusation against you.

News spread quicker than ever on social media.

Your target customers are also the audience to news of your brand being accused of bad business.

Such negative publicity drastically reduces the brand trust you have built over time. 

Side note: Even a well-known brand like Volvo cannot escape legal trouble for copyright infringement. 

In 2020, photographer Jack Schroeder and model Britni Sumida sued Volvo for posting an Instagram story showcasing the model with a Volvo car.

They included a link to the company’s website, making copyright claims.

Source

That brings us to the next point:

Legal Issues Common in UGC Rights Management

• Copyright violation/copyright infringement penalties

Always remember the default rule: when creators craft content, they own the copyright to it.

If a brand uses that content without permission, it violates ownership.

A seemingly minor copyright violation may lead to major copyright infringement penalties that could generate unexpected costs. 

Engaging in copyright infringement isn’t just a financial hit – it can lead to legal showdowns and damage your brand’s reputation.

Though there might be rare exceptions, the penalties for copyright infringement are substantial, ranging from $750 to $150,000 for each infringed work.

• Right of publicity

The right of publicity prohibits businesses from using someone’s image or name for commercial purposes without consent.

Even if not using their content, mentioning a person without permission can lead to legal issues.

Famous individuals or those with a significant following face higher scrutiny, but misuse of likeness can also affect lesser-known individuals.

• Misappropriation of likeness

Much like the right of publicity, misappropriation of likeness allows individuals to take legal action if an entity uses their image for commercial purposes.

3 Best Practices for Obtaining UGC Rights

Now that you realize the penalties for not getting UGC usage rights let’s see how to obtain them.

We’ll share a page from our agency’s playbook, so follow the steps below.

1. Licensing agreement

First, we advise our clients to consider licensing agreements.

A licensing agreement serves as a contractual framework specifying the media platforms where the content will be used and the duration it can be featured.

It is the most common method of gaining content usage rights since the length of content usage and specific media channels are all agreed upon by both parties. 

Thus, a licensing agreement is a temporary partnership between a content creator and a brand with a preset time frame, content type, and media channels.

It is a contract that documents the explicit consent of the creator. 

2. Transfer of ownership

The complete transfer of user-generated content comes with substantial costs and complexities, making it a less favored option unless you intend to use the content extensively across various media platforms for an extended period.

In this case, ensure you have a transfer of ownership in place.

3. Exclusivity rights

Next, check exclusivity rights.

Certain brands request exclusivity rights when they observe a content creator delivering high-performing user-generated content for multiple brands.

In that case, for example, a makeup brand might negotiate exclusivity rights with an influencer, preventing the creator from promoting any other makeup brand throughout the contract’s duration.

However, it’s important to recognize that brand partnerships are the primary income source for content creators.

Imposing restrictions on their collaborations limits their earning potential.

Consequently, exclusivity rights come at a premium, considering that your brand becomes the primary contributor to their income.

A Step-by-Step Guide for How to Acquire UGC Usage Rights

Here’s how we acquire UGC usage rights at our agency.

Feel free to copy the same action plan to avoid legal issues in your UGC campaigns.

Set Out Your Terms and Conditions 

Before approaching any content creator to obtain the usage rights of their content, write down your own Terms and Conditions for their consideration.

This shows you take copyright seriously and already have a laid-out strategy. 

In doing so, you have two main points of concern: the timeframe of use and the type of media platforms involved.

1. Timeframe for UGC usage rights

Time is both a friend and a foe when it comes to UGC.

How long do you envision your content taking center stage – a fleeting one-month affair, a moderate three-month spotlight, a half-year showcase, or an everlasting presence?

Defining the timeframe should be aligned with your strategic goals and respect the ever-changing nature of online content.

2. Media platforms for UGC usage rights

Each social media channel has unique features and different audiences.

Consider where your UGC will perform its best – Facebook’s communal stage, Instagram’s visually captivating feed, X’s real-time chatter, or perhaps LinkedIn’s professional podium. 

Think of how this content fits the nuances of each platform for maximum impact.

Beyond social media platforms, traditional media and email marketing are also options. 

Assess the strengths of each medium, ensuring your UGC seamlessly integrates with the characteristics of the chosen platform.

3. Organic use vs. paid advertising use of UGC

Influencers often charge different rates for the type of advertising a brand aims for.

If the content is going to be used for only organic reach, the cost for organic usage rights will probably be lower than if the content is displayed on paid ads by the brand.

Hence, deciding the advertising route beforehand is an important step in preparing your terms and conditions. 

Have questions on Organic vs Paid Acquisition? Find out more here: Organic vs. Paid Customer Acquisition: 12 Factors to Consider

Approach the User/Influencer

You can contact the influencer through direct messages (DMs) or their business email.

Pro tip: Using a friendly and complimenting tone always helps build long-lasting business relationships with influencers. 

A second option is using a platform that specializes in bringing brands and top-performing influencers together for collaboration.

Showcase by inBeat lets brands chat directly with influencers with proven track records and provides a platform for keeping your collaborations in order. 

Reminder: Many large-scale influencers now have a ’media kit,’ ’partnership terms,’ or alike where they highlight their rates for various types of collaborations. It is a good idea to check if the influencer provides such a kit before contacting them. 

Here’s a message template we’ve used successfully before:

Negotiate

While adopting an appreciative tone is beneficial, remember that this is also a business transaction.

Thus, do not shy away from negotiating your terms with the creator.

Treat it like a business interaction and let the back-and-forth continue until you reach a happy medium. 

Draft a Contract for Both Parties to Sign

Follow the steps below based on the type of contract you decide to go for. 

• Incorporate the Terms and Conditions, specifying the nature and quantity of the content to be shared in collaboration with the influencer.
• Outline the duration of the collaboration. 
• Identify the media channels for content dissemination.
• Zero in on the associated costs. 

This comprehensive approach ensures clarity and transparency in your collaboration with the influencer.

Reminder: Ask the influencer to put down any additional cost they would require in the event of extending the collaboration or the duration of content rights for the brand.

Follow-Up

As much as you have lawfully obtained the right to use the user-generated content by paying for it, it is still a partnership between your brand and the influencer.

Thanking them for the content they provide and their collaboration always leaves a good impression. 

Plus, following up regularly paves the way for continued collaboration and ensures you maintain a good reputation within the influencer marketing space. 

How Much Do UGC Rights Cost?

Many factors account for the price of acquiring a piece of user-generated content. 

The size of the influencer, indicated by their follower base, significantly impacts the pricing, with larger influencers requesting higher fees for their extended reach. 

The UGC’s type, length, and quality contribute to the cost, with professionally crafted content aligned with brand messaging leading to higher expenses. 

Additionally, the duration of usage rights for the brand plays a remarkable role, with shorter-term commitments for specific campaigns likely adding up to lower costs compared to extended periods of content usage. 

So, What Now?

Without any question – start now. 

Promoting your brand with UGC is extremely simple and rewarding.

With the correct strategy, there is an enormous potential for your brand’s growth through incorporating user-generated content into your social media channels.

Plus, there are platforms like Showcase to help you throughout the process, from contacting the best influencers to fine-tuning your brief. 

Learn more about how Showcase works and skyrocket your UGC campaign.