Crowdsourcing

What is it?

Image credit: Alexander Kesselaar

“Crowdsourcing is the act of taking a task traditionally performed by an employee or contractor and outsourcing it to an undefined, generally large group of people in the form of an open call” (Wikipedia).

Its not a new idea…

The 19th century Oxford English Dictionary was crowdsourced.

In 1714 the Longitude prize was awarded for the simplest solution for determining a ships longitude.

Then came the Internet

Now the crowd:

•Is larger•Is more connected•Offers more levels of skill for contributions

The Internet:

•Provides a global distribution channel•Allows for faster publishing•Means ideas are now regulated by value

Organisations can gain insight into their customers’ needs and desires and build products and services that meet them.

Commercially clients can:

•Pay once-off for numerous solutions•Pay only for solutions they use•Not limit themselves to ‘traditional’ solutions

Image Credit: Creative commons, AMagill

Non-commercially the crowd can create a pool of info and ensure it is accurate.

e.g. Wikipedia: http://www.wikipedia.org

Early adapters of crowdsourcing:

Threadless (www.threadless.com)iStockphoto (www.istockphoto.com)InnoCentive (www.innocentive.com)

The “rise of the amateur”

An idea that took ten minutes to come up with may be as good or better than one that took ten hours to develop.

Four types of crowdsourcing:

•Invention•Creation•Organisation•Prediction

Invention – sourcing ideas for new or existing product development. e.g. My Starbucks Idea (www.mystarbucksidea.com)

Creation – new content created, owned and maintained by a community on an existing platform.e.g. Idea Bounty (www.ideabounty.com).

Organisation – Create new content by organising already existing content. e.g. Digg (www.digg.com)

Prediction – predict trends by asking the community to submit ideas and vote.e.g. Yahoo! Buzz (www.yahoo.com/buzz)

How does it work in business?

•To develop products•For new business and initiatives•To communicate ideas•Prediction and forecasting

Two approaches to managing a campaign:

1. Centrally located:

A guiding force is used to channel ideas and formalise the process.

Idea Idea Idea

2. Community controlled:

The community controls the process and the outcome.

The Community

•The most important asset in crowdsourcing•Aim to understand why they exist and what motivates people to participate

It is vital to understand and address community needs:

•How should it be managed?•What rewards should be put in place?

Pros of crowdsourcing

•Consumer involvement•Fresh input•Opportunities and connections that did not exist before•Problems can be explored quickly at low cost

•Only pay for what is used•Tap into a range of talent outside internal resources•Gain valuable insight into the desires of their customers

Cons of crowdsourcing

•Lack of agency guidance or strategic direction•Little control over production value•For spec work the risk/reward ratio is high•Ethics and opinions could be questionable, leading to incorrect assumptions of reliability

•IP of work is often disregarded with no written contracts etc.•Added costs may be needed to bring a project to a conclusion•Lack of financial motivation or reward may lead to lower work quality•Difficulties may arise in maintaining a working relationship with the community

The new agency model

Marketing and branding are no longer owned and managed by one agency.

Through crowdsourcing, amateurs can now communicate ideas to global brands.

This generates PR and direct interaction with a consumer base.

Image credit: ming888

But a marketing agency will still be needed for brand strategy development.

Remember...

•Proper planning is essential!•Remunerate communities adequately to avoid a negative PR backlash•Use crowdsourcing to tap into the collective knowledge of more than one billion people

Further Reading?

www.quirk.biz/emarketingtextbook