‘Wikify’ Your Brand

The old saw “half my ads work, I just don’t know which half” is no longer valid. Chances are, if you’re still focused on broadcast and print, far less than half actually work. Since Google lit the explosion of pay-per-click advertising, companies everywhere are rethinking their media spend. Using context-specific advertising, companies can create what I’ve dubbed “micro-relationships” that last for a millisecond but can be infinitely more effective than a TV ad.

However, this was just the beginning. Marketers should be gearing up for an even more profound transformation. Because the New Web radically reduces collaboration costs, marketers need to completely rethink the modus operandi of their companies, of how they create value for customers, build relationships and go to market.

How so? Well, what do MySpace, InnoCentive, Flickr, Second Life, YouTube, Linux, the Human Genome Project and the Chinese motorcycle industry have in common? They are examples of mass collaboration—where peers come together to create value. Today, thanks to the New Web, encyclopedias, jetliners, operating systems, mutual funds and much more are being created by teams numbering in the thousands or even millions—outside the bounds of traditional corporate hierarchies and supply chains.

What’s happening is much more than so-called social networking. Mass collaboration is becoming a new economic mode, changing the way society organizes innovation, production and the creation of goods and services.

The quintessential example is Wikipedia—a collaboratively created encyclopedia, owned by no one and authored by tens of thousands of enthusiasts. With five full-time employees, it is 10 times bigger than Encyclopaedia Britannica and roughly the same in accuracy. It runs on wiki software that enables multiple users to edit the content of Web pages. Despite the risks inherent in an open encyclopedia in which everyone can add their views, and constant battles with detractors and saboteurs, Wikipedia continues to grow rapidly in scope, quality and traffic. The English-language version has more than 1 million entries and there are 92 sister sites in languages ranging from Polish and Japanese to Hebrew and Catalan.

If you can create an encyclopedia through mass collaboration, what’s next? How about an operating system (Linux) or applications software (Sugar CRM is one of 125,000 open-source application projects under way)? How about a mutual fund (www.marketocracy.com), a peer-to-peer lending system (www.zopa.com), designer T-shirts (www.threadless.com) or just about any physical item one can imagine (www.cambrianhouse.com)?

In the past, companies did market research, invented new products and services, and pushed them to customers through traditional media—call it “plan and push.” Today, leading companies use a different approach—call it “engage and co-create.” Customers participate in the creation of products in an active and ongoing way. In other words, customers do more than customize or personalize; they add value throughout the product life cycle, starting with design and extending to aftermarket opportunities for customer-driven commerce and innovation. As products—everything from software and games to cameras and cars—become smart and enriched with knowledge and services, there are endless opportunities to turn consumers into producers.

We are entering a new age of participation—where anyone with an Internet connection and a little motivation can participate in the economy like never before. They are creating TV news stories, conducting science, remixing their favorite music, designing software, finding a cure for AIDS, editing school texts, inventing new cosmetics or even designing automobiles.

Evidence is strong that firms can harness collective capability and genius to spur innovation, growth and success. For example, IBM estimates that working with the open-source community saves it nearly $1 billion per year over what it would cost to develop a Linux-like operating system on its own.

Take Second Life, which is created almost entirely by its users. Players in Second Life are not just consumers of game content; they are at once developers, community members and entrepreneurs. This means Second Life is no typical “product,” and it’s not even a typical video game. After all, users participate in the design, creation and production of the product, while Linden Labs is content to manage the community and make sure the infrastructure is running.

What’s a marketer to do? For starters diagnose the online communities that are growing around your company. Then develop a plan to engage and co-create value with them or engender new communities. If your product is baby formula, moms are organizing on the Web and you should be there—not just to learn from them, but to engage them. If you have smart products, open them up to your customers and the world and let them develop services and capabilities with you. Assess how you could reach outside the boundaries of your company to tap into the exploding markets for human talent like Procter & Gamble does with the new work of 90,000 chemists called Innocentive.

How could you apply wikinomics principles within your company to unleash the power of your own human capital for better value creation and customer relationships? It turns out the Web is not about dot-coms, eyeballs, stickiness or clicks. It is about enabling new models of innovation and competitiveness.