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Betting on the crowd

An avalanche of companies is heading to the internet to engage customers. Here's how to make it work for your brand

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It is not exactly new nor guaranteed to succeed. But at a time when brands are tightening their budgets in the face of a protracted slowdown, it has become a buzzword for brands and enterprises trying to solve problems, become more efficient, innovate and grow.

In the last two years at least 60 Indian companies have relied on crowdsourcing to generate new logo, redesign a package or shopfloor or even provide inputs at the product development phase. They've been galvanised partly by the realisation that in a world where the cog-wheels of ideas and innovation keep you ahead of the pack, those cog-wheels may be the very people you're attempting to serve - your customer. They are also discovering that apart from creating buzz, crowdsourcing may turn out to be the most efficient process to discover fresh ideas from a hidden talent pool at a cut-rate price.

The fact is, the economics of the business is hard to beat. Arun Mehra, CEO of Talenthouse, an online platform that connects brands and talent by listing competitions on their site, says that brands get more than 10 times the number of ideas and renditions of a logo or a jingle through these online campaigns than they otherwise would at their advertising agencies. Their fees to Talenthouse: Rs 15 lakh, versus the Rs 50 lakh on average that they would normally fork out to said agencies. "There are 3,00,000 college graduates from places like the National Film Institute or NIIT looking for a career and on the other hand, brands are willing to take a leap of faith," says Mehra.

"It's a win-win."

Conceptually speaking, crowdsourcing has been around for ages. The Oxford Dictionary, for instance, was compiled by harnessing the talents of dozens of amateur philologists as volunteers in the 1800s. Still, it's caught on fire today simply because of its promise of decentralised problem solving that leverages the collective grey cells of digital communities - or the 'crowd' - in a bottom-up process, with a central platform or authority as mediator.

Wooing your customer
Take, for instance, Lee, the US denim jeans brand, which recently took to the to hold a competition around sustainability which the brand considers an important aspect of its identity. Here, the objective was clear. "With a competition like this, we're engaging youth in a different manner," says Chakor Jain, business head, Lee. "We cannot, any longer, rely on entreaties to go out and buy something," he adds.

Lee's campaign asked people to deposit their castaway denims to fashion new products out of them. The first stage involved getting people to drop their old pairs off at Shoppers Stop in exchange for discounts at the retail chain. After around 5,000 pairs were collected, they were deposited with 100 Hands, an NGO that works with village-based artisans. Meanwhile, a competition for the most innovative designs using denim was thrown open to the public, the lure being a brand new Vespa Scooter. The winning designs would then be fashioned into products by the artisans.

The response, says Jain, was overwhelming. In poured a torrent of ideas that ranged from the predictable, such as dresses and jackets to the quixotic, such as eyeglass frames and pagdis. The firm eventually hopes to make products based on the winning entries and market them. But it's not so much the products that are critical to Lee as is the process of engagement with the masses. "There are so many intangibles about your brand that you are now able to communicate at a different level," says Jain.

While Lee's senior management will most definitely not be wringing their hands if their design competition doesn't throw up bankable products - the initiative seems more a marketing effort than a product innovation drive - there are firms that are dead serious about using crowdsourcing for some of their critical needs. When Micromax decided it was time to come up with a new logo in 2012, it wasn't an ad agency that it headed to, but Talenthouse, which is a 50:50 joint venture between Reliance Entertainment and California-based Talenthouse. The winning entry - a 'punch,' intended to convey youth and aggression - was one among 2,500 sent in, and that too from North America.

Even a more exacting discipline such as product design has begun to gravitate to the net for ideas. When chewing gum brand Happydent decided to come up with a new packaging for its flip-top box, it too opted for a campaign on Talenthouse. The winner, a 24-year-old Mumbai-based illustrator, Sebin Samuel, had stumbled upon the competition while surfing the Net. It took him two-three days to sketch out and send in his entries. His reward: a brand new iMac. However, for a struggling artist trying to establish himself in an ocean of big fish, the exposure through the competition was the real prize. "People started to recognise me. My contacts grew and now people have begun to approach me rather than the other way around," says Samuel.

Today, seemingly every brand that is a force in the consumer space across industries and products - Volkswagon, Nerolac, Fox Traveller, Anurag Kashyap, Tata Nano, Hyundai, Hero and Unilever are just a few - have recently been or are currently in the hunt for new designs, jingles or photographers. The real marketing revolution, however, is yet to come says Mehra. India is populated by thousands of small-medium enterprises that are neither able to engage the more established advertising firms nor reach out to talent.

With platforms like Talenthouse, they may have a shot at reaching an audience they never imagined it was possible to connect with.

Reality check
It is worth asking if the odes sung to crowdsourcing are hyperboles or not. Yes, firms looking to experiment with low-cost models for creative work makes sense as there's very little downside. Also, with an increasing proliferation of brands and declining customer loyalty the need to connect with consumers is all the more urgent. Using crowdsourcing to influence top of mind recall is therefore logical. But how well does it work?

"Often, it can be nothing more than a public relations stunt," says Roopak Saluja, founder & chief executive officer, The 120 Media Collective. "But when it works, it is a great engagement tool. The ultimate objective should be to develop communities and get them to understand your brand's ecosystem," adds Saluja. Yet, very few brands do that.

