Crowdsourcing Is Not A Viable Business Model And Here's Why

Crowdsourcing is to 2009 as Twitter was to 2008. It was the sparkly object that many assumed was the second coming.

I'm a little sick of it, to be honest.

Don't get me wrong - I'm all for innovation. But I'm not for innovation without strategy, without a vision that goes past the next few month. Crowdsourcing is the fool's gold of internet business models.

This ire has been building, but is partially due to reading Rick Liebling's new e-book Everyone Is Illuminated. Rick has been doing some brave thinking about crowdsourcing and I applaud his effort with this e-book. It's other experts I take issue with.

Which experts am I talking about? The ones who claim that crowdsourcing will replace agencies. Those who think you get better ideas from the crowd than individuals who study this process everyday. If that's you - you're in my sights.

This is all to support Rick's point that crowdsourcing is a means, but not as an end in itself. That gem of an insight is a hard truth proven by what has worked...and what hasn't worked.

What Could Work?

As far as I can tell, there are two things that crowdsourcing does correctly, which Wil Merritt, CEO of Zooppa describes on slide 30:

  1. High levels of consumer brand engagement
  2. Insights that brand communications generate

Well, that's true if everyone keeps participating. Sweepstakes have a long history of success, but those usually require 10 seconds of thought - not the hours required for most advertising/marketing efforts. For every winner, you produce thousands of losers who just wasted their time. Not exactly inspiring.

(These two benefits are likely preaching to the choir and the insights are from a small vocal minority, but whatever...)

But OK, let's assume these are true. I will give you those two points. Now let's look at what crowdsourcing doesn't do.

What Definitely DOESN'T Work

It may have been said before, but let's review what crowdsourcing definitely can't do for you:

  • Brand strategy - The insight and planning that lead to long-term success.
  • Integrated campaigns - Want your campaign to work across print, TV, and web?
  • Production - For all the hype about things being easier to produce these days (and they are), can your crowdsourced winner write, design, and use motion tools? Doubtful.
  • Measurement - Who is pulling your data and analyzing it? Not the crowd.

These are just a few..."pain points." But it's a tough reality for the most optimistic of a very idealistic people. Idealistic to a fault, in my opinion. Take this quote from Zooppas' Merritt again:

"Today CMOs like to claim that the true owners of their brands are customers [True]. If they truly believe this what could be better than to allow customers to create their own messaging about the brands they own and love, and to enable them to share enthusiastically these messages with their friends and family."

OK, there are two things here.

For one, no one's trying to stop anyone from sharing messages. In fact, social media strategy is all about getting others to share your message. That's not revolutionary.

Secondly, what kind of logic is this? I believe my teeth to be my own; that doesn't mean I should give myself a root canal! I'll leave that to the experts.

WHY Won't This Work

Should agencies be concerned the crowd will steal their jobs? In short: no.

  • The Work (Usually) Sucks: Rick is totally correct when he says, "I don't think crowdsourcing creative content is going to raise the value, and therefore fees, of creative work." Doritos might get lucky once, but after that commercial airs, so what?
  • The "Pay" Sucks: John Winsor, CEO Victors & Spoils, had this to say about a crowdsourcing price model: "Get more, pay less" (slide 6). That's more of your work, while paying less money to you. Sound awesome, right?
  • The "Side Pay" Sucks: Rick points out that this is more of a zero-sum game - like Highlander, there can be only one (winner). It's not like the World Series of Poker where pros eliminated early could make money off other marks.
  • The Lack of Perspective Sucks: Evan Fry, also of Victors & Spoils, tells the story of Steve Jobs' horrendous iMac name which a long-term agency partner was able to dissuade him from using (slide 20). You don't get that brand strategy perspective from the crowd.
  • The Brand Guidance Sucks: Spike Jones speaks some truth (slide 24):

"So you REALLY want to base your entire brand...on creative that is pinned to a two-sentence description of what you're looking for? By a bunch of people that want to make a quick buck?...Now do you really think that you are going to get anything of value?"

Means, Not Ends

All due respect to Rick, but I think he buries the lead in this ebook (as have I...duly noted). The real key insight here - and I haven't heard this from others - is that crowdsourcing is a tactic, but not a viable business model.

Rick states it succinctly (slide 44): "But I fear that many brands are using crowdsourcing not as a means, but as the ends."

That's the key idea. Sure, get the crowd involved; solicit their opinions. That will provide the engagement and insight.

But handing over the keys to your brand and letting the crowd control it? No way.

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Super Bowl 2009 Ads - Social Media Engagement In The First Half

family-watching-television

$3M for a 30-second ad?

Sure it's crazy, but unlike in years past, advertisers have the opportunity to make that $3M work for them long after Super Bowl memories have faded.

First, there's the initial press. TNS Media reports that Super Bowl advertising has huge holding power. Data shows that people do wait to see the commercials all the way through the game. Then for a few days after, you get tons of online conversation swirling around your brand. (TNS was also able to rank the total media coverage last year - it will be interesting to see if these 10 brands lead the pack in terms of social media integration this year.)

But, for all its holding power, the Super Bowl is over within a few hours. How do advertisers get their money's worth? How do consumers create dialogue with select brands?

Getting The Most For $3M

Of course, the real way to really get the most for that $3M is to engage your customer. I mentioned previously some of the ways to engage your audience online and I've been tracking these attributes during the game. Here is what I have been watching for:

  • Pre-game engagement: Could customers submit their own ads in hopes of having it shown? Was there any aspect of user-generated content (UGC)? Did the brand allow customers to vote on which ad was shown?
  • During-game engagement: Was a URL displayed during the ad to drive traffic and attention to the brand? Where there opportunities for real-time interaction? Were customers encouraged to vote or otherwise voice their opinion?
  • Post-game engagement: Were there opportunities to engage the audience after the game? Could customers join a social network? Could they sign up for a newsletter featuring advance product information?

The Run-Down

Here's my list for the first half of Super Bowl 2009:

Second Quarter:

  • Land of The Lost (Movie Trailer): URL (LandOfTheLost.net)
  • Doritos (Power of crunch): UGC (Crash the Super Bowl)
  • GoDaddy (Danica): URL, commercial continued online (GoDaddy.com)
  • Pepsi Max ("I'm good"): URL (RefreshEverything.com)
  • Pedigree (Get a dog): No engagement
  • Budweiser (Horse brings branch): No engagement
  • Budweiser (Horse love) - 60 secs.: No engagement
  • Star Trek (Movie trailer): URL (StarTrekMovie.com)
  • Gatorade (Mission G): URL (MissionG.com)
  • Cars.com (Confidence): No engagement in commercial, but ad protagonist does have Facebook page
  • Hyundai Genesis (Yelling):
  • eTrade (Babies): URL (eTrade.com)
  • [Good call-out to NBC.com and Hulu]
  • Pixar (Up): URL, Verbal ask to go to Disney.com
  • Bud Light (Chalkoard): No engagement
  • H&R Block (Death): URL (HRBlock.com)
  • Teleflora (Talking flowers): URL (Teleflora.com)
  • Cheetos (Pigeons): URL with prominent written call-out (Cheetos.com)
  • Monsters Vs. Aliens (Movie trailer): URL (MonstersVsAliens.com)
  • Sobe (3-D dancing lizards): No URL, but bought Google ads against Monster vs. Aliens and sending traffic to branded Sobe YouTube channel (hat-tip @Scorecard)

Did I miss anything? Feel free to leave comments below if I left anything out or misreported on an ad. If you'd like to follow along in real time, you can find me at @MarketerBlog. I will post the second half's analysis directly after the game.

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