In advertising, there’s little virtue in going against the crowd, ironic as that may sound for an industry that prides itself on creating unique ideas. But with Web 2.0 having firmly established the importance of the crowd, transparency and engagement are now the cardinal rules for any brand’s strategy. It’s unwise not to heed their call and the last few years have seen strategies that aim to take the crowd into account, whether it’s flash mobs, the importance placed on a web film going viral or the various iterations of UGC. Yet none of these have caused as much controversy as the current buzz that surrounds crowdsourcing.

Its premise is simple: let the crowd come up with ideas for a brief and, in some cases, let them vote on the winner. The ramifications, however, are huge. Whereas crowdsourcing was primarily seen as a strategy best suited for start-ups or small clients, recent moves like Unilever’s decision to part from its agency of 16 years, Lowe, London, on its Peperami account in favor of a crowdsourced campaign are a signal that major marketers are willing to try outsourcing their entire agencies to the crowd. While not scuttling its agency of record TBWA\Chiat\Day, Los Angeles, Pepsi will gamble big at this year’s Super Bowl with the Refresh Project, an online cause marketing campaign that will crowdsource ideas on how and where to distribute grant money. The campaign will replace the beverage brand’s

Super Bowl ads, the first time in 23 years that it has foregone advertising during the game. To stamp a buzzed-about initiative as the next new ad model has, at this point, become so commonplace in the industry that it elicits instant eye rolls, but with major moves like these, some watchers are placing their bet that crowdsourcing can actually fit the bill as a viable alternative. 

“It’s a very natural fit in marketing because it’s essentially recognizing a fact that has been true to some extent for a long time, which is that it’s not really up to a company to create its own brand,” says Jeff Howe, author of Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business and originator of the term, which he coined in a 2006 Wired magazine article. “Crowdsourcing recognizes that the consumer has always had a very powerful role to play in that process, and it acknowledges that and gives them part of that power to create the message.”

But the crowd can be an unruly bunch. While crowdsourcing works on the principle that great ideas can emerge from the crowd, the crowd, says Howe, can also work to drown good ideas out. He gives the example of Kraft’s competition in June of last year to name its new flavor of Vegemite, a popular Australian spread. The result was the regrettable iSnack 2.0, a name that received instant ridicule, prompting Kraft to abandon the name after four days.

Brands trust that agencies will use expertise to create consistent, on-target ad messages that have a significantly greater chance of avoiding the embarrassing missteps that could be the pitfall of relying on the crowd. It follows then that crowdsourcing’s very principles could also limit it as a viable model. 
Not so, says Evan Fry, CCO of Victors & Spoils, Boulder, which bills itself as “the world’s first creative (ad) agency built on crowdsourcing principles.” V&S aims to provide clients with the benefits of crowdsourcing combined with the strategic expertise of an agency. 

“We believe that if you offer any given brand a face and the feel of an ad agency, where you have people who know their business intimately, can work on maintaining their brand identity and solve their brief, that agency could then use the crowd to deliver the brand with stuff that works,” explains Fry, a former VP/creative director at Crispin Porter + Bogusky.

With Fry, V&S has a full-time creative director, as well as a CEO, John Winsor, COO Claudia Batten, an account director and plans for a strategy director, meaning that a team is in place to manage client business and ensure that a brand’s message stays on-target, while leveraging the cultural relevance and outside thinking that the crowd can bring.

But while crowdsourcing celebrates all things creative and democratic about the Internet, it begs the question: how much of this idealism about the crowd is masking crowdsourcing’s attractiveness as simply a cost-effective gambit? Unilever’s Peperami campaign paid $10,000 to its winner, copywriter Kevin Baldwin, and $5,000 to the runner-up, while Pepsi’s Refresh Campaign, which aims to run throughout the year cost $20 million, as opposed to the $33 million it paid last year for its Super Bowl spots. 

“We’re a small start-up, so we don’t have a big marketing budget, we really don’t even have an advertising budget, per se,” says John Farris, director of marketing for Ashland, Oregon-based Brammo, an electric vehicle company, that used platform crowdSPRING to generate ideas for its logo, in conjunction with its agency, CP+B. “So we knew we had to be innovative in building awareness for the company, and while using crowdsourcing wasn’t just for exposure or to stand out, we knew that would likely be a by-product.”

Fry concurs that cost is a benefit, noting that with V&S, clients are only going to pay for what’s needed on a given assignment because they won’t have to contend with a staff full of people as in a traditional agency, simply the key players on staff assigned to the brief and the eventual winners, who receive compensation on a scale depending on the complexity of the project.

But for Farris and Fry, it’s simply a matter of doing business in an industry that is being affected by a slow economy and, consequently, shrinking budgets. Those in the design industry, however, are more vociferous in their concern. Cost-effective doesn’t have the positive connotations that crowdsourcing’s supporters ascribe to it, they say. Rather, cost-effective means cheap – both in price and quality of execution – and designers fear that it’s undercutting their industry.