Video Bargain Bin for Brands

Crowdsourcing producers make a play for the most lucrative category of creative output—but tell agencies not to worry

The modern day brand is a content machine—it must fan, friend, and follow as easily as it entertains, evokes, and engages. That need for constant output can get expensive and has created enough demand to transform crowdsourcing, a content solution once seen as a novelty, into a serious cost-saving option used by agencies and major brand advertisers alike. For startups facilitating the crowdsourcing machine, that’s a good thing. 

The idea of pulling creative work from a pool of online talent isn’t new to the ad world. But in recent years it’s spread from graphic design, led by sites like TopCoder and communities like Crowdsortium, to narrow nuts-and-bolts functions, like the search campaign optimization offered by Google Ventures-backed Trada. And now, crowdsourcing has infiltrated the top shelf of creative work, the 30-second spot, thanks to the explosion of online video. (In the second quarter of this year, the number of Americans watching video online was up by 2.6 percent over last year, and the time spent watching those videos was up 14 percent, according to Nielsen.)

The reason is obvious. Video remains the costliest material to produce and doesn’t get cheaper in bulk. And while a big brand might spend $350,000 making three TV spots a year, an engaged Internet audience demands far more than that. The resulting content must also be more targeted—no dumping of TV spots onto YouTube. “Loyal customers want custom creative and stuff that speaks to them as a friend,” says Neil Perry, CMO of video crowdsourcing startup Poptent.

The answer from companies like Poptent and its competitor Tongal is to pose creative briefs as challenges for communities of emerging video producers. The resulting work is surprisingly usable, especially considering it’s created quickly and at a fraction of the typical cost. On Poptent, brands are required to pay for at least one ad from each contest; sometimes they buy up to 10. Tongal rewards creators of videos in a step-by-step system that allows for feedback from the brands along the way. So far it seems to be working. Tongal’s business has grown by 500 percent this year, and Poptent claims it’s on track to quadruple. The content creators are benefitting too. Poptent’s have earned $3 million in payments since 2007; the cash rewards in Tongal contests have grown by 40 percent in the last year, to $15,000 per spot or higher.

Everyone wins. Right?

Not according to, well, everyone. Like any disruptive force, crowdsourcing hasn’t been welcomed everywhere. Despite its steady growth and demand, there are haters. “It’s a very scary prospect for lots of folks because it’s a struggle of constantly proving yourself and earning the reward for a piece of effort,” says Jim McKeown, director of communications for TopCoder.

There’s the quality control issue—what if the wisdom of the crowd isn’t so wise? And churn—will freelancers who don’t win keep making work on spec?

Meanwhile, agencies worry that crowdsourcing will devalue their work and, eventually, lead to them being cut out altogether. But Tongal president James DeJulio says those fears are misplaced and doesn’t expect crowdsourcing to capture more than 10 percent of the online video creative market. He and Poptent’s Perry characterize their companies as tools for agencies, not replacements. “They need as many tools as they can get,” says Perry.