Thursday, April 1, 2010

'Crowdsourcing' gets companies cheap help online

By Jon Swartz, USA TODAY
SAN FRANCISCO — Penny-pinching companies are hiring specialists to plumb the vast resources of the Web in search of cheap expert help.

The concept, called "crowdsourcing," is gaining momentum among businesses, non-profits and individuals who are getting work done at a fraction of the normal cost. And with more people online with ultrafast Internet connections, companies have a vast database of experts to choose from.

Why pay an ad agency or employees millions of dollars, the reasoning goes, if you can offer a prize and tap the talents of experts and amateurs worldwide?

"We're turning idle time into income," says Jordan Ritter, founder of CloudCrowd, one of dozens of crowdsourcing services. "There is no shortage of cheap, quality labor out there," says Kelly Thompson, chief operating officer of crowdsourcing vendor iStockphoto.

Crowdsourcing is being used on everything from a Super Bowl ad for Doritos to improvements in movie recommendations on Netflix. Often the projects, such as logo design and open-source software, are largely created by a few individuals.

For example, XLNTads acts as a middleman between major brands such as Procter & Gamble and Anheuser-Busch and its network of 15,000 videographers. The major brands pay XLNTads a fee to help them find creative types to create online and TV ads.

Since 2007, Frito-Lay has dangled prize money and the promise of Super Bowl airtime to wannabe ad execs to create a TV spot for its Doritos chips. It gets thousands of entries and has chosen spots as good as something a Madison Avenue agency might produce for hundreds of thousands of dollars.

Little data exist on the fledgling market, but analysts say it is growing in popularity. "Anecdotally, we're seeing more examples of crowdsourcing — even by the government to make policy (on protecting the environment)," says Joe McKendrick, an independent technology analyst in Philadelphia.

Some companies have gone a step further, with services that target experts in specialized fields. GuruStorms is a Facebook-like service that helps small businesses find and brainstorm with experts in fields such as technology, medicine and business. Experts are paid $500 to $5,000, based on their contributions. Businesses pay GuruStorms a fee.

The cost-cutting approach does not come without risk. Some tasks are performed by underage youth in underdeveloped countries, if the process is not properly managed.

"It is a concern, but the work is typically awarded to the talent that bubbles to the top," says Mark Walsh, co-founder of GeniusRocket, which has worked on 275 crowdsourcing projects. For PepsiCo, it sponsored a contest that resulted in 30 viral videos for Pepsi's Aquafina Splash. Pepsi paid $10,000 for three of the videos, which were viewed more than 400,000 times.
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