Posted on January 20, 2011 - by Team blur

The Golden Rules of Crowdsourcing

In 2006 Jeff Howe, a writer for Wired magazine, coined the term ‘Crowdsourcing.’

‘Crowdsourcing’ represented the change in attitude towards the internet as solely a communication and research tool, into its modern day guise as a worldwide marketplace, a live business forum and a new-aged globalised workforce. Virtual communities have come to the fore and are very much the present.

“No one has a monopoly on knowledge the way that, say, IBM had in the 1960s in computing, or that Bell Labs had through the 1970s in communications,” said Henry Chesbrough, an assistant professor at Harvard Business School.

He continued: “When useful knowledge exists in companies of all sizes and also in universities, non-profits and individual minds, it makes sense to orient your innovation efforts to accessing, building upon and integrating that external knowledge into useful products and services.”

The presence of Crowdsourcing and availability of knowledge has changed the equation for business.  A small business can now compete on an equal footing with the likes of Procter and Gamble or IBM. Too good to be true?

Let’s look at some examples of effective and ineffective Crowdsourcing;

Golden rule number one: crowds need a leader.

One of the classic differences that has afflicted many businesses has been the failure to find a distinction between the use of managed and unmanaged crowds.

Cambrian House, a Crowdsourced community that develops new business and technology- despite forming a crowd of more than 50,000 members and 7,000 ideas, it has failed to interact with their crowds and implement these ideas.

Cambrian House CEO, Michael Sikorsky, said:

“A key assumption for us, which proved out NOT true: given a great idea with great community support and great market test data, we would be able to find (Crowdsource) a team willing to execute it OR we could execute it ourselves. We needed amazing founding teams for each of the ideas – this is where our model fell short…

“Hence: the wisdom of crowds worked well in the model, but it was our participation of crowds’ aspect which broke down. Trying to find people willing or capable to take on the offspring (our outputs) of the CH model was hard and/or incredibly time consuming.”

The crowd is not enough- it needs to be managed and needs an inspiring leader to guide it.

Golden rule number two: don’t forget your key marketing principles.

Traditional marketing strategies and safeguards are also necessary.

Kraft’s Vegemite, already a well-established brand in Australia, piloted a Crowdsourced marketing ‘name’ campaign for a new product of Vegemite and cream cheese. After narrowing the public entries into a shortlist, Kraft executives picked a winning entry- iSnack 2.0. Two days later it was withdrawn.  

The public response to the new branding was defiant: a Facebook poll asking what people thought of the name had over 20,000 responses- and 97% hated it. Using the general public to formulate a name is one thing- making the public connect with it is quite another. Viral campaigns are powerful (see the ‘Rage Against The Machine’ Christmas number one bandwagon), and Crowdsourcing a concept cannot be considered the end of the process.     

Procter & Gamble, the company behind the likes of Max Factor, Fairy Liquid and Oral-B, have built a Crowdsourcing model to supplement the work of their 7,000 person workforce. Nearly 50% of P&G’s products are involved in Crowdsourcing, in areas including packaging, design, marketing models and research methods.

P&G use vocalpoint.com- a virtual crowd of 240,000 female consumers in the US to promote its own and partner brands. Where Kraft had failed spectacularly with Vegemite, Vocalpoint, is an open forum which tests out P&G’s proposed strategy to discover what works, what people like, and what creates an initial buzz about the product.

So where does the future take us?

Unilever have recently announced the ‘Unilever Consumer Creative Challenge’.

According to Marketing magazine: “In collaboration with MOFILM, a community of aspiring film-makers, Unilever will seek video content for 13 of its brands: Lynx, Ben & Jerry’s, Close Up, Dove deodorant, Wall’s ice cream, Knorr, Lifebuoy, Lipton, Comfort, Sure, Surf, Sunsilk and Vaseline.”

As more ‘Fast Moving Consumer Goods’ (FMCG) giants such as Unilever adopt more managed Crowdsourced campaigns, the greater their impact and popularity. Of course, it is too early to say how successful or problematic Unilever will find their consumer challenge to implement. But, as P&G have proven, it is a model that can be incorporated into existing business models and can be executed perfectly.

Outsourcing discovered the concept of work as globalisation. Open-sourcing discovered the concept of working externally. Crowdsourcing is discovering the concept of working socially. To prove a successful marketing strategy, businesses must be prepared to put aside necessary amounts of time to engage with their crowd and adopt Crowdsourcing as a genuine marketing principle, as opposed to an unmanaged novelty act.