Commercials: Crowd-Sourcing Ads Such as 'Hands Off My Doritos' Threaten Advertising Agencies

March 10, 2010 — -- Remember the Doritos Super Bowl ad that featured a chip-craving canine forcing a dog collar on a human? Or the one where an obstinate young boy warns his mother's date to keep his hands "off my mama" and "off my Doritos"?

The commercials might have left you chuckling but many people in the advertising industry aren't sharing in the laughter. Both ads are examples of crowd-sourcing: The use of the Internet to broadcast an open call to a large group to work on a project with the winner being awarded the job by a company.

Crowd-sourcing started as a novelty but has grown into something much bigger and now threatens to further erode agency profits and undermine the traditional agency-client relationship. It has invaded the advertising space, with large companies such as Pepsi, Heinz, General Motors and Starbucks using crowd-sourcing. Doritos aired winning submissions in its ad-creation contest, including the dog and mama ads, on the Super Bowl broadcast.

As crowd-sourcing has evolved, it is now becoming a seriously organized threat to the traditional advertising agency. Late last year, Unilever fired advertising agency Lowe and opted to crowd-source its Peperami TV and print campaign with the promise of about $20,000 for the winning idea.

At first, crowd-sourcing was an innocuous way to generate buzz in the mid-2000s. Clients would ask consumers to create advertising for the brand. Tools such as cheap video cameras and YouTube facilitated consumers' creating some good but mostly poorly shot, dimly lit, low- to no-concept submissions. Heinz, Doritos and Chevrolet were early adopters.

In the next generation, clients and agencies used freelance professionals to submit ideas online for fees that were a fraction of the cost of traditional agencies and selected winners from the submissions. This model, being used in many fields such as science (citizen-science) and reporting (citizen-reporters) generated a lot of ideas but still required traditional agency help to refine, produce and buy and place the media.

Crowd-sourcing Gets Organized but Lacks Relationships?

In its latest iteration, crowd-sourcing is becoming more organized and relevant. Witness OpenAd.net, which, with 11,500 creatives from 125 countries, bills itself as the world's biggest creative department. OpenAd.net boasts clients such as DaimlerChrysler, Virgin Atlantic and MTV.

Lest you think OpenAd.net is just a Craigslist for creative people, the membership-driven site holds pitches and allows members to shop and buy from a gallery of ideas. Members have to submit a creative brief and OpenAd.net facilitates the licensing of the ideas and, upon purchase, hands off the creative and the idea to be produced in collaboration with the purchaser.

Traditional advertising agencies criticize crowd-sourcing. They argue that it is just a ruse for getting speculative work cheap. Brick-and-mortar agencies say they sell relationships and the ability to gain a deep understanding of their clients' products, services, industries and competition; all necessary to develop campaigns that have lasting effect. Take the rules to the Doritos contest, which give no real details about the target audience, product or strategy.

But it seems that nothing can slow the inexorable march of the Internet. Companies such as giant Procter & Gamble, Dell and Netflix are using crowd-sourcing and companies such as Genius Rocket and Victors and Spoils, which bills itself as the first creative ad agency built on crowd-sourcing principles, are getting assignments and growing while growth of traditional agencies has stalled.

In his book "Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business," Jeff Howe called crowd-sourcing faster cheaper, smarter and easier. But, you wonder. According to the independent corporate research firm Pirc, executive compensation has continued to rise while the major fallout of crowd-sourcing ideas is that a lot of very creative people get nothing for their efforts and their product stays on the Internet, well, forever, to be used as creative fodder for others.

One of the downsides to the Internet is that it threatens copyright protection. Everyday millions of pictures are downloaded by a simple right click of the mouse (control click or drag on a Mac), text is cut and pasted, ideas are translated a whisked away.

Mother's Advice: Don't Follow the Crowd

It reminds me of how once upon a time shopkeepers raised families on what they earned as expert-specialists in communities across the country. Now, Walmart and Costco pay small wages and send the profits out of the community. My mother, who, for the most part, successful attempted to raise a productive citizen, always warned me that there was danger in a crowd. Don't follow the crowd, she would tell me, just because it's popular doesn't make it right.

Nevertheless, it seems to me that crowd-sourcing can have a place. It can help us figure out faster how to integrate digital and social media into the marketing mix. It can help blend new and emerging media like mobile. It can help traditional agencies locate and hire new talent. But as flawed as the traditional model is, it still has a century of experience in how to engage clients, protect ideas and create salaries and stability for millions of workers.

The work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Larry Woodard is president and CEO of Vigilante, a New York-based advertising agency that develops consumer-centric advertising campaigns. He is also chairman of the American Association of Advertising Agencies New York Council and the recipient of many prestigious industry awards, including two O'Toole Awards for Agency of the Year, the London International Award, Gold Effie, Telly, Mobius, Addy's and the Cannes Gold Lion. A blogger and a frequent public speaker, Woodard enjoys discussing the intersection of media, politics, entertainment and technology.