Marketing has the goals of first satisfying customer needs and focusing on profitable sales volume (Winkler, 2009). Crowdsourcing is a relatively new phenomenon in the creative world and in the past, businesses have had internal design teams to create the concepts produced by that business and trying to reach both of those goals. Because the Internet has broken down many of the barriers previously held by professionals (Howe, The rise of crowdsourcing, 2006) and the exponential rise in technology, crowdsourcing has been defined as “the online distribution of certain tasks to crowds of experts and enthusiasts” (Schmitt, 2009) and “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.” (Howe, Goodbye to all that … and hello to all this!, 2009).

The Internet has made Crowdsourcing Viable

Crowdsourcing has replaced a number of those internal design teams with consumer created designs and products that businesses only then produce when enough orders have been placed, thereby greatly reducing the risk (Boutin, 2006).
Since the Internet is “likely to reinvent tried-and-true models” (Rappa, 2009) the purpose of this study is to expose this trend to businesses that are unaware of its impact so they may decide whether they must adapt to it or not. This is a review of 3 articles written on the subject of crowdsourcing and what they have discovered on the subject.

The first site under review is from Wired.com with an article entitled “The Rise of Crowdsourcing” (Howe, The rise of crowdsourcing, 2006). The article covers the subject of crowdsourcing from four different examples. It starts off with a story about the project director at the National Health Museum in Washington DC named Claudia Menashe. She needed some photos of sick people and several years earlier had run across a stock photo collection by a photographer named Mark Hamill out of Manhattan Beach California. There was some discussion about the price of the photos and since it was for a nonprofit organization he gave her a discount equal to about half what a corporate client would pay and thus a total sale of approximately $600. After several weeks the offer was refused because Claudia had found a company called iStockphoto, which sold photographs for approximately $1each.

The article goes into fairly detailed information regarding iStockphoto and how it shook up the stock photo industry. The main reasons given were the fact that digital cameras have greatly improved an average photographer’s ability to get a somewhat decent photograph, thereby opening the door to millions of would-be photographers. These photographers can easily contribute to iStockphoto’s archives because of the Internet and the fact that there was no loss in quality because of film production or scanning and that makes them very competitive in this creative industry. Combining a digital image with a program like Photoshop, which allows for infinite alteration, the article then claims that the day of the high-priced photographer is almost dead.

The last piece of the profitability equation in the photography world was a micro-payment system that allowed these new photographers to be able to receive a commission on every purchase. For example, instead of selling one photograph for $100 they would sell one photograph 100 times at a dollar each. The professional photographers have had to dramatically change their business model and even made statements such as “I just don’t see much of a future for professional stock photography.” (Howe, The rise of crowdsourcing, 2006, p. 1)

The next story called “The Packager” shows how viral videos have made a dramatic change in VH1, the music television station (Howe, The rise of crowdsourcing, 2006, p. 2). They created a program called “Web Junk 20” which featured the 20 most popular videos shown on the Internet in a particular week. This became a way for the station to provide entertaining programming at a substantially reduced rate and in the process, increased viewership because the people producing the videos are the ones watching the show. In other words the viewers create what is viewed. This user-generated content is then part of a large award ceremony each year to spur competition and increase viewership.

The third article on crowdsourcing is called “the Tinkerer” (Howe, The rise of crowdsourcing, 2006, p. 3). It talks about a company called InnoCentive which posts difficult scientific problems on their website and anyone in the network can take a shot at cracking them. Those on the network must be approved to provide information on such a subject and it is not open to everyone on the web. Those who do solve the problems are paid anywhere from $10,000 to $100,000 per solution and more than 30% of the problems have been solved this way. This proved to be a significant savings over in-house research firms and a greater increase in the number of problems solved. Other similar companies are using crowdsourcing networks that allow companies to find and hire retired scientists for one-off assignments. It also shows how using crowdsourcing has improved the profits of Proctor and Gamble and increased the number of new products it produces.

Crowdsourcing Effects All Businesses

The last of the four articles is called “The Masses” (Howe, The rise of crowdsourcing, 2006, p. 4). It shows that by using a web-based marketplace, companies can find people to perform tasks that computers are generally lousy at, like: identifying items in a photograph, skimming real estate documents to find identifying information, writing short descriptions, transcribing podcasts, etc. He gives a number of examples of companies who have used this technology such as Amazon.com, Alaska airlines, and one called iConclude outside of Seattle Washington. It shows how this last company reduced its expenses for a particular project from $2000 down to just $5 by using crowdsourcing.

The information presented by Wired.com seems to be very reliable and valid. There is no apparent ulterior motive in presenting the information even though there is no documentation as to the sources of the story unless it is the author himself. But there is one person who claims, “that Wired Magazine is a publication of general interest topics although its mission is not clearly stated. What is clear is that Wired Magazine is not a scientific or technical journal” (Lange, 2006). He goes on to say that, although he is writing about a completely different subject than discussed here, that of vehicle theft by circumventing the transponder systems, “Wired Magazine is not a publication bound by scientific foundation nor are the articles subject to traditional protocols of scientific scrutiny such as the “peer review” process” (Lange, 2006). In such a fashion almost all magazines fall into this category and should not be compared with the same level of value as a peer reviewed paper.

