What’s Being Ignored in the Crowdsourcing Debate

power-of-the-crowdThe debate around crowdsourcing – the outsourcing of a job or problem to a large and open group of people – is heating up again as an increasing number of brands are gaining headlines by launching design and ad creation contests.

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On one side of the debate are those who argue that crowdsourcing is nothing more than outsourcing cheap labor and a temporary fad, while on the other are those who believe that involving large, undefined groups of people can increase creativity and productivity at lower costs.

Critics of crowdsourcing, usually people with an Ad Agency or a professional design background, are quick to point out that crowdsourcing is just a fashionable term for something that’s existed for ages; call it freelancing, outsourcing, competitions or spec-work. The latter, I’ve learned, is somewhat of an insult in the design industry which has even taken an official position on the subject through AIGA. Probably the strongest point I’ve encountered though, is regarding the sustainability of a model where many spend the time to produce work but only one gets paid for it.

Notwithstanding these points – crowdsourcing has had a growing number of success stories and media exploits recently: Unilever dropping its agency Lowe to pursue a crowdsourcing ad campaign for their Pepperami brand. Netflix announcing the $1M winner in its long-running call to improve its recommendation algorithms. The impressive growth of services like Crowdspring and Innocentive. Mofilm crowdsourcing video ads for large brands and linking these to the major film festivals worldwide. The self-proclaimed first crowdsourcing Ad Agency, Victors & Spoils. Across the board, participation in these crowdsourcing campaigns has been strong, with businesses and brands expressing satisfaction with the final creative products received.

What both sides of the debate are ignoring, at least in the advertising space, is the potential impact of the Real Time Web on the future of crowdsourcing. With so many available tools that facilitate online conversation and collaboration, there can be as much value (if not more) in the crowdsourcing process as there is in the end result. The experts call this Engagement. In other words, while the ROI for most of the crowdsourcing activities to date has come from the cheaper creative result (and the press coverage that came with it) – by treating the process as an interactive and potentially viral campaign, crowdsourcing ROI could come from both Engagement and the creative result.

What drove me to contribute the millionth opinion on the subject is my surprise at history repeating itself once again – the reluctance of most Agencies to embrace a new model in its early stages. After all, who is in a better place to generate the kind of value described above than those who are experts at client brand strategy, campaign planning and insight? The case for Agencies to embrace real-time web crowdsourcing seems pretty straight forward:

  • The strength of a Client proposition that combines the Agency’s partnership, strategy and direction with the benefits (Engagement, creative and cost) of crowdsourcing.
  • Being able to generate more value from the individual creative contributions resulting from crowdsourcing by recognizing broader trends or individual brilliance.
  • Extending the life of a creative team on a single client account (one of the issues behind the broken model of agencies)

Looking ahead:

Crowdsourcing in the real time web is in its early stages and as such, is bound to evolve from its current state. For it to become a sustainable model, there needs to be a way to improve the current “many work one gets paid” issue. As the software world has been able to teach us with open-source communities, recognition, reputation and reward (both monetary and non) are an important factor. In applying the open-source principles to an Agency-driven model, I can imagine a platform that allows agencies and advertisers to rate contributors (reputation & recognition) and assign a share of the profits to those who had the most impact on overall ROI.

I for one am enjoying the debate and look forward to its evolution.

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  • jeremyhayes

    Great post. I particularly the “looking ahead” piece. The analogy to Open Source is a good one. Monetary rewards are important, but some of the intangibles ('a good way to get hired', 'a good way to get recognition') will be equally important as drivers of open innovation. Tools for collaboration for crowdsourcing/OI prizes will also be important as I believe that the 'winner-takes-all' model of prize-based innovation will limit the growth of OI. Firms/OI intermediaries need to find a way to reward the 'person who comes second', give good feedback to failed submissions to get people to try again, and recognise the abilities of those who constantly submit solutions, but may not be successful. Some sort of rating/reputation mechanisms can help here.

