UGC and paid ads are great marketing tools but which one is the most profitable?
The go-to method, PPC or paid ads, is becoming more costly and less effective. Engagement is shifting, with consumers avoiding ads where possible and trust and behaviour are changing with the introduction of AI in search engines, leading to zero-click results. UGC, on the other hand, can avoid high CACs and CPAs, deliver trusted content that consumers now prefer and achieve a better ROI.
If you’re looking for impactful ROI, not just impressions and clicks, then let’s break down each ad provider and why UGC is the alternative.
What Defines a Good ROI?
Before we examine the data, let’s define what a good ROI is. It’s important to note that defining this is subjective and what might be good for us might not be for you. In general, as marketers, we should always strive to achieve the maximum ROI possible. Setting clear KPIs and goals allows us to determine what a good ROI is.
The key factors to measure ROI include:
- Return on Ad Spend (ROAS): How much revenue is being generated for every pound spent?
- Customer Acquisition Cost (CAC): What is the cost of acquiring a paying customer?
- Lifetime Value (LTV): Are these customers likely to return, or are they one-time buyers?
- Conversion Rates: Are people buying or just engaging with the content?
Now, let’s see how UGC, TikTok Ads, Google Ads and Meta Ads stack up.
UGC: High-Trust, Low-Cost and a Proven Profit Driver
Unlike traditional ads, UGC (User-Generated Content) thrives on authenticity. It’s real consumers creating real content about products they love. Consumers are 2.4 times more likely to trust UGC than branded content, according to everyonesocial.
Other studies have shown that:
- UGC-powered ads deliver 4x higher click-through rates than standard paid ads.
- 79% of consumers say UGC influences their purchasing decisions.
- UGC-based ads can reduce cost per click by up to 50% compared to traditional ad creatives.
For brands, this means higher engagement, lower ad costs and better conversions. When repurposed across multiple channels, a single piece of UGC can work harder than any paid ad campaign.
Scaling UGC is a strategy that requires finding the right creators and ensuring content aligns with brand goals. Integrating it into the paid ad strategy is where most brands struggle. When done correctly, UGC delivers long-term value that extends beyond a single campaign.
TikTok Ads: Cheap and Fast with Low Intent
TikTok’s advertising model is built for reach, engagement and viral potential. With 60% lower ad costs than Meta, it’s an attractive option for brands seeking to reach a younger audience.
TikTok Ads perform well for brand awareness and impulse purchases but they don’t always guarantee that users will be ready to make a purchase. TikTok is an entertainment-first platform, meaning conversions don’t always follow high engagement.
That being said, brands leveraging UGC within TikTok Ads see significantly better results. When combined with TikTok’s ad platform, UGC feels natural, making ads blend more seamlessly with organic content.
Google Ads: High Intent and High Cost
Google Ads remains a powerhouse for high-intent purchases, particularly in search campaigns where users are actively seeking products. It’s the go-to strategy for businesses seeking immediate sales, particularly in service-based industries or e-commerce based websites.
However, Google Ads are expensive. The cost-per-click (CPC) has increased by 20% year-on-year and in competitive industries, it’s not uncommon to see CPCs go beyond £10 per click.
That’s why brands using UGC in retargeting often see better results. Instead of relying solely on Google Search Ads, combining paid search with high-performing UGC in Display Ads and YouTube campaigns helps lower acquisition costs and boost credibility.
Meta Ads: Retargeting Power But Is It Worth It?
Meta Ads were once the standard of digital advertising but costs are rising and engagement is declining.
Despite Meta’s powerful targeting tools, the platform has lost some of its dominance due to iOS privacy updates. Ad costs are rising – CPMs (cost per 1,000 impressions) have increased by 89% in the last two years.
Nevertheless, Meta Ads still work incredibly well for retargeting. Brands that utilise UGC in their Meta Ads often see better conversion rates, as UGC-based content feels more authentic and engaging compared to polished branded ads.
The Verdict: What Drives Better ROI?
If we’re talking about which methods provide a better ROI, there is a breakdown below for UGC, TikTok Ads, Google Ads or Meta Ads:
| Strategy | Best For | Strengths | Challenges |
| UGC | Brand trust & conversions | High engagement, lower ad costs, scalable | Harder to scale without a strategy |
| TikTok Ads | Brand awareness & quick reach | Lower cost, high engagement | Lower purchase intent |
| Google Ads | High-intent purchases | Strong conversion rates | Expensive in competitive industries |
| Meta Ads | Retargeting & e-commerce | Best for remarketing | Rising costs, lower ROAS |
Final Thoughts:
- If the budget is tight, UGC is the best long-term investment.
- If you need fast reach, TikTok Ads might be the best bet.
- If you need high-intent conversions, Google Ads probably win, although they’re costly.
- If you have an established brand and strong retargeting, Meta Ads may work for you best.
Maximise Your Profit with the Right Strategy
Advertising isn’t a guessing game, it’s about testing, tracking and optimising.
If you want to see what’s driving the best ROI for your brand, we’ve helped businesses scale smarter, lower ad costs and boost conversions.
Get in touch with us to learn more today.
