Occasionally a topic comes up that inspires a longer post with commentary and viewpoints beyond my own. With so much talk recently about crowdsourcing it seemed like a good time to really tackle the issue. I’m positively thrilled to have input from some of the top minds in advertising and marketing communications contribute to this post. I want to thank Johnny Vulkan, Cliff Lewis, Evan Fry & Aaron Bateman who provided thoughtful commentary to this post as well as those who I have linked to for adding their insight to the discussion. I encourage you to print it out, bookmark, and of course share it with others.

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A BRIEF HISTORY OF CROWDSOURCING

It's all his fault

If it seems like you’ve been hearing a lot about crowdsourcing lately, it’s because you have.  Crowdsourcing is one of those buzz words, like synergy or viral that people are throwing around now to cover just about anything.  According to Wikipedia, the term was coined in a June 2006 Wired magazine article by Jeff Howe.

My first experience with the concept came when I participated in The Beast, the Alternate Reality Game tied to the Steven Spielberg movie, A.I., back in 2001. As a member of the 6,000+ strong  Cloudmakers group, I joined fans from across the world to solve puzzles and interact within this fantastic fictional world. We worked together to create a ‘collective detective’ that competed against the puzzle makers, not against each other, and it was brilliant.

And now crowdsourcing is very much in vogue. Howe took the concept and ran with it, turning it into a book, as did James Surowiecki with his tome, The Wisdom of Crowds.

THE CREATIVE INDUSTRY EMBRACES CROWDSOURCING

Crowdsourcing is gaining steam within the advertising agency community at the same time as another issue becomes more pressing - the broken agency business model. Shops big and small, from a variety of industries (ad, PR, digital) are all looking to do things differently. Earlier this year Agency Nil took a bold stand with their “Will work for all it’s worth” manifesto. That was followed by the recent launch of Victors & Spoils, which somewhat boldly bills itself as The world’s first creative (ad) agency built on crowdsourcing principles.

PSFK has more on Agency Nil here, and George  Parker sounds off on Victors & Spoils via PSFK here. Other great takes include Amadeo Plaza of Crayon on V&S and Contagious takes a look at V&S here. BBH Labs on Agency Nil here and here. You can read my interview with Alex Bogusky of CP+B and Hank Leber, founder of Agency Nil, here regarding agency business models. The Proffesional Artists League is taking a pretty strong stand against Work-for-Hire which can be interpreted as crowdsourcing. Take a look at their POV here.

AdAge is currently running a poll (through Nov. 6) asking if crowdsourcing is a threat to agencies.

BRANDS JOIN IN ON THE ACTION

I’m excited to see really smart people like the ones at AN and V&S make bold moves like this. Creative industries need this sort of thinking to keep them from stagnating. But here’s where it gets interesting. If you’re going to crowdsource, why does the client even need a middle man like V&S? Mountain Dew seems to have asked that question and come up with the answer: They don’t.

As part of their Dewmocracy campaign, the fizzy beverage is crowdsourcing their new TV ad. From the website:

Mountain Dew asked their biggest fans to band together and create the next DEW, from the flavors to the TV ads. Now’s your chance to get involved.

1) Create A DEW Spot
Direct, shoot and edit a 12-second DEW spot that shows off your skills.

2) Upload it
Your 12-second video must be submitted here by 11.30.09

3) Cross Your Fingers
Approved videos will be added to the gallery to be voted on by DEW fans. When voting closes, the six leading submissions will be revealed. In the end, three finalists will be selected to receive funding for a :15 TV DEW spot.

Once again the indespensible PSFK has more here. From the PSFK piece:

The brand insists this initiative will not impact its relationship with agency of record BBDO Worldwide, who has been involved with Dewmocracy from the start and will continue to play an important role in the process.

I don’t think this is a threat to BBDO, but is it a threat to V&S?

Apparently this whole crowdsource thing is a big hit with the junk food crowd as Snickers is in on the action as well. [Disclosure, my agency, Taylor, does some work with Mars, but is not involved with this project]. Another crowdsource effort comes from Genesis Today, who will award $10,000 for a good Social Media idea.

After the jump, insight from principals at Agency Nil, Victors & Spoils and Anomaly as well as agency biz model gadfly Agency Future.

INSIGHT FROM INDUSTRY LEADERS

Here’s what Cliff Lewis, Executive Producer and Creative Resource Director at Agency Nil, had to say about crowdsourcing:

“Crowdsourcing” is the new creative mantra, the “curator” the new CD. The

The Agency Nil mantra

perception is that the crowd will give you the answer at a fraction of the cost. That may well turn out to be the case – occasionally and for the right task. I don’t believe the crowd will always get it right but I do think the crowd has an important role when used correctly. It forces agencies into a new era of real collaboration and to re-evaluate their process and their value.

