Analyzing The Advantages of User-generated Content Advertising Platform: A Case Study on Little Red Book

Abstract

With the introduction of Web 2.0, internet users have become targets of information dissemination. Advertising based on user-generated content (UGC) has gained popularity. The purpose of this study was to investigate the benefits of the Little Red Book. Using Little Red Book as a case study, relevant data on UGC and the Little Red Book platform over the past five years, along with the 4Ps factors of marketing mix theory, were applied to analyze the three primary reasons why Little Red Book successfully occupied a large share of the UGC market and to provide three recommendations. First, Little Red Book's user verticality is high, accurately positioning the female market and the middle-to-upper-class demographic. Suggest increasing the number of users, penetrating a "shrinking market," and developing the economy. Second, Little Red Book UGC advertising is driven by content quality, which is advantageous for brand image formation. Propose establishing an online e-commerce business and a commercial closed-loop. Lastly, the UGC advertising investment cost for Little Red Book is low, and the return rate is high. It is advised to standardize the advertising pricing mechanism, increase the KOL threshold, and establish a brand cooperation system in collaboration with MCN.