20 Aug 2015 Olapic – Leading the Charge for Scalable UGC Images
As a stock photographer, it’s important to be aware of the business models that compete with your industry.
Olapic, in my opinion, is one of the most impressive companies working in the User Generated Content space.
Isn’t Microstock UGC?
Microstock was previously referred to as UGC because the contributors were considered a crowd, unlike the small quantity of carefully vetted traditional stock photographers. It was the original crowdsourced marketplace. Today when people say UGC in relation to photos they’re talking about the even bigger crowd of ‘consumers’ on social media sites like Instagram, Facebook, and Twitter, producing photos mostly with mobile phone cameras.
The Business Model
The Olapic business model is easy to understand when looking at the big picture. They work with brands to get permission from Instagrammers for the brands to use their photos.
They manage the entire process, starting with automating the collection of photos by analysing hashtags and other metadata, as well as enabling direct submission. They then filter for suitability, secure the rights from the owner, and even help measure results.
By finding images of the brands’ products or locations on social media sites, Olapic enables brands to replace, or at least complement, their product photos and stock photos with authentic, user-generated content (UGC). They also provide analytics to determine which photos are likely to convert best in which context.
This NYC based company was founded in 2011 by a team of three Spanish graduates from Columbia Business School, which ended up contributing to the company’s seed funding. CEO Pau Sabria and Managing Director Luis Sanz are both electrical engineers with backgrounds in tech business. Co-founder Jose de Cabo studied international business before attending Columbia and has a history of jobs in marketing strategy.
Olapic got started with a non-disclosed initial funding round in September 2011, followed by another $1M seed round in April 2012 in which Columbia’s Lang Fund participated along with various other investors. In July 2013, they had already become profitable, and they raised another $5M in their Series A round. Just this past June, their Series B round brought in $15M, primarily from Felix Capital, as well as Unilever Ventures and some previous investors. In total, they’ve raised $21M in capital in 4 years.
Olapic started targeting established brands and media companies. They then expanded to e-commerce companies and are now focusing more on online retailers which has proven to be the most profitable market for their services. Since their Series A funding in 2013, they have been doing lots of product development for this niche.
Today, their client base consists mostly of major brands and online retailers who cater to young audiences. This is no surprise, since UGC marketing tends to perform better with younger demographics. Younger consumers tend to interact more actively with brands rather than being passive targets of marketing campaigns.
How Olapic Works
The platform helps brands legally use crowdsourced UGC for marketing purposes. Brand clients create their own online marketing sites with Olapic to solicit submissions from customers. Customers submit images to the brands through social media by using a specific hashtag, or by direct upload to the brand site, at which point the content is available for the brands’ online use.
Clients can curate submissions to make sure that only images that meet their branding standards are displayed in their official materials. Olapic uses both human eyes and an advanced algorithm (which tracks 46 different signals) to help clients grade content by its user engagement potential and choose the highest-value images. Finally, the platform is designed to make it easy for brands to secure customers’ permission to use their images via other channels, such as print ads, in-store displays, and e-mail marketing.
Since 2013, they have continually added features to enhance the functionality and usability of the system for online retailers. First, they introduced an analytics suite for clients to track and analyze their results, with tools enabling finer control over the selection of images. Later, they launched a user behavior analysis tool.
In 2014, they released a tool to turn user images from other social networks into Pinterest store portals. For an example, a client can link a customer image from Facebook, and when a user clicks the link, they’re directed to the Pinterest page for the product in the image, rather than to the Facebook image itself.
Why UGC is Better
Olapic’s founders like to point out two big strengths of their product. First, there is some movement in the stock photo industry away from ‘stocky’ shots and toward mobile photography and “authentic and natural” style. Second, while microstock is cheap, UGC is often free. Users are flattered when brands feature their content and tend to grant commercial usage of it for free, or at very low cost.
Better than Stock
However, their marketing strategy is not only about highlighting the perks of UGC, but also about degrading its main competitive product, stock photography. They essentially condemn the use of stock photos in visual marketing, calling it dated and claiming that it no longer produces good (or any) sales results. Olapic’s CMO recently wrote a post claiming – cue the eye-roll – stock is dead.
Resolving the Major Hurdle of UGC
The primary issues keeping use of UGC images out of the mainstream are legal ones, namely the lack of releases and presence of brands. Olapic has solved most of the other issues with technology, and their business model takes care of these legal ones.
The owners of the brands, products and locations that appear in the images are that of the client, so property releases are not required. And the people appearing in the images, presumably most often also the owner of the photo, can provide the consent required during the permission gathering process.
Stock is Dead, Long Live Stock
Olapic has developed a truly great and original business model, and has proven it has a place in the market.
Stock cannot compete with photos of branded products or locations, but that’s not what everyone wants, or what is suitable for every purpose. And stock is certainly following the trends for authentic and intimate imagery.
There’s no reason to panic. Stock will always have its place. But this is certainly one very interesting business model, and company, to follow.