Crowdsourcing in the Americas: Building better brands with Web 2.0

Corporations, non-profits and individual consumers are all exploring new strategies for leveraging the power of the online crowd.

Key trends

  • Rising unemployment and growing internet access create an army of eager recruits;
  • Taking testing to the next level;
  • Corporate giants put their ear to the ground;
  • Opening up new vistas for tourists;
  • Haitian and Chilean earthquakes emphasise humanitarian applications.

Commercial opportunities

The potential benefits of crowdsourcing for marketers include:

  • Conducting open-ended conversations with consumers in order to build better brands;
  • Building equity in brands by making consumers feel more personally connected to them;
  • Utilising open-source product design to harness the expertise of hundreds or even thousands of individuals for very little cost;
  • Subjecting consumer durables (mobile phones, kitchen appliances etc.) to much more widespread and vigorous pre-launch testing and refinement;
  • Leveraging consumer experience to building better package holidays and tours in the travel industry.

Background

The term ‘crowdsourcing’ has become popular as shorthand for the trend of leveraging the mass collaboration enabled by such Web 2.0 technologies as Twitter and Facebook to achieve business goals.

The open source software movement has long proved that a network of passionate and dedicated volunteers can write code just as well as highly paid developers at the likes of Microsoft or Sun Microsystems, while Wikipedia has demonstrated that the same principles can be utilised to create a comprehensive online encyclopaedia.

Crowdsourcing essentially involves the application of open source principles to other fields. It takes a job traditionally performed by a designated agent (usually an employee) and outsources it to an undefined, generally large group of people in the form of an open call.

Technological advances in everything from product design software to digital video cameras are eliminating the cost barriers that once separated amateurs from professionals in many industries. As a result, hobbyists, part-timers, dabblers and dilettantes of all stripes now have a market for their efforts, as savvy companies realise the benefits of tapping into the latent talent of the crowd. For example, the public may be invited to carry out a design task, refine an algorithm, or assist in the capture or analysis of large amounts of data.

The main benefits of crowdsourcing are additional brainpower (the more people working on and thinking about a project, the better the results are likely to be) and speed (when people know there are others working on the same project, there is more pressure to deliver results fast). More broadly, people know they are competing against others, so they know they have to deliver innovative ideas in order to make their work stand out.

While this labour is not always free, it costs significantly less than paying traditional employees. This is proving to be the source of considerable angst for designers and others whose business models are being disrupted by crowdsourcing: According to one US designer, “The problem is… crowdsourcing can lower your value and hourly rates so far that minimum wage looks like a fat paycheck.”

Rising unemployment and growing internet access create army of eager recruits

Rates of unemployment have risen throughout the Americas over the past couple of years, particularly in the USA and Mexico. As a result, a growing number of unemployed workers are looking for new ways to participate in the labour market.

As many are finding it increasingly difficult to find traditional paid work in their chosen field, they are turning to such crowdsourcing marketplaces such as InnoCentive, TopCoder, CrowdSpring and uTest. Moreover, with the number of internet users in the Americas now approaching half a billion, a huge number of individuals now have ready access to the nascent crowdsourcing marketplace.

Number of internet users in Latin America and North America: 2004-2009
Users (‘000)

Source: Euromonitor International from International Telecommunications Union/World Bank/Trade Sources.

As well as sharpening their creative skills and remaining involved with the things they love to do, crowdsourcing can help them to get noticed by potential employers. While these crowdsourcing marketplaces offer various forms of payment, traditional forms of compensation are splintering beyond money to include fame and community.

Taking testing to the next level

Massachusetts-based start-up uTest utilises a worldwide community of 23,000 testers (roughly a third of whom are located in North America) who are paid for finding defects in software. 23,000 individuals signed up to be part of a testing network. Their credentials as testers are not based on their professional experience, but by a rating system based in large part on customer feedback on the testers’ bug reports.

Customers with products to test come to the company, which designs a test plan for their product. They choose testers based on the technologies they have at their disposal, their geographic location (if relevant), and the ratings they have earned.

Reports are filtered by uTest to strip out bugs the company is not interested in, and the customer runs the test cycle for as long as it wants. For example, a review conducted by 600 software professionals from 20 countries found that Amazon.com’s website had less bugs and was more user friendly than rivals WalMart.com and Target.com. According to Matt Johnson of uTest, “It’s a form of test-on-demand.”

Corporate giants put their ears to the ground

Procter & Gamble, Starbucks, Dell, Best Buy, General Mills and Nike are among the major US corporations that have created digital platforms that enable customers to help them create and prioritise new products and messages. Starbucks employs almost fifty full-time moderators whose only job is to engage the online community. Within a year of the 2008 launch of its proprietary online forum, mystarbucksidea.com, Starbucks had received almost 15,000 coffee ideas.

Opening up new vistas for tourists

Crowding is not just for corporations, it can also be used by individuals. For example, someone planning a trip could attempt to crowdsource their itinerary instead of utilising such ‘traditional’ tools as Lonely Planet, Hotels.com etc.

According to one US blogger who tried this approach to taking a trip to San Francisco (and received well over a dozen recommendations within a week of his original post), “we could do this the traditional way and research the trip using… online resources. However, I’m not traditional. Never have been. So, I’d like to ask for your help in researching and planning my tenth wedding anniversary trip. After all, I trust you much more than… Lonely Planet.”

Haitian and Chilean earthquakes emphasise humanitarian applications

The devastation caused by the Haiti earthquake in January 2010 lead to one of the most innovative applications of crowdsourcing yet seen. Developed by students at Columbia University’s School of Public Administration, Ushahidi allows them to take information provided by text messages, email, and twitter and create a “crisis map” of where help is needed.

The Haiti Crowdsourcing project connected real time texts and phone calls from Haitians in need after the earthquake with a graphical overlay map of their precise location, enabling emergency personnel to improve their response times. Two months later, the project also helped to direct relief efforts in the wake of the Chilean earthquake.

Student organiser Jaclyn Carlsen says “It’s an incredible tool. Our whole goal is to match resources with needs and we do this almost in real time.”

According to Erik Hersman, one of the program’s original developers, “If Haiti, being the biggest example, shows us anything, it’s that crowd sourcing of crisis information is possible and there’s value in giving information from the ground up instead of just from the top down.”

Project volunteer Stephanie Ruiz says “It gives poor people who don’t have a voice, a voice. All they need is a mobile phone. I thought that was very powerful and I was very interested in being a part of that.”

Outlook

There are naturally limits to what crowdsourcing can achieve. The best design freelancers are unlikely to need to work “on spec,” even in the current economic environment, so they are unlikely to participate in crowdsourcing.

It is unlikely that crowdsourcing could ever produce work to match that of Jonathan Ive, the principal designer of such iconic Apple products as the MacBook, the iPod and the iPhone. Similarly, traditionalists maintain that the work of an Einstein or a Mozart could never be crowdsourced.

Moreover, most consumers are unlikely to invest a huge amount of time in a project where payment will be small or perhaps even non-existent. As a result, they are unlikely to devote a significant amount of time learning about a company’s products and their market.

Nonetheless, for many companies, the advantages of crowdsourcing far outweigh the disadvantages, at least for certain projects. There are also many talented designers who can leverage crowdsourcing that would never otherwise work for themselves because they lack marketing expertise i.e. the ability to “sell themselves.”

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