The next website under review is from BusinessWeek.com. The article is called “Outsourcing: Consumers as Creators” (Boutin, 2006). It describes a trend that allows customers to help design the products they buy but tells them not to expect to get paid a fortune for their brilliant idea. It goes into a detailed explanation about a company called “Threadless”, a Chicago-based T-shirt manufacturer whose design process consists entirely of an online contest. People from all over the country submit their designs to be voted on by the masses and the 4 to 6 highest-rated designs are then put into production, but only after enough customers have pre-ordered the design to ensure it won’t be a money loser. The winners receive $2000 in cash and prizes but the real motivation is just to see their work worn in public.

Threadless Shirt Designs

For customers it provides a wide range of choices and from the company’s point of view they don’t have to hire a design staff. They only produce shirts that are pre-ordered resulting in dramatic risk reduction. Another example they give is of a Japanese specialty retailer of custom furniture designs that follows a similar pattern. People submit their designs that are then voted on and analyzed by the viewers and goes into production only after they are ordered.

Business Week should be considered quite valid and reliable because of the fact that they have gone to the extent to put up a page of their code of ethics that every writer and journalist promises to follow which is part of the McGraw-Hill Companies code of ethics and The American Society of Magazine Editors (Business Week, 2005). References to their standards are listed on that site.

The next website under review is from Adage.com or Advertising Age. The title of the article is called “Can Creativity be Crowdsourced?” (Schmitt, 2009). This discusses crowdsourcing from an advertising point of view and shows that certain websites like OpenNet.net and Crowdspring.com offer advertising, marketing and design ideas via the crowdsourcing method where, in one example, a network of more than 11,500 creative people from more than 125 countries contributes their designs. A request for a simple logo generated over 1200 submissions.

Many other companies are also reviewed on this site such as those that do graphic bookmarking services; interfaith designers looking for inspiration to solve common design problems; those focused on sharing colors and pallets; etc.
But this article also goes into the discussion of companies fighting such activity. “For marketers, crowdsourcing creative services pose both great risk and rewards.” They even point out that there is even an online organization called “No!Spec” actively trying to educate designers on the perils of participating in these services.

As for the validity and reliability of Advertising Age it must be remembered that this is also a journalistic organization and well established for many years and not a fly-by-night company. Yes, they are writing about something that has had a dramatic effect on their industry but that will also be of value to those in that industry and help them to see what is happening.

In conclusion, the overall theme of each of these articles and stories is the same: outsourcing certain tasks to the crowds or masses reduces costs and increase creativity, thus it is called “crowdsourcing” and could be likened to the ultimate “design by committee”, a phrase usually associated with poor design and needless complexity (Wikipedia, 2009), yet in this case results in the best solution at the lowest cost. The main reason this phenomenon exists is because of the Internet.

It has been said that, “tools does not a designer make,” (Croft, 2007) but having the tool of a computer in the hands of millions of people opens the doors to all sorts of individuals to chime in, whether they have talent or not. But when an artistic person in a poor foreign country creates an acceptable design and only needs to make a few hundred dollars a month to survive, it logically makes it very difficult for someone who needs a few thousand dollars a month to compete.
While there is much resistance to the implementation of this trend, Eric Schmidt probably said it best: “the crowdsourcing of creativity is proving that a great idea can come from anyone, anywhere. The question then is not whether our industry needs to adjust, but how quickly.” (Schmitt, 2009)

References

• Boutin, P. (2006, July 13). Crowdsourcing: consumers as creators. Retrieved Oct 17, 2009, from Business Week: http://www.businessweek.com/innovate/content/jul2006/id20060713_755844.htm
• Business Week. (2005, Apr 20). The businessweek code of journalistic ethics. Retrieved Oct 23, 2009, from Business Week online: ethics statement: http://www.businessweek.com/ethics.htm
• Croft, J. (2007, Sep 30). Tools do not a designer make. Retrieved Oct 23, 2009, from Jeffcroft.com: http://jeffcroft.com/blog/2007/sep/30/tools-do-not-designer-make/
• Howe, J. (2009, Sep 1). Goodbye to all that … and hello to all this! Retrieved Oct 17, 2009, from Crowdsourcing: http://www.crowdsourcing.com/
• Howe, J. (2006, June). The rise of crowdsourcing. Retrieved Oct 17, 2009 from Wired: http://www.wired.com/wired/archive/14.06/crowds.html?pg=1&topic=crowds&topic_set=
• Lange, J. (2006, Oct). A review of wired magazine article “pinch my ride” by Brad Stone. Retrieved Oct 23, 2009, from Langetech.net: http://www.langetech.net/uploads/Response%20to%20Pinch%20My%20Ride%2010.03.06.pdf
• Rappa, M. (2009, Jun 1). Business models on the web. Retrieved Oct 17, 2009, from Digital Enterprise: http://digitalenterprise.org/models/models.html
• Schmitt, G. (2009, Apr 16). Can creativity be crowdsourced? Retrieved Oct 17, 2009, from Advertising Age: http://adage.com/digitalnext/article?article_id=136019
• Wikipedia. (2009, Sep 17). Design by committee. Retrieved Oct 24, 2009, from Design by committee, wikipedia, the free encyclopedia: http://en.wikipedia.org/wiki/Design_by_committee
• Winkler, R. (2009, Apr 2). Marketing basics. Retrieved Oct 17, 2009, from Reuters: http://www.reuters.com/article/SmallBusinessLaw/idUSTRE5314ME20090402?pageNumber=3

(This article was an assignment for the Masters Degree in Internet Marketing course at Full Sail University, Oct 2009)