History

The term “crowdsourcing” was first coined a by Jeff Howe in a Wired magazine article in June 2006.Jeff Howe, “The Rise of Crowdsourcing,” Wired, June 2006, http://www.wired.com/wired/archive/14.06/crowds.html?pg=1&topic=crowds&topic_set=(accessed June 20, 2010). It’s a relatively new term, but the concept dates back as far as the 1700s. Early editions of the Oxford English Dictionary were crowdsourced—thousands of volunteers submitted entries on slips of paper and these were compiled into the dictionary.

Another early example of crowdsourcing is the Longitude Prize, an open contest run by the British government in 1714. The competition was looking for a simple and practical method for the precise determination of a ship’s longitude, something that had so far stumped the experts. A clockmaker named John Harrison made the most significant contribution to the solution of this problem with his work on chronometers and is considered the winner of the competition.

With the advent of the Internet, launching a crowdsourcing project has become much easier. The Internet has enabled us to connect crowds of diverse people from all over the world in order to tackle a problem.

One of the earliest known examples of a crowdsourcing project that made use of the Internet is the 1998 Tunnel Journal project in Leidschendam. The Tunnel Journal was an interactive artwork: an LED (light-emitting diode) display integrated into the walls of a tunnel along Leidschendam’s main traffic routes. The community could feed the LED display with their own text messages via the tunnel’s Web site. The project was discontinued by Leidschendam councilors because uncensored messages began reaching the Tunnel Journal’s electronic message board directly from the Internet. After revamping the tunnel’s Web site in July 2000, a new feature was added—a dynamic filter that allowed visitors to ban texts from the electronic display. Thus the public became its own filter, preventing derogatory remarks from featuring.

Since the launch of the Tunnel Journal, Web-based crowdsourcing has slowly gained a stronger footing and crowdsourcing projects on a massive scale have been launched in recent years. The scale of these crowdsourcing projects has grown at such a rapid rate only because of the Internet and its ability to let us form large and diverse crowds, often in a short space of time. Early players in Web-based crowdsourcing such as Threadless (http://www.threadless.com) and iStockphoto came into being in 2000 and InnoCentive in 2001. Since then, the number of crowdsourcing platforms has skyrocketed. Today it seems anything can be crowdsourced, from tattoo designs to films, medical problems, music, and even engineering.

The Importance of the Community

A strong community is the key to successful crowdsourcing. The community can be viewed as a crowdsourcing platform’s most important asset—it is essentially an economically productive unit. Without it, a crowdsourcing project would be impossible to run. The creative product produced by the community is in fact what the crowdsourcing platform sells. So without creators there is no product to sell. Keeping a community interested, engaged, and rewarded is essential in retaining that community.

Unfortunately, the importance of a community, how it works, and what keeps it motivated can be often overlooked. A good example of this is a crowdsourcing platform called Cambrian House. The platform was set up as a place where the community could post new business or product ideas. The aim was to get the community to help refine, build, and test these product ideas and then the original owner of the idea could sell it. With the snappy catchphrase “You think it; Crowds test it; Crowds build it; You sell it,” Cambrian looked set for success.

Initially Cambrian House was flooded with new product ideas. However, soon it became clear that the crowd was great when it can to coming up with ideas and refining them, but when it came to building or executing them, the crowd lost interest. It was either too time consuming or too difficult to build or execute the ideas produced by the community, and the reward was not a fair trade-off for the amount of work required. The result: the site never made any money and eventually closed down. The founders of Cambrian House have gone on to found another crowdsourcing platform, Chaordix (http://www.chaordix.com).

Motivations to Participate

Communities using crowdsourcing platforms exist for different reasons. Communities like Dell’s Idea Storm and My Starbucks Idea exist because there are lots of people who have a large interest and affinity to those brands. They participate in the community because they want to influence the products and services they receive.

Idea Bounty keeps the community interested and engaged by offering the chance to tackle problems and brands that the community might not otherwise be exposed to. Individuals are rewarded for their contributions with awards for outstanding ideas, and the owner of the best solution receives a monetary prize. These are all elements that keep Idea Bounty’s creatives actively involved and motivated.

