The Rise of Crowdsourcing 2.0: Benefits for brands and ad agencies
In the era of seismic change now occurring on Madison Avenue, ad agencies are starting to strap on an extra seat belt. There is a lot of talk about revamping traditional ad agency models, e.g., digital, hybrid, tradigital or simply, creation of the “new agency”. Traditional agencies are pushed to their limits by the explosion of digital and social media marketing projects as clients demand more. Agency compensation models fortified with high overhead are under pressure since it isn’t easy for a large agency to monetize the creation of a Twitter background page or Facebook fan page. This leads us to the need for a compensation model that reflects activity-based pricing delivered more efficiently. For new ad agency start-ups, the answer may be what we call the “5th Model”. This is another step in the long evolution of ad agencies adapting to changing market conditions for well over 100 years.
The “5th Model” Recognizes the Value of Social Media Marketing
Marketers can connect with customers using social media more efficiently vs. outbound marketing tactics. For example, downloading a digital coupon for a free taco may not only cure one’s short term hunger but, for the marketer, it is a viable reward for loyal customers and drives traffic at a price far less than traditional ads. Even when the value of the free taco fades, a smart marketer now understands the importance of engaging customers. Armed with a social media strategy, many brands now understand the drill: listen, engage, feedback, analysis = win.
What is Crowdsourcing 2.0?
Enter a relatively new concept that will make The Fifth Model a reality. It is appropriate to use Wikipedia to define the term Crowdsourcing, since thousands of Wikipedia users created the tool which many say is accurate as any encyclopedia in existence. Crowdsourcing is “the act of outsourcing tasks, traditionally performed by an employee or contractor, to an undefined, large group of people or community (a “crowd”), through an open call.” Jeff Howe, one of the first authors to employ the term, makes an important distinction, adding: “ … it [crowdsourcing] gathers those who are most fit to perform tasks, solve complex problems and contribute with the most relevant and fresh ideas.” Make no mistake; this process is having a profound impact on ad agencies, marketers, and brand management.
There is a decided shift toward finding “those who are most fit” while working to achieve “quality” results:
this is Crowdsourcing 2.0.
A critical tool to help guide the crowd’s creative development is the creative brief. In a recent blog, “Innovation Gone Wild on Madison Avenue”, Blue Focus Marketing co-founder Cheryl Burgess (@ckburgess) said: “the creative brief is the engine that drives development of the creative product. Without a focused creative brief, creative efforts would be off-strategy.”
Perspectives on Crowdsourcing from Several Industry Executives
Epirot Ludvik Nekaj, Founder, Ludvik + Partners (U.S.) (“Creativity Starts with Listening”) “Crowdsourcing permits our agency to better understand the landscape of social media, new technologies/platforms, and how to quickly and effectively generate relevant content and fresh ideas to energize our clients’ brands.”
Philip Letts, CEO, the blur Group (U.K) It’s important to realize that Crowdsourcing is a technique. Used correctly, it is a very valuable technique which can give a different perspective on many issues which will enrich an offering. But as a technique, it needs proper management and implementation and consideration as to how the results will be used.”
Simon Mainwaring, Author of We First, and Founder of We First, brand consulting firm (U.S.) “Crowdsourcing works because consumers are sincerely interested in the creative advantages and potential of collaborating with the brands they admire.”
Peter H. LaMotte, President, GeniusRocket (U.S.) “The first generation of crowdsourcing was focused too much on the size of the crowd. Platforms were more concerned about “whose is bigger” more than “whose is smarter.” This second generation of crowdsourcing is focusing on quality, the quality of the crowd and the quality of content they produce.” John Andrews, Founder & CEO, Collective Bias (U.S.) “Crowdsourcing is adding the voice of the consumer to the brand management process.”
The 5th Model – An “Open Call” for Greater Efficiencies
The four primary compensation models in play today don’t mesh with client’ demands for increased digital and social media marketing projects:
1) Media Commission 2) Billable Hours 3) Flat Rate/Fixed Retainer 4) Performance-Based. Enter an emerging model: The Fifth Model permits marketers (and ad agencies) to gain access to qualified creative professionals around the world. These pros are not part of agency overhead; do not require health benefits nor an office. It is the availability of quality; creative talent pools that Blue Focus Marketing believes will fuel the growth of the Fifth Model – “Crowdsourcing”.
So, to Madison Avenue, it is time to embrace the possibilities including far greater use of crowdsourcing to handle both existing clients and new business prospects. For new agencies, it’s a brand new world where greater efficiencies can be built into the process upfront. To marketers, this is a pretty exciting time to join the “open call” and realize not only efficiencies but exposure to a larger pool of fresh ideas.
A final thought …..as proof of our endorsement of the power of “quality” crowdsourcing, on June 16, 2011, Blue Focus Marketing announced that we are the first U.S.-based Affiliate for the blur Group’s Creative Services Exchange.
Brands & Ad Agencies: Join the 2.0 crowd at Blue Focus Marketing. Submit your brief….click here.
This is a re-post from The Social CMO Blog (@TheSocialCMO)
We hope you enjoyed Part 1: The Fifth Model “Crowdsourcing” Hits Madison Ave + Crowdsourcing Infographic. See Part 2 Crowdsourcing: Intersection of Madison Ave and The 5th Model
Suggested hashtags: #5thModel #crowdsourcing #canneslions #DO100 #CMO #advertising #brands #Nifty50 #MarketerMonday #usguys
Loved your explanation of the “Fifth Model.” It’s a fascinating business we’re in. Thanks so much for mentioning us, linking us, and quoting Peter, we appreciate it! We’re in good company.
All the best,
Director of Marketing, GeniusRocket
You are welcome! Crowdsourcing is a fascinating business. I think the opportunity for marketers and ad agencies to leverage this technique is enormous. Imagine being able to leverage the creativity of thousands of “creative” individuals to work on a particular campaign or project — absolutely mind-boggling.
Very interesting post on why agencies need to embrace crowdsourcing, a seeming enemy of the agency model!
I appreciate your comments which point to the heart of the confusion. Most agencies do see crowdsourcing as a threat. Yet, the opportunity to leverage talents of literally thousands of qualified creatives to benefit clients or new business prospects — is enormous. This benefit can be realized by small, medium or large agencies.
I like the visuals on your site. They explain crowdsourcing and social media quite effectively. I hope to see you and Cheryl again soon.
Thanks for your comments on the crowdsourcing visuals. It’s amazing how pictures help tell the story! It was great meeting you in New York. Hope everything is going well.
Lets be honest. Crowdsourcing is just a fancy name for a “Suggestion Box”, but it’s happens to be internet-based.
Technology has added quite a bit to the process to solicit, capture, collaborate and reward those who generate ideas. Indeed, the simple suggestion box has come a long way when organizations can claim thousands of qualified creatives who can work on a brief.