Established agencies have to come to terms with giving up some territory and realise that actually, the crowd is an extremely attractive resource.

Shops like AgencyNil are well positioned with fluidity and access to quality talent. With clients attracted to their low overhead value proposition, they may find themselves affordable brand “curators”.

Agency Nil is looking to utilize crowdsourcing themselves with a call to action for an agency manifesto video.

 Evan Fry, CCO of Victors & Spoils, shared his thoughts as well:

 Question: How does crowdsourcing directly by brands affect established agencies, and how does it affect shops like V&S?

 Evan Fry: A brand going straight to the crowd with a given marketing assignment is exciting for everyone. It’s exciting for established ad shops because it’s interesting and fascinating to see what the community is going to come up with. Ideally it’s not a threat to established shops because they realize that their strengths lie in strategy and wholistic brand handling and product solutions, the whole thing.

But if what the crowd is coming up with is satisfying for the brand and it’s costing less, then it could probably be stressful for established agencies if a given brand decides to crowdsource everything and pull an account. As far as V&S is concerned, brands going straight to the crowd fascinates us too. If they do it to a point where they feel 100% satisfied with their crowd’s output, they wouldn’t need us just like they wouldn’t need an established shop.

Because we too have strengths in strategy and complete brand/company guidance. But for us right now it’s testament to just how compelling it is. The more brands that do it, the more we think crowdsourcing’s current pluses and minuses will be exposed. We believe we can minimize the minuses while plusing the pluses.

Eyecube: What role can a shop like V&S play in collaborating with consumers on behalf of brands?

EF: We offer the role of feeling just like a regular ad agency for their relationship and points of contact. We feel like an ad agency. But we work with the crowd, guide the crowd, keep them on strategy and on brand for the client. And deliver to the client a shaped crowd solution. So we play the role of the familiar trusted agency partner for the brand. While using the power of the people and the magic that can bring to deliver the most relevant solutions where their customer base and culture at large feels ownership and love because they helped make it.

Eyecube: Does crowdsourcing directly with the public work better for some aspects rather than others? For instance, are you more likely to get better copy or art from consumers?

EF: I think it’s too early to tell. And as we adapt and evolve the early interpretations of how crowdsourcing currently works we can build in ways for anything to work really smoothly. Right now, the existing models seem to work best when you carve up tasks so that they are fairly straightforward. Those kinds of things can work pretty well. If it gets to multiple levels with a complex task, you have to have someone with the vision for the project and the brand wrangling it all and making sure each piece fits seamlessly.

So right now, things like logos work pretty well. Or really pointed tasks such as name a car color or code a simple website can work great. Putting together an entire product launch or something like a pitch or helping a company “get into social media” requires shaping and direction. But we’re figuring this all out as we go just like everybody else. We hope to help it all evolve and help the whole thing be better understood, better used and better leveraged.

New Biz Model Vets

Johnny Vulkan of groundbreaking agency Anomaly  is no stranger to unique business models. Here he shares his thoughts on crowdsourcing as an agency model:

I think it’s an exciting experiment and the calibre of the people involved is great so I expect good things. As a company who launched with a desire to test new ways of working, creating and making a business from that I obviously instinctively commend any group of people who do the same.

[Eyecube: Can crowdsourcing work as a business model?]…the very honest answer is I don’t know. I think crowd-sourcing as a behavior is a wonderful by-product of what technology has enabled us to do. As a continuous feedback loop ‘the crowd’ provides insight, data, and a vocal audience for any company to be accountable to. It’s raising the bar on everything and that’s a good thing. Smart businesses and their brands are already harnessing that by conversing in an open way, modifying their take on customer service and feeding that back into the products and services they make. There have also been examples where crowd-sourcing has been used to create communications back to the crowd – Doritos being the most written about. 

I don’t think it works for everything though and curation, editing and definitive personal opinion are vital. I think the recent ‘elect the jury’ concept is a case in point. Jimmy Wales and Clay Shirkey were languishing in the lower leagues while the top few names on the list were Global Creative Directors of large networks the last time I checked. Is this the wisdom of crowds or a response to company all staff email that creates that effect? Things get gamed and in the process some bits of genius may get overlooked. The future of the communications industry may be a more interesting one if people like Jimmy and Clay got to voice their opinions in that forum but that will take an individual decision to elevate them if they are unwilling to use the front page of Wikipedia or the NYU database to help them.

There have been experiments with co-written books, co-written films and co-written experiences that have sourced widely but they are yet to beat the creative vision of ‘Blade Runner’, ‘Shawshank Redemption’ or even ‘CSI’. We will see something soon I’m sure but it will be a rarity rather than a normality.