Idea Bounty, like iStockphoto, offers keen hobbyists a platform to meaningfully contribute to a cause and, importantly, be rewarded for their contributions.

In the case of Idea Bounty, it is also very clearly stated that creatives own their ideas, and legally their work is protected as their own. This ensures that creatives feel in control and unexploited. Their ideas remain highly confidential—creating a safe zone to submit ideas and explore their creativity.

For businesses and brands, there are many reasons to get involved with crowdsourcing. Foremost is the ability to tap into a diverse crowd and source varied solutions to their problems. Businesses and brands simultaneously access huge amounts of customer and consumer insight, at lower costs. With sites like Idea Bounty, brands only pay for what they use, making crowdsourcing the most effective way of sourcing solutions and ideas out there.

The Rise of the Amateur

When it comes to crowdsourcing, amateurs are competing with professionals in fields ranging from computer programming to design, and from journalism to the sciences. These people are hobbyists and enthusiasts who may not have the relevant professional qualifications but may possess talent and passion in a given field. The energy and passionate devotion to a particular subject is ultimately what drives the crowdsourcing vehicle. To a large extent, the development of technology is again the great enabler here. First, people have access to a wider pool of information through the Web. Software such as Photoshop and iMovie has made graphic design and film editing relatively easy to learn and even master.

An Ideas or Knowledge Economy

Thanks to the Internet, one can publish information at a faster pace than ever and make it available globally. An idea is now worth something—supply and demand is not regulated by money or time anymore, but rather by the value of what’s offered. An idea that took ten minutes to come up with may be just as good as, if not better than, an idea that took ten hours of ruminating.

Open Call—A Great Idea Can Come from Anywhere

It is now possible to form or access a crowd from diverse professional backgrounds and that possesses a wide range of talents in a short span of time. This wide range of talent is also known as intellectual capital.

InnoCentive (http://www.innocentive.com), a crowdsourcing platform funded by pharmaceutical maker Eli Lilly, connects with brainpower outside the company by giving outsiders access to scientific problems. Anyone on InnoCentive’s network can solve these problems. This is an example of an open call.

Colgate-Palmolive solved what appeared to be an unsolvable problem by listing it on InnoCentive. The massive packaged-goods company needed a way to inject fluoride powder into a toothpaste tube without it dispersing into the surrounding air. The research and development (R&D) team at Colgate-Palmolive were stumped, and so Colgate-Palmolive posed the problem to the InnoCentive crowd. An individual from InnoCentive’s online community drew on his experience and knowledge as a physicist to provide the solution (and claimed he knew he had a solution by the time he’d finished reading the challenge). A collaborative approach like this wouldn’t have been possible for the R&D team at Colgate-Palmolive.

Crowdsourcing blurs the lines between consumer and producer. This also means that solutions to problems can come from the most unlikely places. Crowdsourcing allows you widen the net when searching for solutions to problems, which of course increases the chance of finding the best solution.

The Difference between Crowdsourcing and the Wisdom of the Crowd

Crowdsourcing and the wisdom of the crowd are two different, though closely related, concepts.

The wisdom of the crowd can be referred to as open-source production. It is an activity initiated and voluntarily undertaken by members of the community. James Surowiecki, author of The Wisdom of Crowds, puts it this way: “the aggregation of information in groups, [results] in decisions that…are often better than could have been made by any single member of the group.”James Surowiecki, The Wisdom of Crowds (New York: Anchor Books, 2005).

One of the best examples of the wisdom of crowds or open-source production is Media Predict. Users bet on media trends such as television viewership and books that are likely to sell well. As a group, the Media Predict community is able to generate quite accurate predictions as to what will and what won’t succeed—something an individual could never do as efficiently or accurately.

In contrast, with crowdsourcing the activity is initiated by a client and the solution usually comes from an individual. The example of Colgate-Palmolive’s experience on InnoCentive is a good example of pure crowdsourcing.

