Crowdsourcing in the World of Marketing

Posted by jartese on Oct 17, 2013 3:36:09 PM

One of the most innovative ways to market new ideas is crowdsourcing, which is the art of bringing project contributors and investors together through one platform. The idea has been used by federal and state governments as well as commercial and nonprofit entities to help provide low cost problem-solving. Crowdsourcing can be very helpful to individuals with common goals but lack resources.

Birth of the Crowdsourcing Revolution

The term was coined by editors Jeff Howe and Mark Robinson at Wired Magazine in 2005. In a June 2006 Wired article called "The Rise of Crowdsourcing," Howe defined the term as outsourcing activity to a general large crowd. It was conceived as an online problem-solving model, but the definition has widened since then to include offline activity. The concept gained wider popularity with the 2009 launch of Kickstarter, a platform for crowdfunding, which is a subset of crowdsourcing.

Successful Campaigns

In India Ford Motor Company used social media to market its EcoSport car with an "Urban Discoveries" contest. Leading up to the launch, Ford India asked people to post a "cool place" in their city on the contest website, which attracted over 8,000 responses. Contestants promoted their posts through social media and the most popular posts were selected for the next round. Ford India narrowed the finalists down to 31 teams who were allowed to test drive the EcoSport while exploring urban India on video to be played on national television. A panel of judges then chose the best urban exploration video and awarded the team the grand prize of a new EcoSport.

Starbucks launched a crowdsourcing campaign more as a suggestion box than a contest called "My Starbucks Idea" for customers to suggest product ideas on their website. Even though the event offered no prize, in 2013 after five years it attracted over 150,000 ideas. Fans were also allowed to vote on the best ideas, which added up to over 2 million votes. Some of these ideas that transformed into reality include digital rewards using Starbucks Cards and being able to use free Wi-Fi at Starbucks stores. They've also used customer suggestions to add new coffee flavors and menu items such as skinny beverages and cake pop treats. The campaign has divided suggestions into product ideas, experience ideas and involvement ideas.

Tesla Motors has used crowdsourcing in yet another creative way that is neither a contest nor a suggestion box. They took orders with reservation fees of $5000 from buyers at zero percent interest. Since the electric car company mainly sells its Model S to early adopters, investors and shareholders, the deal worked with more affluent people who saved money on interest rates that would have equated to 10 to 15 percent. Tesla was able to raise over $130 million from this innovative campaign.

Crowdsourcing Tips

IndieGoGo is a San Francisco crowdfunding site that has partnered with President Obama's project to raise funds for entrepreneurs called Startup America. Some of IndieGoGo's fundraising tips beyond starting with a worthy cause and offering incentives include:

- Choose a relevant URL and write a solid pitch

- Include an image or video that can be shared online

- Run a campaign for a few months and set a reachable goal

Toward More Innovation

The idea of crowdsourcing has merged with other ideas to create new dimensions for the business world. A hybrid that involves outsourcing temporary online staffing for software testing has been accomplished by uTest, which parallels the model of Amazon's Mechanical Turk, except with a skilled instead of general labor pool. The company provides a global pool of over 30,000 tech temps who test web applications for Google, Microsoft and Intuit.

Many big companies are increasingly allowing the voice of their customers to participate in shaping their brand. Some companies are using social media as a tool for co-creation and to acquire ideas for product improvement. Social media has become an extension to corporate brainstorming and will likely play an important role in the future for narrowing down marketing strategies and reaching target customers more cost effectively. The reason crowdsourcing increases efficiency is because it draws ideas from the crowd that reflect existing demand instead of trying to market untested ideas meant to create demand.

Topics: Innovation Insights

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