Crowdsourcing
Posted by Pat Kitano at 3/26/2007 9:08 AM 
Categories: New Business Models, social networking, Social Media
Categories: New Business Models, social networking, Social Media
At Inman News Blog today, I address how consumer advocacy is affecting service businesses like restaurants. The restaurant reviews of the anonymous public have become just as validating as, and more urgent than those of the newspaper food critic. As the public becomes use to the power of their voices, particularly with the upcoming 2008 Elections, it will open up radical consumer advocacy and force businesses to adopt real time servicing to deal with these voices. After all, if you're a business not monitoring your online reputation, your ignorance can only hurt you if you receive a bad review online.
Corporate America sees this trend and is adopting "Crowdsourcing" - leveraging their socially networked customers to provide viral marketing and feedback for their products and services. It's disruptive... for example, the crowdsourcing of photographs in flickr and online photo libraries like IStockPhoto is disintermediating the professional photographer as pricing for stock photos has dropped 90%.
Wired Magazine discusses how old guard newspaper publisher Gannett is upending its whole news gathering operation by adopting crowdsourcing:
The initiative emphasizes four goals: Prioritize local news over
national news; publish more user-generated content; become 24-7 news
operations, in which the newspapers do less and the websites do much
more; and finally, use crowdsourcing methods to put readers to work as
watchdogs, whistle-blowers and researchers in large, investigative
features.
Regarding citizens as watchdogs, the Wired article cites an example of how readers coordinated in researching a scandal related to high sewage prices that is causing civic government changes.
Newspapers are now forced to engage bloggers and social networks to crowdsource. Friday's OReilly Radar article (noted first by Greg @ Bloodhound) reports on how the San Francisco Chronicle is in trouble.
The Bluffton Today www.blufftontoday.com is a prime example of crowdsourcing in action. A Bluffton, South Carolina hyper-local newspaper produced my Morris Communications, the Bluffton Today generates stories from their weblog as well as a feature called the VOX. The VOX is a phone in source of croudsourceing. The paper focuses is on Bluffton-relative information with limited national news. A number of research groups and communications colleges and universities are studying Bluffton Today for its relevance and the potential in consumer gathered information.
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Sounds like a lot of folks stopped reading at the jacket cover of The Wisdom of Crowds. If you read it carefully, crowds are only wise in certain well-defined circumstances.
User generated content is great for entertainment (YouTube), but is problematic for hard facts, like news and opinions like restaurant reviews. I see two issues – mining the information and determining the validity of the information.
Today it’s difficult to pour though the thousands of “hits” or feeds to find the open source information you’re looking for. Even with good search tools, the sheer volume makes it hard to gather and assimilate the information. As the volume and sources of information increase, I see the problem growing. I believe there is and will continue to be a value to someone organizing and presenting the information.
The openness of user generated content may very well be its downfall. That openness will be exploited by anyone with a motive - whether its corporate profit or an axe to grind. Given the current state of the Internet it will be nearly impossible to determine if the opinion is honest or nefarious. As the community grows, so will the number of questionable participants. There isn’t a near term replacement for a trusted source, in fact they may become more important.
I think there will be a growing need for organized, reliable, trusted, sources of information. There are an number of models out there – from Angie’s List to CitySearch. I would expect the most successful will be the ones that provide information and reviews on a narrowly focused subject, for example Real Estate Agents in Seattle, or Restaurants in Phoenix.
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I agree with you Dave... I've discussed the flaws of the Wisdom of Crowds. Yelp and their brethren aren't foolproof, but they are efficient in that they aggregate reviews for perusal.
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As I started reading about your example of Crowdsourcing I immediately thought of the Zagat Guide. As you may know the Zagat's is a collection of reviews and ratings for restaurant which are from individuals who care enough to comment. Letting the customers vote and then presenting the totals in a common and useful format. Crowdsourcing before the Internet and blogs?
John Corey- Real estate investor, 20+ years - multiple states and countries.
http://johncorey.wordpress.com/ - advice for real estate investors.
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As a long time New Yorker, I've always respected Zagats for the top 50 restaurants. However, their readers, many of whom are rich enough to frequent those top 50 restaurants, tend to be off in reviewing ethnic restaurants, particularly Asian restaurants. That's why it's great to see the underlying data in review databases like Yelp...
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