Some platforms make use of a mix of both crowdsourcing and wisdom of the crowd. Threadless (an online community where users can submit t-shirt designs, vote on their favorites, and then purchase the top design each month) is a good example of this. It is crowdsourcing when individuals submit their t-shirt designs. When the community collectively votes on the best designs, Threadless is making use of the wisdom of the crowd to determine which design to print and sell that month.

Others platforms, such as Idea Bounty, are pure crowdsourcing platforms where a solution comes from an individual and is no way influenced by the rest of the community.

How Is Crowdsourcing Changing the Communications Industry?

Crowdsourcing is producing a new way of sourcing creative ideas, especially in the marketing and communications industry.

In an industry where creativity is the product, crowdsourcing allows us to access an enormous source of untapped creativity that marketing and advertising agencies do not have within their organizations. This creativity comes with very little risk and at a low cost.

The New Agency Model

Instead of allowing the marketing and branding process to be owned and managed by one agency, brands are pioneering an innovative new model with the use of crowdsourcing platforms.

A new agency model would manage idea creation as follows:

1. A brand puts a brief on a crowdsourcing platform, such as Idea Bounty, looking for the best solution to a problem. It offers a reward (usually money) in return for the best solution.
2. The brand selects the best solution and then approaches either a preselected production partner or the best-suited agency to execute the solution.

The new agency model may be the next stage in the evolution of marketing. It is inherently more sensitive to market forces as it levels the playing fields among amateur and professional creatives. Amateurs have the opportunity to communicate ideas to global brands, something they might never have had the chance to do. This also exposes the brand to a wider and more varied range of ideas and solutions. As an added benefit, positive PR (public relations) is generated and direct interaction with a consumer base can provide unexpected insights. It also helps that crowdsourcing offers a very fast and cheap way to source solutions to creative problems.

The crowd is now rivaling the corporation. With the Internet and cheap tools, consumers and communities have the power once restricted to companies with capital resources. When it comes to intellectual resources, which are king in crowdsourcing, ad agencies are lagging far behind.

Pros and Cons

Crowdsourcing can be of enormous benefit to any organization, large or small. All you need is a passionate, problem-solving community. The pros of crowdsourcing include the following:

• Handing over the ownership of your brand encourages consumer involvement.
• Interdisciplinary collaboration brings fresh input.
• Individuals have opportunities and connections that did not exist before.
• Problems can be explored at a low cost and often very quickly.
• A client pays for results and only for what is used.
• The organization can tap a wider range of talent and brainpower, which may not be present within its own resources.
• Organizations can gain valuable insight into the desires of their customers.
• As a result of collaboration and contribution, the community may feel a brand-building relationship with the given organization.

But it’s not all sunshine. Anyone exploring crowdsourcing, from either side of the equation, needs to be aware of the pitfalls, which include the following:

• Contributing individuals can be taken advantage of.
• Many clients have no agency guidance and in some cases have very little control over production value, especially if the end result of the project is completed or finished work.
• When it comes to spec work, as opposed to merely an idea, the risk-to-reward ratio is fairly high. Not only is this taking advantage of an individual’s efforts, but it can also lead to work of a lesser quality.
• Legal issues are often overlooked and the IP of an individual’s work is disregarded with no written contracts, nondisclosure agreements, employee agreements, or agreeable terms with crowdsourced employees.
• The crowd’s reliability can be somewhat altered by the Internet. As an example, many articles on Wikipedia may be of a high quality and edited by multiple people—taking advantage of the crowd’s collective wisdom. Other articles can be maintained by a single editor with questionable ethics and opinions. As a result, articles may be incorrectly assumed to be reliable.
• Added costs may be needed to bring a project to an acceptable conclusion.
• A crowdsourced project may fail due the lack of financial motivation or reward. As a consequence, a project may be subjected to fewer participants, a lower quality of work, a lack of personal interest, global language barriers, or difficulty managing a large-scale crowdsourced project.
• A crowdsourcer may have difficulties maintaining a working relationship with the community throughout the duration of a project.