Market information using Crowdsourcing

  • by admin
  • Posted in Innovation
  • March 23, 2015
Market information using Crowdsourcing

According to Howe (2008), crowdsourcing gives companies the capacity to harness the amount of knowledge and talent dispersed among the human race. While doing so, it frees the power of creative destruction.

The term “crowdsourcing” has been first used by Jeff Howe and Mark Robinson in the June 2006 issue of Wired Magazine, to describe a process whereby the power of many, often amateur, co-creators was used to undertake tasks that were once the preserve of a few specialists (Howe, 2006).

“Crowdsourcing takes place when a profit oriented firm outsources specific tasks essential for the making or sale of its product to the general public (the crowd) in the form of an open call over the Internet, with the intention of animating individuals to make a [voluntary] contribution to the firm’s production process for free or for significantly less than that contribution is worth to the firm” (Schwienbacher and Larralde, 2010, p. 5)

Outside, contributors help companies to resolve problems, to design new services and to develop innovative products (Howe, 2009), also but they take part in the production process and create value; their capacities can be considered as valuable assets; they are integrated into corporate structures and their actions can be monitored as if they were employees (Schwienbacher and Larralde, 2010). The principle is based on meritocracy, if the quality of work is valued properly. But companies should consider that not all the crowds are created equal according to Howe (2006). According to Kleemann et al. (2008), companies make use of the crowd in general for low cost reason.

Schwienbacher and Larralde (2010) describe different types of crowdsourcing, as shown in Table 1

Type of Crowdsourcing Description
Permanent open calls Companies ask for any new information or documentation
Participation of consumers in product development and configuration Companies ask for comments and suggestions on current and future products
Product design Companies ask to develop a whole new product from A to Z
Competitive bids on specifically defined tasks or problems Companies ask to give a solution to unsolved problems
Community reporting Same as before apart that the work is done by a known community instead
Product rating by consumers and consumer profiling Companies ask for product reviews and opinions for other users to see
Customer-to-customer support Companies ask customers to help other customers and use it for consumer knowledge and product design

Source: Schwienbacher and Larralde (2010, p. 6)

Howe (2008) sustains that the framework for crowdsourcing is coming from a handful of computer programmers who demonstrated that a community of like-minded peers could create better products than a multinational corporate like Microsoft.

Howe (2006) argues that the crowd is more than intelligent, it is also talented, creative, and amazingly productive. Crowdsourcing uses the power of the technology of our days, liberating the latent potential within us all. It creates an environment of perfect meritocracy where the result of a well done job is all that matters. Age, gender, race, education and job history belong to the past. Crowd gives to all people the opportunity to discover, practice and improve their skills.

The style in which work was organized, talent was employed, research was conducted and products were made and marketed was completely changed by crowdsourcing (Howe, 2008).

According to, crowdsourcing initiatives are organized under seven top-level industry categories: Crowdfunding, Cloud Labor, Collective Creativity, Open Innovation, Collective Knowledge, Community Building and Civic Engagement. The second level is dedicated to cloud labor tools that support collaboration and communication between labor demand and supply.

SMEs can harness the power of the crowds to obtain critical information about foreign markets and so to overcome the barrier of limited market information faced by them going international.

The Internet is often promoted as an effective tool for facilitating collaboration between geographically distant parties (Loane, 2006). This kind of collaboration happens in a wide variety of areas including scientific research, software development, conference planning and creative writing (Loane, 2006).

Tapscott (2008) suggests that crowdsourcing is extremely eloquent in an international context, as these co-creators, as well as customers, may be located in different countries. It is considered being a paradigm shift in terms of how and where work is organized, capabilities are harnessed, research is conducted and products are made or marketed, which does not conform to traditional ways of conducting business. Anyway, for the young generation who has grown up with the Internet, applications provided by Web 2.0 and the principles involved are intuitive, as they are already adept to, collaborating, sharing, remixing and creating.

According to , Amazon Mechanical Turk represents one of the most important players on the cloud labor market in the world.

The Amazon Mechanical Turk (or MTurk) is a crowdsourcing Internet marketplace developed by Amazon Web Services that enables individuals or businesses (known as Requesters) to co-ordinate the use of human intelligence to perform tasks that computers are currently unable to perform. The users, called on the platform, workers looking for paid employment, select and perform these knowledge tasks with the help of their computers, submit the results and then get paid (Fuchs, 2007).

“Developers use the Amazon Mechanical Turk web service to submit tasks to the Amazon Mechanical Turk website, approve completed tasks, and incorporate the answers into their software applications. To the application, the transaction looks very much like any remote procedure call: the application sends the request, and the service returns the results. Behind the scenes, a network of humans fuels this artificial intelligence by coming to the web site, searching for and completing tasks, and receiving payment for their work” ( FAQs, accessed on May 23, 2013).

The payment per task ranges between zero, a few cents (in most cases) and some dollars. One example of a task assignment is to determine the presence of opinion in a text article and submit the result, e.g., “Your task is to read the news article or blog post below and determine whether it is editorial in nature or is an expression of opinion, and whether it is positive, negative, or neutral” (, accessed on May 23, 2013). After the task is formulated it is sent to an automatic verification system that forwards to multiple users that will input their results which will be used by the task assigner who aggregates and sells the results as a commodity.

The reward for an estimated 10 minutes is in general four dollar cents. For an hour the result is 24 cents if the worker repeats similar tasks.

Using MTurk SMEs can conduct fast and at low costs targeted research on different users from different countries or even country regions to obtain valuable information about those markets before going there. This service is especially designed to offer the possibility to refine the focused group (according to sex, age, location, education, profession, hobbies etc.) in order to gather sustainable data.

Following the trends, crowdsourcing will soon become the norm, posing significant challenges for firms, driving change and forcing a new model of democracy that will have to be transparent, collaborative and engaging. Marketers will no longer control their brands and will need to understand how to effectively engage with the Internet generation and manage a discernible power shift in favor of the consumer (Tapscott, 2008). These developments are likely to influence in an even greater way the firms that are sourcing and selling internationally.

According to Howe (2008), crowdsourcing will in a short time be the way in which work will be done.

  1. Fuchs, C. (2008). Wikinomics: How Mass Collaboration Changes Everything [Review of the book Wikinomics: How Mass Collaboration Changes Everything, by Tapscott, D., Williams, A.D.]. International Journal of Communication, 2, 1-11.
  2. Howe, J. (2008). Crowdsourcing: Why the power of the crowd is driving the future of business. Crown Business; First Paperback Edition edition.
  3. Howe, J. (2006, June 14). The rise of crowdsourcing. Wired. Retrieved May 2, 2013, from:
  4. Kleemann, F., Voß, G.G., Rieder, K. (2008). Un(der)paid innovators: The commercial utilization of consumer work through crowdsourcing. Science, Technology and Innovation Studies, 4(1), 5-26.
  5. Lambert, T., Schwienbacher, A. (2010). An Empirical Analysis of Crowdfunding. Retrieved 12 July, 2013, from:
  6. Loane, S. (2006). The role of the internet in the internationalisation of small and medium sized companies. Journal of International Entrepreneurship, 3(4), 263-277.
  7. Tapscott, D. (2008). Grown up digital: How the Net generation is changing your world. New York: McGraw-Hill.