120 Media's digital agency, Jack in the Box, was a pioneer in this space in India when it launched Puma's Pimp Your Sole campaign in 2010 - one that invited artists to design five new designs for Puma's popular flip-flops. Part of the effort involved cruising around in an Ambassador and inviting graffiti artists to spray paint it - many of whom also competed to get their imprints on those soles. A related event was then staged inside a large Puma outlet. All of these efforts were filmed and then uploaded onto the net.

Jack in the Box's strategy was to keep the brand in conversation beyond just the talent hunt - you could even argue that the hunt was incidental to the brand's overall goal of engaging and building a community. By synergising a variety of events, some digital, some not and creating content out of it, the Pimp Your Sole website attracted 8 million impressions and 50,000 fans in just 14 days. By stopping at just a talent hunt, brands may be missing the whole point of the exercise.

Disrupting business
While crowdsourcing may appear to liberate us from the tyranny of the middle man, in reality, it may be doing little more than creating some short-lived buzz and empowering a handful of individuals. Plus, the danger with a fad is the clutter it brings along with it and the lack of differentiation among ideas. The more significant outcomes, say industry observers, are business models that leverage the crowd to disrupt the world in which they operate.

For example, Australia-based Design Crowd is one of the hottest companies in the design space that allows designers to respond to briefs that companies post on the site for things like logos or website designs. Most of the jobs are not quite the big-ticket items you would hope for - in the $400 range. However, physical location becomes largely irrelevant. And it could become big business for those who can suddenly leverage their professional talents in ways they never imagined before. Designcrowd reported a few months ago that Kolkata-based designer Arun Bhattacharya made $10,000 over the course of four weeks using their service.

Other disruptive models seem to be gaining traction. Uber, a California-based start-up that connects taxi-seekers with underutilised luxury cars and drivers through a smartphone app, has opened offices in Bangalore. CrowdANALYTIX, a software solutions company also based out of Bangalore, parcels out a client's problems into various pieces and then creates a contest that poses a modelling challenge for each of those components. The winning solution for the last contest, which tackled 'predicting the quality of red and white wines' for a client, was apparently '400 per cent more optimised than the client's expectations,' according to Information Week.

The future
The world is not going to see major corporations shift their ad campaigns from an agency to a crowdsourcing model overnight. But things are changing rapidly. For instance, a recent study says that 68 per cent of mobile access happens in your own home - just showing how much a part of one's existence devices have become. This year will also signal a quantum leap in digital ad spends - from around 5-6 per cent of total spends last year to around 15-20 per cent. This means that a digital strategy has become core to everything a company does and it is a discipline that agencies need to spend time understanding.

The Government of India understood this by crowdsourcing the new symbol for the rupee. If you are among the fence-sitters, this may be the time to seize the trend and make it an integral part of your brand's life. Just remember to do it right.

When corporates go crowdsourcing

For all the novel ways in which ideas are generated today, some wonder how would they materially impact a company’s fortunes? “Social media can do a lot of good, but how much value is it adding to a company’s top and bottom line?” asks Dinesh Goel, founder of Innovative Ideators, a crowdsourcing solutions company. The answer may lie in an exercise Britannia conducted when it needed to figure out a venture in the food space that could give it ‘exponential revenue growth and justifiable profit margins in five years,’ according to the company’s brief.

Commissioned by Britannia to solve this problem, Goel’s company went about canvassing 122 business schools and 3,495 MBA candidates who generated 320 solutions to this question. Britannia found three of them convincing enough to warrant development into full-fledged businesses across the snacks, healthfoods and dairy lines. “It’s not about asking a question and getting an answer,” said Vinita Bali, MD, Britannia, in an interview posted on Youtube around that time. “It’s about getting a diversity of views.”

IT services company Mindtree had a similar quest. “We wanted to look at a new boost in growth,” says Srinivasan Janakiraman, president and chief technology officer, Mindtree. “IT services as a business is tied to linear growth. We wanted to capture value and bring some non-linearity into it,” he adds.

Unlike Britannia, the company decided to dig deep into its own ranks and create a business plan competition where the objective would be to cull winning entries that showed promise. The target: build businesses that generate $50 million in five years. Entries would be judged not just on the merit of the idea, but on the execution capabilities of the team as well. So far, the process has coughed up 100 concepts and two companies of which one — a cloud management and security software called VMUnify — has signed up eight customers and generated a small revenue stream. “This company should have been cash neutral by now. However, its hockey stick-like growth trajectory is probably around a year away,” says Janakiraman. Another company that came through Mindtree’s ranks, but not out of its crowdsourcing competition, is a digital surveillance and analytics company that is on track to doing Rs 5 core in business this year.

These efforts are still very much in their infancy. What is more important is that the company has become serious about incubating from within using a crowdsourcing platform. Its current business plan competition closes on September 30 and a January 2014 board meeting of the company will formally approve the winning business plans. Prominent entrepreneurs are brought in to talk about their experiences and to expose newbies to the world of transforming ideas into companies. A small strategy cell helps budding intrapreneurs with their business plans.

“These efforts are no longer a luxury but a business imperative,” says Janakiraman. “Today Cisco and  Microsoft can do what we do for them so why come to us? Today, we’re in business because they don’t want fixed costs. We can’t take that for granted,” he adds.

Vinita Bali
MD, Britannia Industries
 
Srinivasan Janakiraman
President & CTO Mindtree

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