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White Paper: The Evolution of Creative Crowdsourcing

White Paper: The Evolution of Creative Crowdsourcing

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Published by Crowdsourcing.org

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Published by: Crowdsourcing.org on Mar 17, 2014
Copyright:Attribution Non-commercial

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02/04/2015

 
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The Emergence of and Variation in Crowdsourcing Business Models
Author: Kristen Grimmer, University of Kansas
Market Snapshot
The financial crisis and economic recession in the last few years was the most severe since the 1930s. Timely government intervention kept the economic contraction from turning into a depression but serious ramifications for the working
public developed in spite of the government’s efforts
 (Elwell, 2013, April 18, p. 1). Companies laid off workers permanently as the production rate slowed down (Levine, 2013, Jan. 24) and unemployment rose from 4.6% in 2007 to 10.1% in October 2009 (Elwell, 2013, April 18, p. 1). Manufacturing, construction, and professional and business services were industries that laid off the most workers. The high unemployment rate meant that professionals with a specific skill set found themselves without a job and unlikely to find another (Levine, 2013, Jan. 24). This professional class of workers contributed to the growing talent surplus, which made landing traditional company employment a highly competitive process. With many looking for work or ways to supplement their income, new thinking about how to make up the financial disparity came into play (Levine, 2013, Jan. 24; Pink, 2001). In the last decade, attitudes about corporate America have shifted in the professional class. Instead of the end-goal being to have the same company job until
 
 2 retirement, professionals have turned to opportunities made possible through the Internet. Digital networking has turned freelancing into a viable primary occupation rather than a secondary job meant to supplement income. The idea of loyalty to oneself has replaced loyalty to a company (Pink, 2001). This entrepreneurial boom, coupled with the growing penetration of the Internet (Hulkower, 2013), has fostered participation in a digital world for the average working professional (Shirky, 2008). The idea of freelancing and growing online communities have allowed for a digital work environment. Although this does not exclude the unskilled individual, it has become possible for highly skilled professionals to connect regularly with other freelancers and companies that want to fill short-term or specific job needs. The trend of companies outsourcing jobs to freelancers is now an industry norm that began with companies looking for ways to be more cost effective. With the recent economic recession, many companies cut positions internally leading to situations where employees were sometimes asked to take on more responsibilities to compensate for the loss of coworkers. Employing freelancers gives companies a way to cut down on costs and to relieve overburdened employees without increasing overhead (Pink, 2001). The trend of outsourcing jobs
became known as “crowdsourcing,” first defined by Jeff Howe, editor at Wired Magazine, who stated that “crowdsourcing represents
the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the
 
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form of an open call…The crucial perquisite is the use of the open call format and the large network of potential laborers,” (
Howe, 2006a, p. 1). Crowdsourcing models have significant impact on the way companies perform business-related tasks and more specifically, the way the advertising industry operates. In the past, companies would post a Request for Proposal, which led to advertising agencies competing against one another for the company contract. The crowdsourcing model has morphed into a viable and acceptable alternative to the traditional advertising agency (Williams, 2013). Like most industries, crowdsourcing companies are just as diverse in nature. Different companies use different crowdsourcing models and, depending on client needs, some work better than others.
Rise of Crowdsourcing Business Models
The crowdsourcing business model simply defined is a process where a company takes a task usually handled by employees and offers it to a group of outsiders, usually a network of people online. (Howe, 2006a; Whitla, 2009). The open call for an assignment may truly be posted to any individual who wishes to undertake the task, such as in the case of Doritos when the company invited the consuming public to submit a commercial idea for the Superbowl (Erickson, 2012). However, the call may also be limited to a network of people assembled by a mediating firm, such as in the case of Boom Ideanet where the firm posts the job to an internal network (FAQs, n.d.). Crowdsourcing is an umbrella term housing several variations of the labor model. The crowdsourcing landscape has been organized into six areas by

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