I realize this isn’t the ‘crowd sourced’ agency model but I think it is a watch out. Volume doesn’t always equate to quality and you are frequently faced with the overwhelming paradox of choice. There are also legal mine fields to navigate. For example at Chiat if someone sent in an Absolut ad idea it was immediately returned as if a concept ran that was similar there was a chance of legal action. You can say that is not ‘open’ and short sighted – but while the communications industry has embraced open source the legal industry is still a little way further behind.

It’s also hard to do with clients who require NDAs. We have several in place covering everything from new beverages to new technology… we can’t even tell everyone in our own office, let alone take the conversation broader.

But, it is going to be right for some people and for some occasions and if there are enough of them it is going to be a great business. We’ll use it, as will others, but it won’t become a default option. The future is not about absolutes. There are going to be many models, many paths and many businesses. There is no one size fits all but I do think the latest ventures are fascinating ones and they have the talent and will to succeed so I suspect they will.

The CEO of Agency Nil, sees things through the lens of his time at P&G:

People seem to be wowed about what Mountain Dew are doing….but isn’t this process what marketers have always done?

Consider this….P&G poll consumers in huge numbers, have focus groups, have fictitious products in baskets of goods, show different ads to would be consumers, use data in multiple ways in an effort to get into the purchasing intent and likely demand of would be consumers…and to create the best product, packaging, commercials, smells, flavors…you name it….they plug into consumers throughout the process….it starts at the concept stage and rolls all the way through from packaging to consumption….they have ALWAYS done this….

What is Mountain Dew doing that it hasn’t done before? There seem to be three key differences – 1) they are using more consumers than usual while calling it ‘crowd sourcing’ instead of marketing….2) they are making the process public….and 3) they are paying an agency to produce the creative for the crowd sourcing Dewmocracy angle instead of the creative work for the new product itself….is there a difference?

Aaron Bateman runs the Agency Future blog and works for Advance. He’s a student of agency business models and is an astute observer of the changes taking place in the industry. Here’s what he had to say regarding crowdsourcing and agency models:

Eyecube: Should we judge V&S and Agency Nil based on their success, or should we simply applaud them for having the courage to try something new?

Aaron Bateman: Both, I say. It takes guts to do what they’re doing. Not to mention complete conviction. But the litmus test is if they’re still around in a year, two years etc. My personal feeling is that they are agencies for the here and now. I have reservations about the longevity of the model, but if they get the business basics right they’ll probably be able to stick around.

Ultimately the best agencies – the ones that endure societal and economic fluctuations – are those that can adapt to their environment (to paraphrase someone a lot smarter than me). The closing of Cliff Freeman perhaps demonstrates what happens to agencies that capture the zeitgeist but then maybe don’t evolve.

 Eyecube: What’s the one problem with crowdsourcing that people aren’t addressing?

AB: I have a very personal opinion on this that is at odds with most of the people I’ve talked to about the subject. Essentially, I wonder where genuine visionaries fit in in a crowdsourced future. I think there’s a danger that an over-reliance on the crowd can be detrimental to the careers of genuinely truly creative souls.

When faced with thirty creative solutions that riff around the same idea, how many ad buyers would be brave enough to pick the one that’s completely off the wall? I guess I’m saying there’s a risk of some kind of collective groupthink that marginalises the real talent.

Eyecube: What do you think about Mtn Dew and Snickers going straight to consumers to crowdsource commercials, skipping agencies altogether?

AB: A great way of generating one-off ads/campaigns that cut through and generate buzz. My question is what happens next. Do brands crowdsource strategic partners too? I wonder if there’s a danger of a brand losing a sense of direction in some kind of constant quest to be flavour of the month. Of course, the idea presents a challenge to agencies already under pressure to justify their fees. If it helps sort the wheat from the chaff, then great.

Here’s a great little piece over at Gizmodo which illustrates the benefits of a strong client-agency realtionship. Steve Jobs thought the name iMac was horrendous, and in fact had come up with his own idea for a name that apparently was so bad, the entire universe would have collapsed in on itself had it been used. But ultimately Jobs trusted TBWA/Chiat/Day and went with iMac. I just don’t think crowdsourcing is going to achieve that level of trust.

For my money, crowdsourcing is an exciting development, but as noted above by some of the contributors, it’s not a magic bullet. I think it can be used to engage consumers effectively and if costs are an issue it can help there. But I think it will be very difficult to crowdsource brilliance. And of course the flip side of that is that brilliance may be run over by the ‘wisdom’ of crowds as genius is rarely seen as such by the majority when they are first exposed to it.

