Crowdsourcing Your Brand: The Math Doesn’t Work

by | Jun 5, 2012 | Marketing

As much as our work at Forty is about “touchy-feely” stuff (psychology, emotion, metaphor, experiences, etc.), I’m still a numbers guy at heart.

That’s why I get so frustrated every time I hear someone recommending crowdsourced design services like 99designs. The math just doesn’t work out for business owners, but it looks like such a compelling solution on the surface that they keep falling for it.

If you’re not familiar with it, the idea behind these services is that instead of hiring a designer, you hold a “design contest,” receive dozens (or hundreds) of design submissions, pick the best one, and then award that person the money. (Companies like 99designs provide a web-based platform for running these contests.) It’s an intoxicating concept for many reasons, including that we misperceive increased options as increased value, and that it sounds vaguely like some kind of social revolution someone read about in Fast Company once.

There’s been a lot of talk in the design community about how bad these services are fundamentally bad for designers, but — here’s reality — business owners don’t care what’s good for designers. And that’s fine; it’s not their job to care. Their job is to get the most value possible for their business.

This is where the numbers come in. Work the numbers, and crowdsourcing design doesn’t make much sense.

Let’s say you find an up-and-coming student designer at your local university, and pay them $1,000 to design a logo for you. If their normal rate is $50/hr (which is reasonable for a less-experienced designer), you’ll get about 20 hours of their time for research, brainstorming, designing, revision, etc. It’s not a ton, but for a small business you could probably get a pretty good logo out of that project. In addition, that student designer has made some much-needed money, you’ve supported the local economy, etc.

Let’s compare that to a crowdsourced “design contest.” You put up the same $1,000, and you get 100 logo variations from different designers. They’re certainly not going to put 20 hours worth of thinking and effort into a 1-in-100 chance at getting $1,000. If you divide that 20-hour-effort by the 1-in-100 chance, it comes to a reasonable time expenditure of just 12 minutes.

Think about that. For a 1-in-100 chance of $1,000, to make about the same money as the student designer is making, it only makes financial sense for the crowdsourced designers to put just 12 minutes of effort toward your project. Or maybe the designers on these sites don’t have the skills to command a $50/hr rate, and they’re willing to put 30 minutes ($20/hr) or even 60 minutes ($10/hr) toward your project. That’s still not much.

Under the pressure of those constraints, many “designers” on crowdsourcing sites revert to simply stealing other logos, tweaking them, and submitting them as original work. This practice is so widespread that many crowdsourcing sites implicitly tolerate it, banning designers only after they’re caught three times. (You can imagine how many stolen logos go unnoticed.)

It’s a hundred lower-quality designers putting a few minutes of effort into your project (and possibly stealing the design from someone else) versus one higher-quality designer putting 20+ hours of effort into your project (and creating an original logo).

At its core, the crowdsourcing model is based on the “monkeys with typewriters” principle: it’s the hope that if you have enough options, you’ll find a diamond in there somewhere. It’s the misconception that you’ll increase value by increasing the number of options. However, if you want a coherent story, you’re always going to be better off hiring one writer, even a less-experienced writer, than you will be trying to build an army of monkeys pounding on keyboards. You want better options, not more options.

Consider outspoken crowdsourcing advocate Guy Kawasaki, who used crowdSPRING to get a design for his new book. He paid $1,000 to receive 760 designs from 226 designers (an average of $1.32 per design, or $4.42 per designer). The end result? The crowdsourced versions weren’t good enough, so he hired designer Sarah Brody to do it right.

The idea of crowdsourcing design is tremendously appealing at first, but when you work through the math, it just doesn’t work out. There has been lots of buzz about the process (“the wisdom of crowds!”), but little evidence of effective branding results coming from it.

All hype aside, it just doesn’t make business sense.

Tags:
When Does Skim Pricing Make Sense?

When Does Skim Pricing Make Sense?

Skim pricing is a pricing strategy in which a company sets a high initial price for a product or service, and then gradually lowers the price over time. This strategy is often used when introducing a new product or when there is a high level of demand for a product or...

Marketing Truths No One Will Admit

Marketing Truths No One Will Admit

In a recent thread on /r/marketing, the question was asked, "What is something no one in marketing will admit, but is definitely true?" While some of the answers in the thread were obviously snarky or pessimistic, there were also several answers that held a lot of...

The Product Design Pyramid

The Product Design Pyramid

If you make it to the top, you'll have one of the best and most delightful products in your market The product design and user experience design industries are full of vague phrases like "delightful experiences" without a lot of specifics about how to get there. Many...

Smart People Always Want to Mess This Up

Smart People Always Want to Mess This Up

Several weeks ago, my company released a new product: a tool that helps small service businesses with client follow-up. We did it very quietly, late one night after most of the department had gone home. A few of the product leaders made the decision, flipped the...

Five Pillars of Social Media Marketing

Five Pillars of Social Media Marketing

It's easy to get whipped up into the hype of social media marketing. Maybe you're just getting started with a new brand account, or maybe you've just been put in charge of all the company's existing followers. Either way, here are some basic principles that'll help...

Purpose-Driven Companies Make More Money

Purpose-Driven Companies Make More Money

“A real purpose can’t just be words on paper. It has to get under the skin of every member of your organization…. If you get it right, people will feel great about what they’re doing, clear about their goals, and excited to get to work every morning.”— Roy SpenceWhen...

What’s Your Company’s Internal Compass?

What’s Your Company’s Internal Compass?

One of the hardest questions we ask in our discovery workshops is also one of the simplest and most fundamental: “Why does your company exist?”You’d think most CEOs would have a ready (and passionate) response to that question, but most don’t. When asked that...