We see a shift in the way agencies are thinking about crowdsourcing and user-generated advertising – less of a threat or cannibalization to their business model and more of

1) A way to quickly and efficiently offer a solution to client's demand for new creative and media opportunities

2) A way to gain insights quickly and in a way that itself produces valuable content and word-of-mouth

The spec work debate is something that comes up a lot as well in our business – being a part of the "crowd" is certainly not for everyone, but for some of our members, its opened doors that may never have opened otherwise, and even for those that don't win on a regular basis – provides an outlet for their creative energy and a way to improve their art while connecting and collaborating with other like-minded individuals.

Great point about Apple's App Store is not crowdsourcing!

As Mark Twain said "Figures don't lie, but liars figure".

Mark Gallagher
Brand Expressionist®

My point is that brands must always be flexible and adaptable and willing to change to meet consumer needs. But, cuing in on those needs and adapting as needed is not crowdsourcing. Doing market research to determine if your track shoes are comfortable or if your energy drink is too sweet is not crowdsourcing.

Crowdsourcing is sending out an open call to design the new package or ad for that energy drink. Crowdsourcing is asking lay people to do work that would otherwise be executed by trained, skilled practitioners who know how to do it right. Brands can call this "consumer engagement" if it lets them sleep better at night, but it's just a gimmick that usually renders inferior results and actually dilutes the brand. Any "consumer engagement" benefits that come from it are minimal and generally fade quickly.

Apple's App Store is not crowdsourcing. The App Store allows developers to make a profit from the sale of their applications. Apple highly regulates the apps that it makes available through the App Store. And, in the end, Apple is no longer a computer company. They are a technology company that provides tools for creating and sharing content. In that sense, opening their platforms to opensource app developers makes sense.

Conversely…

Usually, the crowdsource task is couched in the language of a contest, where their is sometimes a modest monetary prize. More often than not, though, all the "winner" gets is bragging rights for dreaming up the selected idea. Anyone else who submitted a concept typically hands over their intellectual property rights to it.

In the end, the entity that called for the crowdsourcing gets amateur input, but tons of free ideas and concepts from which to build. Author Tim Ferris recently crowdsourced the cover of his forthcoming book (http://www.fourhourworkweek.com/blog/2009/04/04/d... The designer of the selected cover received $200, a small print mention on the verso, and the aforementioned bragging rights. The "rules" to this "contest" specified that all entries became the property of Mr. Ferris' publisher, who could do with them what they wished.

Book designers charge thousands for a well-designed cover. Mr. Ferris and his publisher, in keeping with Mr. Ferris' business philosophy of conning other people to do your work for you, used a crowdsource gimmick, disguised as a "design contest" to extract intellectual property from thousands for virtually no cost. The whole thing was, in my opinion, unethical.

Crowdsourcing rewards mediocrity and devalues talent and intellectual property.

Agreed! The "agency way" is being challenged and rightfully so. Traditional advertising no longer provides the impact to justify the investment. Is crowdsourcing the answer?

Research must involve the audience. But, should they be expected or encouraged to provide the solutions. Crowdsourcing is akin to working on spec. While we understand that this is common practice amongst advertising agencies, it's considered unethical among branding agencies for one simple reason: Companies who participate in 'spec work' are presenting solutions to problems they don't fully understand.

For advertising agencies, crowdsourcing aims to breath new life into a dying business model. However, this masks the symptoms. It doesn't cure the disease.

Mark Gallagher
Brand Expressionist®

I don't know if you would include this as crowdsourcing but we have a Tourism client who was spending a lot on global advertising and, hold onto something solid as I tell you this, was not happy with the results.

So we went to a number of markets, one of which was Germany which I will use as an example. The client had spent in the region of US$20 million on a global buy with CNN that included the German market, a source of very profitable visitors for the destination. But the number of arrivals from Germany was actually decreasing. When we spoke to consumers and the trade in Germany, via qualitative and quantitative methods, we discovered that very few of them were watching CNN because they sourced their information from terrestrial TV, especially news.

Of the many recommendations we made to the client, the first one was to stop TV advertising altogether in Germany (for this and other reasons).

Other research, sorry crowdsourcing in other countries allowed us to identify specific influencers for those markets and more.

All of the data sourced from our collaborations with consumers allowed us to identify a number of critical strategic factors, one of which was (Mark, you knew this was coming!) that one-size-fits-all mass market advertising is ineffective, certainly in this instance.

We've since used the same model with a number of offerings and they all pretty much deliver the same verdict.

But one point you make is how sustainable is this approach? Of course I don't have the answer but I do think that outcomes will be that brands will have a shorter shelf life and will require constant innovation and investment, not in advertising or other communications, but in their evolution.

I also think that retention will play a key role in the success of brands. The question is, will advertising agencies and CEOs accept this? It will be interesting to see how it pans out.