    Finally, from talking to some successful OI solvers, it is clear that the 'prize' is not always enough. Some solvers want a share of the future profits that will come to the firm through adoption of their innovation. Walkers Crisps in the UK gave 1% of future sales to the winners of their crowdsourcing competition
    http://www.walkers.co.uk/flavours/#/howitworks/

  • http://twitter.com/derFrankie Frank Neulichedl

    Nice thoughts but you are missing 3 essential points.
    1) The many work and one wins works because we are in a market of designer aboundance. It's quite normal for classic advertising agencies and is called “pitching”. Sometimes the losers get a small reward for the effort, but most of the times the winner takes it all. Therefore by transponing this to the crowd you just scale this usual practice.
    2) To use crowdsourcing as a viral tool you must reach the critical mass that itself is news and recognized by the consumer. The people who “create” are always a small part of the society, just think about how many of your readers write comments
    3) Most open source monetization is build around services – well advertising agencies make most of their revenue exactly through services – the creative process and the graphic labour is not the heart of the adevertising agency. This is the romantic view we see in hollywood movies.

  • http://digitalpopuli.com Cristian

    Hi Frank, appreciate your comments!

    On your first point, though I agree designer abundance has made the current model possible, I'm not as sure it makes it sustainable long-term. For one, pitching for work and doing that work without getting paid are two different things. Particularly since this shouldn't be exclusively applied to design, but also to video, flash, etc.

    Agreed on the critical mass requirement for a viral campaign, hence qualifying it as “potentially viral”. The main point was about engagement, which is about interaction, conversation and visibility – which in a campaign doesn't have to be limited to those who choose to submit work.

  • http://digitalpopuli.com Cristian

    Thanks for the comments and Walkers link Jeremy – nice example of profit sharing.

  • http://twitter.com/derFrankie Frank Neulichedl

    Well, let's separate the two parts. Crowdsourced design where many supply and one wins is something we can both agree has existed the whole time – only the rewards are getting smaller. This will go down until they reach pratically zero – like it or not. Most of today's freelance graphic designers will only survive if they can sell more than just graphic design.

    As for the “free” crowdsourced design the answer is simple. Is the ROI (Return on Investment) in such a project – mostly attention – for you as a professional enough to engage? Is the recognition big enough to boost your portfolio in such a way to find paying customers for other projects? If not don't do it – leave it to the amateurs (btw. amateur means “the one who loves the things he does”)

  • http://jimmyhendricks.artistichub.com/ Simon Baer

    I really enjoyed the post and the debate that it has started. Christian, I absolutely agree that a crowdsourcing effort can also engage that brand's community. The challenge as Frank points out is getting the crowsourcing efforts (largely designers or other people outside of the brand's community) into the brands distribution channels (facebook, twitter, etc) and get it picked up by their brand champions. My attitude is that if you want your brand's champions to pick up the story it needs to be Remarkable and Marketable- a certain shock factor doesn't hurt.

  • DanIdeaBounty

    Hi

    Great post and some very important points. I represent Idea Bounty (the platform that Unilever used to crowdsource for its Peperami brand) and much of our thinking about who we are is very much inline with some of your points.

    Initially the reaction to Idea Bounty was one where people were of the opinion that we were a direct competitor to the agencies -infact we like to think of ourselves as a tool for agencies to embrace rather than compete with. Our model is constructed in such a way the we only look for ideas and there is always a need for there to be someone to execute and produce the idea. One of the reasons why Unilever ended its relationship with Lowe was becuase they felt that after 15 years of working on the account Lowe were not producing any fresh ideas – To us this would have been the perfect opportunity for Lowe to step in suggest to the client that they source ideas through the crowd with the guarantee that A) they would be involved in picking the best idea and B) They get to produce the idea. Added to that the high level if engagement and different perspectives on the brand you receive is invaluable.

    Crowdsourcing is definitely here to stay in one form or another and the sooner agencies start embracing it the better. Thanks for the post again!

    Cheers,

    Daniel
    @IdeaBounty

  • http://twitter.com/neurokinetikz Michael Lacy

    “Crowdsourcing in the real time web is in its early stages and as such, is bound to evolve from its current state. For it to become a sustainable model, there needs to be a way to improve the current “many work one gets paid” issue.”

    Indeed. And there is. I encourage you to take a look at quirky.com. Every week we crowdsource the design and development of consumer products and reward all contributors with cash.

    The way it works is that users earn influence for submitting and supporting winning ideas (product ideas, logos, product names, taglines, industrial design, etc) as well as participating in market research. Influence is essentially an equity stake in a product's sales. And 30% of product revenue is paid out to product influencers.

