Executive Summary
Businesses have long since been looking for innovative ways to engage with their consumers. A relatively old marketing strategy, first implemented in 1714 in a contest held by the British Government (source), was revived in the 1900s for commercial purposes. This marketing strategy was later on christened as "crowdsourcing".
Loosely defined, crowdsourcing is a process that "sources" tasks to a "crowd" of people. The advances in technology within the past decade have really expanded its applications and increased the ease of participation. With globalization, crowdsourcing can take advantage of peoples skills from all around the global talent pool within open innovation projects. Paired with the Internet and e-commerce, it becomes a powerful channel that connects and commits action-ready consumers. Crowdsourcing brings power to the people.
Corporations have definitely realized and are capitalizing on the value of empowering people. As crowdsourcing researcher Daren Brabham puts it, “an idea can come from everywhere, but it’s better if it comes from my customers.” Corporate giants like General Electric, Pepsi Co., and Procter & Gamble have already used crowdsourcing to connect directly with their target audience, access extra resources, and enhance brand loyalty. Not only is it efficient, high involvement, and less costly, it also gives immediate results and decreases the risks of paying for failure.
As crowdsourcing can be applied in many different contexts, we will explore three specific components: crowdfunding, crowdmarketing, and crowdsourced new product development. But why is this trend arising now? With the repurposing of the Internet, the ubiquity of data-enabled electronic devices, and the millennial generation placing value more on group work and interaction, the environment has definitely been appropriate to foster the growth of crowdsourcing. In terms of consumer behaviour, certain theories such as the motivation theory, perception theory, equity theory help us interpret and better understand what motivates today’s consumer to participate in crowdsourcing activities and invokes positive reactions to crowdsourcing companies.
Loosely defined, crowdsourcing is a process that "sources" tasks to a "crowd" of people. The advances in technology within the past decade have really expanded its applications and increased the ease of participation. With globalization, crowdsourcing can take advantage of peoples skills from all around the global talent pool within open innovation projects. Paired with the Internet and e-commerce, it becomes a powerful channel that connects and commits action-ready consumers. Crowdsourcing brings power to the people.
Corporations have definitely realized and are capitalizing on the value of empowering people. As crowdsourcing researcher Daren Brabham puts it, “an idea can come from everywhere, but it’s better if it comes from my customers.” Corporate giants like General Electric, Pepsi Co., and Procter & Gamble have already used crowdsourcing to connect directly with their target audience, access extra resources, and enhance brand loyalty. Not only is it efficient, high involvement, and less costly, it also gives immediate results and decreases the risks of paying for failure.
As crowdsourcing can be applied in many different contexts, we will explore three specific components: crowdfunding, crowdmarketing, and crowdsourced new product development. But why is this trend arising now? With the repurposing of the Internet, the ubiquity of data-enabled electronic devices, and the millennial generation placing value more on group work and interaction, the environment has definitely been appropriate to foster the growth of crowdsourcing. In terms of consumer behaviour, certain theories such as the motivation theory, perception theory, equity theory help us interpret and better understand what motivates today’s consumer to participate in crowdsourcing activities and invokes positive reactions to crowdsourcing companies.