Is Crowdsourcing A New Name for An Old Approach?

Crowdsourcing is a term coined in 2006 by Wired magazine writer Jeff Howe to refer to a business model where content is created by a large number of users not formally affiliated with a company. Another explanation of the concept was summarized by Josh Catone where he describes crowdsourcing as an “application that uses that knowledge and talents of many to create content and solve problems.” Both authors cite examples of successful crowdsourcing tactics from Google, to ebay, and arguably Wikipedia. If I reach back to my days of studying sociology, someone may try to argue that using such an approach can run the risk of Group Think. But I think we’re talking apples and oranges in this case.

For IMC professionals, the concept of crowdsourcing is to use it as a marketing tool; both for gathering new ideas about product needs and leveraging awareness of products through these “crowds” that share a common interest and passion. And businesses seem to be taking a growing interest in the practice. As early as 2006, a Business Week article on the subject cited Getty Images’ purchase of the amateur photographer web site, iStockphoto, for $50 million or IBM’s use of the practice to collect 37,000 new ideas in a 72-hour time frame.

But is crowdsourcing just a new twist on the beta community concept found in the software industry? In some ways I see parallels between the two. In my experience, many product features have been created from beta user communities before a product is released for general availability. Once released, that same community can be quick to find areas of possible improvement. While crowdsourcing suggests that consumers create content, in the beta community environment, users do the same. In both cases, problems are being solved through active engagements.

The crowdsourcing article in Business Week lists 4 guidelines to follow for a successful crowdsourcing practice, one of which is to build communities into social networks. Under this guideline, the author cites how software company, Cambrian House, uses “royalty points” to reward product contributions that can be cashed in for stock. While I think that is particular example is an innovative approach, it doesn’t sound any different from the results companies can achieve through a robust beta community relationship.

Whether it is crowdsourcing or a beta community, the key is to build and then strengthen your relationships with a user community in order to harness their passion and feed new ideas to your organization. Understanding how to use both approaches can help a company stay competitive and relevant to your current an prospective customers.