The Roar of the Crowd

Thomas Oh, vice president of marketing at Austin, Texas-based Big Red Inc., hoped to make a splash with his new marketing campaign for the company's red-colored soda.

Crowdsourcing uses social media to tap into a large group of people
who compete to solve problems or generate ideas.

"We wanted to make Big Red much more mainstream and broadly appealing," he says.

So Oh, who spent 10 years at PepsiCo before joining Big Red late last year, fashioned a new brand strategy. It included TV ads and online videos around the theme, "Tastes good to be different," a variation of a retro tagline his company used in the 1950s.

Then Oh turned to a new marketing tactic that's decidedly 21st century: crowdsourcing, or using social media to tap into a large group of people who compete to solve problems or generate ideas. Working with Bethesda, Md.-based GeniusRocket, a 4-year-old firm that offers "curated crowdsourcing" with a network of creative professionals, Oh chose two spots for a launch scheduled for late June and July. He declined to disclose the campaign cost, but GeniusRocket president Peter LaMotte estimates a typical crowdsourced campaign costs about $25,000 per spot, compared with $300,000 to $600,000 for a similar effort from a traditional ad agency.

An idea takes hold

With numbers like those, it's no surprise that crowdsourcing has been making waves in marketing circles recently. Using crowdsourcing, for example, Ben & Jerry's invited its fans to an online "Creation Station" to invent new flavors, while Coca-Cola's Glaceau vitaminwater generated feedback on what the public wanted from its drink.

Wired magazine writer Jeff Howe and his editor Mark Robinson coined the word in 2006, combining "crowd" and "outsourcing." In his blog, Howe defines crowdsourcing as "the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call."

No one keeps official statistics on dollars spent on crowdsourcing, but the buzz surrounding it is growing, says Peter Fader, a marketing professor at the University of Pennsylvania's Wharton School in Philadelphia.

"The jury is still out on this technique," he says. "But I think it's here to stay."

"It's all about the wisdom of the crowds."

—Thomas Oh,

Big Red Inc

The Doritos success story

Frito-Lay's Doritos made marketing history in 2006 when the PepsiCo division turned to the crowd to create its Super Bowl ads. The viral "Crash the Super Bowl" campaigns have been crowd pleasers as well, attracting thousands of entries with cash prizes of up to $1 million and millions of viewers online and on TV. And in surveys before and after the 2009 Super Bowl, ComScore Inc. found Doritos experienced the highest net improvement in public impressions of any company running ads during the Super Bowl.

Doritos and sister brand Pepsi MAX partnered for the first time in the 2011 "Crash the Super Bowl" competition. Fans submitted their ad entries to a website, where the public voted for their favorites. Six of the crowd-generated ads aired during the Super Bowl, and two scored in the top three ads aired during the Super Bowl based on rankings from USA TODAY Ad Meter. In one, an "attack" pug knocks over a guy who was teasing him with Doritos. In the other, a house sitter tidies up using the chips.

"Year after year, our fans have proven they have the creativity and talent to match up against the best in the advertising business, and this year was no exception," says Rudy Wilson, vice president, marketing at Frito-Lay.

Approaches to crowdsourcing

Crowdsourcing is no longer a one-size-fits-all model. The process can work in several different ways:

Open competition. Agencies often have an open call to design banner ads, TV spots, logos, product packaging, T-shirts and other promotional items. This means anyone can submit designs to a website, and the crowd votes for their favorites.

San Francisco-based 99designs uses crowdsourcing to connect businesses with creative talent for logos, package design, menus, web design, banner ads, T-shirts and other merchandise, says Jason Aiken, community director at 99designs, which has a community of more than 100,000 designers.

The firm, which started in Australia in 2008, caters to smaller companies, although such giants as Dish Network and Adidas have worked with the company through their crowdsourcing agencies. 99designs handles about 1,000 new projects every week and pays out $1 million a month to designers, Aiken says.

Curated crowdsourcing. GeniusRocket launched in 2007 with open calls promoted through Twitter, Facebook and other social media. But a year ago, the company switched to "curated crowdsourcing," limiting contests to a vetted group of 300 designers, filmmakers and other creative professionals.