    With this model, we can track user performance over time and discover the most influential members of the community. And since they have earned the most influence, they have also earned a proportionately large share of the product revenue that gets paid back to users.

    It's a powerful feedback loop.

  • rickliebling

    Great stuff here. For me the issue is one of purpose. I'm interested to see how brands could you crowdsourcing to solve very specific, very challenging problems. In this manner, getting a bunch of submissions and hoping one is really good is the wrong way to look at it. You want to have a large pool of hyperniche experts, each one of which can add the very best answer in his/her field to the overall solution.

  • http://www.rickliebling.com/ Rick Liebling

    Great stuff here. For me the issue is one of purpose. I’m interested to see how brands could you crowdsourcing to solve very specific, very challenging problems. In this manner, getting a bunch of submissions and hoping one is really good is the wrong way to look at it. You want to have a large pool of hyperniche experts, each one of which can add the very best answer in his/her field to the overall solution.

  • http://twitter.com/derFrankie Frank Neulichedl

    I like the idea to use hyperniche experts for crowdsourcing – is the evolutionary step of the niche-marketing research. Not just ask the niche what they like, but actively engage them to start something they would buy or use.

    Obviously the creation process has to be filtered and guided – but think about the posibilities: A big brand ask you what the next product should be. Maybe the next trend could be Nichesourcing-

  • kingderek

    Good post, I think the next generation crowdsourcing will be elitesourcing as they call it at Edge Amsterdam (http://www.edge-amsterdam.com) where they say that crowdsourcing only works with the right crowd. And I think it is not about logo design. But brands are looking for brand and product innovations, that's where they should use the creative elite for. And especially the young talents. They walk on the edges of their creative abilities with ease and are the true motors for creative innovation.

    But it all comes down to a fair and balanced revenue sharing model between the creators and the network.

  • http://twitter.com/uhhuhthatkate Kate Hiscox

    Excellent post! I'm the founder of newly launched Spudaroo.com which crowdsources business material including social media releases, newsletters, slide presentations, business plans, web content and so on.

    The way I see crowdsourcing, its an extremely efficient way of getting things done at a price that is agreeable to the project owner and the expert. In my experience, loyalty is formed very early on in the process between the PO and an expert and the crowdsourcing website where that connection was made, is doing nothing more than facilitating an efficient and timely conclusion to the project with both parties satisfied.

    I started Spudaroo because I was tired of basing purchase decisions on proposals and so far, the feedback has been tremendous. Crowdsourcing is absolutely here to stay but I agree, it will be interesting to see the evolution of the model.

  • blogulak

    Cristian, I recently discovered your blog and I'm really enjoying it. I really like the length and level of analysis in your posts – not too brief but not too long. Good topics as well. Just wanted to encourage you to keep blogging.

  • http://digitalpopuli.com Cristian

    Thanks for the kind words :-)

  • joshbarnes

    Great post Christian-

    You really make a point that we've been trying to emphasize from the beginning; that the process of engagement in a crowd sourced advertising campaign is as valuable or more than the end product.

    Our community spends time poring over the creative brief, brainstorming on ideas, and then creating video, print or interactive advertising. Then they reach out to their social networks to promote their creation. Their social network then comes back to our site (Zooppa.com) to view, comment on & vote on the different pieces of creative. This creates an entire ecosystem of brand engagement, as the consumer public is not only being exposed to brand images, but is actively thinking about the brand at each step.

    Here is a link to a white paper about crowd sourced advertising from Zooppa:
    http://blog.zooppa.com/tips-about-crowdsourcing…

  • joshbarnes

    Great post Christian-

    You really make a point that we've been trying to emphasize from the beginning; that the process of engagement in a crowd sourced advertising campaign is as valuable or more than the end product.

    Our community spends time poring over the creative brief, brainstorming on ideas, and then creating video, print or interactive advertising. Then they reach out to their social networks to promote their creation. Their social network then comes back to our site (Zooppa.com) to view, comment on & vote on the different pieces of creative. This creates an entire ecosystem of brand engagement, as the consumer public is not only being exposed to brand images, but is actively thinking about the brand at each step.

    Here is a link to a white paper about crowd sourced advertising from Zooppa:
    http://blog.zooppa.com/tips-about-crowdsourcing…