Angency Nil Manifesto

Upheaval. Turmoil. Paradigm shifting. Big words to throw around, but if you work at a creative agency (advertising, PR, digital, etc.) you’ve probably read, or been thinking, this for the last year or so.  So many factors, from the economy to an ever-expanding supply of, well, supply – there are a lot of agencies out there, from multi-nationals to one-person operations – have altered the landscape. As a result, agencies of all shapes and sizes have been rethinking their business models. I’m sure old-timers out there will tell me it’s cyclical, and that every 10 years or so we go through this, only to return to the tried and true methods.

Perhaps, but now talent can come from anywhere in the world, not just Madison avenue. And a kid in Bakersfield, CA (or Lahore, India) has access to sophisticated tools that not that long ago were only affordable for huge agencies. Add in the DIY creative trend that has consumers making the commercials and you can see why agencies are taking another look at ideas that would have been laughed at over a three martini lunch by Roger Sterling and Don Draper.

The Young Turk

Recent VCU Brandcenter grad Hank Leber has created Agency Nil, a haven for out of work and freelance creatives. The hook: They’ll do the work, you pay them what you think it’s worth. That’s the sort of bold thinking you’d expect from a guy just starting out in the business. (By the way, one look at their website and you tell can Hank and his guys are the real deal). Hank is clearly a take no prisoners-type of guy. He’s put his stake in the ground with Agency Nil and he’s putting his mouth where his ‘pay me what it’s worth’ is:

On the other end of the spectrum is Crispin Porter + Bogusky, a well-established ad agency that has turned out some of the most talked about creative in recent years (I talked about it here, here and here). Recently CP+B had an intern auction on eBay, where brands could bid for the services of CP+B interns. Clever idea and it raised $17, 655 for the interns. So good at generating buzz for their clients, CP+B, did a bang up job for themselves on this one: AdFreak, UberFarm, SuperPunch, and Chris Rawlinson were just some of the blogs covering the story.  Here’s AdAge with a post-mortem on the event and the winner: Brammo.

Ultimately CP+B was having some fun (and earning some publicity) with the intern auction. Agency Nil jumped in to mix it up a bit and quite frankly, I hope they both turn out as winners in this (the interns too!). But the serious question of business models remains. I got in touch with Alex Bogusky of CP+B and he was kind enough to share some of his thoughts:

Eyecube: What if the winner of your auction is extremely satisfied with the results – Could that pose a threat to your traditional business model?

AB: Well first off let me comment on the traditional business model. First I don’t feel vested in it so any change that works better would be welcome. Second, the model that I believe is more broken is the corporate model and public ownership. That system has taken a hundred years to reach where we are now but it’s not a good place. The pressure of quarterly earnings combined with the limited liability constantly conspires and encourages short term and unsustainable behavior.

That issue is a lot bigger than the intern auction and as I think models for the future my head is more in that space. Now to answer your specific question I don’t think the intern auction could be a path to a better model. Unless the model was to have a steady stream of free/intern labor. I guess that’s possible but for a client looking for a long term partner that would be a frightening prospect. So from both the employee and client perspective I don’t think it’s a long term solution. The truth is there have been some agencies that have used pretty much all intern/free creative labor as a rule and it worked okay but they hid this reality from clients.

Eyecube: Could auction-based ad work be a viable biz model for an agency?

AB: I don’t think in the current environment it’s very realistic but certainly it works better for smaller clients than larger. Project based stuff can work this way. And right now the reality is all RFPs come down to a reverse auction. With the agencies all fighting to do it most affordably. Each intern will receive their share of the 17K. About 500 bucks before taxes for three months work. We’ll pay them more than they make from the auction. That doesn’t strike me as sustainable. This is about doing something special and fun for a great group of interns. I don’t think it’s more than that.

Eyecube: Does this risk commoditizing agency work?

AB: Probably. Sites like Crowdspring are probably the greatest risk. I’m curious to see how it pans out. People had the same fears with desktop publishing but they turned out to be unfounded. In the end the categories that become commodities do so because they in fact are a commodity. So we shall see. Is creativity a commodity?

Eyecube: If Agency Nil proves successful, could you see other agencies trying that model?

AB: Copying somebody else’s model is a lot easier than coming up with something new so I would say it will happen in a New York minute.

Hank and the Agency Nil gang, like all good Ad Men, know an opportunity when they see it. In response, they’ve launched CrispinvsAgencyNil, an open letter to the losing bidders in the CP+B intern auction. The offer? They’ll do the work for half of the $17,655, and they’ve offering this for two brands. So, Agency Nil sees CP+B’s clever and raises them one. Well played.

I hope my readers will continue this conversation here in the comments section. I’d like to say a big thank you to Alex, Hank and Ben who really made this post, your insight, time and contributions are very much appreciated.