"The CMOs are typically willing to take the risk on [crowdsourcing] before the brand managers, who see their jobs on the line."

—Peter LaMotte


GeniusRocket now invites select production companies to compete, and then pays all competitors who reach the storyboard level. "It's one thing to ask 40 designers to come up with a logo. It's a lot to ask filmmakers to go film a commercial" when they might not get paid, LaMotte says.

The curated model has paid off for GeniusRocket. "Since we moved over to the new model, our revenue has increased 300 percent" in less than one year, says LaMotte, who would not disclose revenues.

Co-creation. Jovoto, founded in Berlin, Germany in 2006, offers clients such as Starbucks and Coca-Cola its crowdsourcing services in several different ways.

Clients can ask the 20,000 vetted members of the Jovoto network around the world—including graphic artists, copywriters, architects and other creatives—to offer their ideas privately under non-disclosure agreements, says Peter Ryder, president of North America for Jovoto. Or, clients can open up competitions to all comers.

Jovoto's strategy is collaboration, or co-creation, in which creative professionals in the community can comment on and build on submitted ideas. Participants can even invite those who comment to join their team. "We encourage a collegial community as opposed to independent participation," says Ryder. "You get more insight with that feedback that starts with a napkin sketch and becomes a refined idea along the way."

Sometimes expert juries participate, or the community votes. But it's the client's decision.

Going public

In some cases, it makes sense for companies to go public with their crowdsourcing, especially when they're focusing on issues with broad interest.

Starbucks, for example, ran a crowdsourcing contest for its "Drink Sustainably" campaign on the Jovoto platform to find ways to reduce waste from paper cups. The campaign was widely promoted among bloggers and traditional media.

The Starbucks campaign shed a positive light on the company's efforts to address a problem, Ryder says. "They were working on a problem that other people are interested in, and other media, traditional media, picked it up," he says.

Pros and cons

Despite the timely appeal of lower marketing costs and the potential for good publicity that crowdsourcing offers, it's not the right fit for every project, say experts.

"I'm a big fan of crowdsourcing, but there are limitations."

—Peter Fader

University of Pennsylvania's Wharton School

"I'm a big fan of crowdsourcing, but there are limitations," suggests Wharton's Fader. He maintains the approach is useful for "moderately creative tasks," such as coming up with a logo or tagline or developing ad copy.

"Traditionally, the advertising creation process has been a terribly inefficient process," he says.

"Crowdsourcing has the potential to tighten it up quite a bit. But there can be a lot of hype and disappointment."

Fader says he was not impressed with the crowdsourced Doritos ads. "The ads were terrible. They did well because of the pure novelty," he says. And for major creative tasks, such as discovering the next breakthrough product or genius marketing strategy, the crowd might not offer that much wisdom, Fader contends.

"Crowdsourcing doesn't work when you really need to think out of the box," he says.

Crowdsourced campaigns that are open to all participants—as opposed to private campaigns limited to invited participants—also can result in the sort of PR nightmare that Chevrolet experienced in 2006 when it used crowdsourcing to produce ads for its Chevy Tahoe SUV, LaMotte says.

The effort resulted in crowd-generated commentary on the SUV, such as "It's Global Warming Time," as well as criticism of former President George Bush's energy policy and the U.S. car industry.

But ultimately, says Ryder, the traditional "rock star" model of advertising is changing through crowdsourcing and co-creation.

"We're in the cusp of change, and there are some very interesting dynamics that are taking place in traditional agencies and traditional companies," he says. "They're seeing proof now that they can get results in this new paradigm (of crowdsourcing)."

LaMotte suggests that chief marketing officers and other corporate executives might be more willing than brand managers to risk trying something new like crowdsourcing. "It's the old 'You don't get fired for buying IBM' mentality," he says. "The CMOs are typically willing to take the risk on a new form of sourcing content before the brand managers, who see their jobs on the line."

Major brands that don't "do some sort of crowdsourcing are completely missing the boat because it's all about the wisdom of the crowds," adds Big Red's Oh.

Howard Wolinsky is a Chicago-based business/technology writer and an adjunct professor at Northwestern University's Medill School. His work has appeared in BusinessWeek, Chicago Tribune, Crain's Chicago Businessi and Chicago Sun-Times.