Latest / Social Media Marketing with Fexingo: Instagram, TikTok, LinkedIn, and Platform Strategy / How Brands Use Social Media for UGC Licensing
Transcript
- Lucas: There's this moment every social media manager knows — you're scrolling your feed, and a customer posts an incredible photo of your product. It's better than anything your agency produced. And your first instinct is to hit repost. Luna: Right, and for years that was basically the end of the story. You'd reshare it, tag the person, maybe drop a heart emoji in the comments. Lucas: But in the last couple of years, a growing number of brands are taking a different step. They're not just reposting — they're formally licensing that user-generated content. Paying the creator for the right to use the image in ads, on packaging, even on billboards. Luna: And that's a meaningful shift. Because legally, when somebody posts a photo on Instagram, they still own the copyright. Reposting might be a gray area, but using it in a paid ad without a license? That's infringement. Lucas: Exactly. And a lot of brands learned that the hard way. There was a well-known case a few years back where a major beer company used a fan's photo in a national campaign without permission, got sued, and settled for an undisclosed sum. That sent a signal. Luna: So now we're seeing brands get ahead of it. They're proactively reaching out to creators, offering a fee, and signing a licensing agreement. And there are even platforms emerging to automate this whole process. Lucas: Quick honest thing — a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making this many episodes ad-free. If these conversations about smart marketing moves have sparked something you've actually used at work, that kind of support is what keeps the show going. Luna: Yeah, it's a small group that makes it possible for us to stay independent and dive deep on topics like this without any sponsor constraints. Lucas: So back to UGC licensing. One of the platforms I'm seeing more of is called 'License this' — it's a tool that integrates with Instagram and TikTok, allows creators to mark their content as available for licensing, and brands can browse, negotiate, and pay directly through the platform. Luna: And what kind of money are we talking about? I've seen numbers ranging from $50 to a few thousand dollars for a single post. Lucas: The average seems to be settling around $500 for a standard license — that gives the brand the right to use the image across social and digital ads for a set period, usually six months to a year. Exclusive or longer-term deals go higher. Luna: That's not huge money for a brand, but for a regular person who just happens to take a great photo, it's meaningful. And it legitimizes the creator's role. Lucas: Let's talk about a specific example I came across. An outdoor gear company — let's call them 'Trailblazer' — had a customer post a photo of their tent at sunrise in Yosemite. It was genuinely stunning. The brand reached out, offered $750 for a non-exclusive license, and the creator accepted. Luna: And they used it where? Just on Instagram? Lucas: Initially yes, but then they put it in a catalog, retargeted ads, and eventually a billboard outside REI in Denver. The creator was thrilled — they got paid, got credited, and their photo was seen by millions. Luna: That's the ideal outcome. But I think there's still a lot of confusion among smaller brands about what constitutes a license versus just asking permission. Lucas: Huge confusion. Permission is informal — a DM saying 'hey, can we share this?' That doesn't grant any legal rights. A license is a contract that specifies usage, duration, territory, and compensation. It doesn't have to be complicated — one page is fine — but it needs to exist. Luna: And what about the platforms themselves? Instagram and TikTok have terms that say they can use your content, but that doesn't transfer to brands. Lucas: Right. The platform gets a license from you just by posting — that's in the terms of service. But that license is for the platform to operate, not for a third-party brand to use. Brands need their own license directly from the creator. Luna: So if you're a social media manager listening, the takeaway is: if you want to put a customer's photo in an ad, don't just ask. Pay them and get it in writing. Lucas: Exactly. And the good news is, there are now standard templates available. The American Society of Media Photographers has a basic UGC license template you can adapt. Or you can use a platform like License this that handles it all. Luna: I also think there's a strategic benefit beyond just avoiding lawsuits. When you pay someone for their content, they become a brand advocate. They're likely to share that they got paid, which encourages others to post high-quality content hoping to get licensed too. Lucas: It creates a virtuous cycle. One outdoor brand I read about built an entire campaign around licensed UGC — they paid twenty creators, got twenty photos, and used them across a quarter's worth of ads. The total cost was about $15,000 — a fraction of what a professional shoot would have cost. Luna: And the content is probably more authentic. Real people in real situations, not models pretending. Lucas: Which is exactly what younger consumers respond to. A 2025 study from a marketing analytics firm found that ugc based ads had a 4.5 percent higher conversion rate than studio-produced ads for the same product category. Luna: So the economics work. But I wonder — is there a risk of commodifying the relationship? If every brand starts trying to license every good photo, does it feel less organic? Lucas: It can, if it's done poorly. The key is to approach it as a partnership, not a transaction. You're recognizing the creator's work and compensating them fairly. The best brands also give the creator creative control — they don't photoshop the image to death. Luna: And they credit them. That seems obvious, but I've seen brands license an image and then not tag the creator in the ad. That's a quick way to sour the relationship. Lucas: Absolutely. The license should include attribution requirements. Most creators are happy to have their name associated with a brand they like — as long as they're paid and credited. Luna: So where do you see this going in the next year or two? Do you think licensing will become the default for any brand using UGC in paid media? Lucas: I think it will, especially as more brands get burned by lawsuits or simply want to do right by creators. And the tools are getting better — there are now ai powered platforms that can scan social feeds, identify high-quality UGC, and even suggest licensing terms. Luna: That sounds efficient, but also a little creepy. Automated outreach to license someone's vacation photo? Lucas: It can be, if it's not handled with care. But done right, it's just scaling a process that was already happening manually. The human touch still matters — a personalized message goes a long way. Luna: Fair. And I suppose for creators, having a clear path to get paid for their content is better than hoping a brand might ask nicely. Lucas: Exactly. The old model was: post great content, hope to get noticed, maybe get a free product. The new model is: post great content, mark it as licensable, and get paid. That's a more sustainable ecosystem. Luna: And it raises the quality bar too. If creators know there's a potential payday, they might invest more in their photos and videos. Lucas: Which benefits everyone — the brand gets better content, the creator gets compensated, and the platform gets more engagement. It's one of those rare win win win situations. Luna: I want to circle back to something you mentioned earlier — the idea that a one-page contract is enough. Can you give listeners a sense of what that contract should include? Lucas: Sure. Minimum: the parties, the content being licensed, the allowed uses, the territory, the duration, the fee, and attribution requirements. Both sides sign. Done. Luna: And exclusive versus non-exclusive is a big distinction. If you want to be the only brand using that image, you pay more. Lucas: Right. Non-exclusive means the creator can license the same image to other brands. Exclusive means they can't. Most brands start with non-exclusive unless the image is central to a major campaign. Luna: So what's the one thing you'd want every marketer to remember about UGC licensing? Lucas: That a like and a share are not a license. If you're using someone's content to sell your product, you need their permission in writing, and you should pay them. It's not just legal — it's respectful. Luna: And it makes business sense. The ROI on licensed UGC is strong, the legal risk is low, and the goodwill with creators is high. Hard to argue with that. Lucas: I think we'll look back at the era of free UGC the way we look back at unpaid internships — something that seemed normal for a while, but eventually we realized creators deserve more.