20 | April | 2015 | Consumer Value Creation

99designs, the world’s largest graphical design marketplace is one of the best examples of value co-creation. The platform was launched in 2008 by Matt Mickiewicz and Mark Harbottle. Their headquarters are based in San Fransisco, with additional offices in Paris, London and Rio de Janeiro. 99designs helps start-ups and small businesses as well as marketing agencies and other organizations with design needs by providing the creativity of over 250,000 graphic designers from 192 countries around the world. In excess of $62 million has been paid out to the above design community in more than 250,000 hosted design contests.

The platform acts as a middleman between business owners and graphic designers: the platform hosts contests in which clients post their needs and designers compete to fill their needs. Designers apply finished work customized to the clients’ specifications in the contest listing. According to 99designs, a win-win scenario exists: its clients gain access to the site’s resources (the designers), while the designers are given an opportunity to compete in contests that can accumulate to a pay-out of $600,000 monthly. This is not the only winning part of the platform: the company seems to have a big advantage too. It states it will generate up to $12 million in revenues and is growing monthly with 10%.

However, many graphic designers think the platform is not suitable to their needs. ‘99designs is something akin to a Walmart,’ says Dan Ibarra, industry veteran and co-founder of Aesthetic Apparatus, a Minneapolis design studio. ‘It’s not necessarily dedicated to bringing you good work, but to bring you a lot of it. That’s not necessarily better.’ 99designs fosters work in which the designer invests time and resources with no guarantee of payment, a huge gamble for designers competing against thousands of others. Competition is stiff: For each project, 99designs says an average of 95 designs are submitted.

Looking at the numbers, it also makes sense for business owners to not use 99designs. James Archer, CEO of Forty, explains this very well: ‘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/hour (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 crowd sourced “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.’

So why does 99designs work so well even though the designers don’t seem to like it and businesses could be better off by just hiring one designer? Please let me know what you think in the comments.

Resources:

https://www.crunchbase.com/organization/99designs

http://www.forbes.com/2010/07/09/99designs-spec-graphic-technology-future-design-crowdsourcing.html

http://forty.co/crowdsourcing-your-brand-design-the-math-just-doesnt-work-out

According to Andy Hart, Vice President for Microsoft Advertising & Online Europe (1), studies have shown that an average consumer in a city in Europe receives between 1,500 and 3,500 commercial messages every day. Consumers are increasingly starting to avoid ads and the rules of advertising are changing.

Therefore, between 2012 and 2013, Microsoft initiated co-creation sessions with consumers and designers and separate sessions with partners to redefine the ways that ads appear and to create concepts that would solve problems in and around shopping experiences (2). It was found that consumers want to see less advertising, but more information that can specifically help them get what they want.

According to industry experts, Microsoft’s Windows 8 platform was not getting a lot of advertiser’s attention because it was not as extensively adopted as platforms like Android (3). Therefore, in 2013, the company announced a new ad format for its Windows 8 platforms based on the aforementioned sessions. The company released several prototypes co-developed by brands and agencies (4). With this Ad Pano platform, the company reaches out to consumers on different devices, by offering multiplatform and cross-platform experiences. Supposedly, it will enable Microsoft to compete with iAd, a similar platform offered by Apple (5).

The new Ad Pano ad format is a panoramic format that allows advertisers possibilities to run ads in apps within Windows 8, Bing, Xbox and Skype. It offers an ‘active anchor ad experience, which comes to life with a series of 15 images that can simulate video, similar to a flip-book’ (3). Aim of these co-creations and the resulting new ad format was to create something meaningful for all involved: ‘the brand becomes more relevant while the customer becomes more connected’ (6).

Several prototypes were developed, for instance the campaign prototype for the hip and edgy clothing brand All Saints (below) and an ad experience for Vans shoes within Skype (7).

According to Grönroos and Voima (2013), ‘co-creation is the process by which mutual value is expanded together’ (8). Thompson and Malaviya (2013) have researched whether brands can benefit from communicating to consumers who have not been involved in a co-creation process that a target ad was developed by a fellow consumer. Even though the content of the ads is not necessarily designed via consumer co-creation, the platform itself is. You might expect that consumers would react favorably to this, but that highly depends on how a message recipient perceives the ad creating consumer.

The question is whether the media attention for this new Windows 8 ad platform was beneficial for Microsoft, because it was disclosed that the Ad Pano was co-created by consumers. Thompson and Malaviya (2013) found that if message recipients perceive the fellow consumer as someone more similar to them than a professional persuader, this increases the persuasiveness of the ad through the process of identification. However, if ‘message recipients are skeptical about the ability of ordinary consumers to develop effective advertising’ (9), this can hurt the persuasion of an ad.

Even though this case does not concern ads, but an ad platform, consumers might think that fellow consumers cannot develop an effective platform and that it is something professionals should do. This may influence how they perceive messages via the Ad Pano platform. However, other sources state that ‘by involving stakeholders and customers at the beginning of the process trust and empathy is quickly created’, which improves your position in the market, offering speed and agility (10). It would be interesting to find out more about how consumers have reacted to this platform tailored to their wishes for more tailored information to help them get what they want (9).

References
(1) http://www.12ahead.com/microsoft%E2%80%99s-andy-hart-future-advertising-and-co-creation
(2) https://youtu.be/gvaZ1XE_NRs
(3) http://www.ecommercetimes.com/story/78305.html
(4) http://www.clickz.com/clickz/news/2276494/cannes-lions-2013-microsoft-introduces-panoramic-ad-format-and-conceptual-ads
(5) http://adage.com/article/digital/microsoft-builds-iad-windows-8-apps/242166/
(6) http://www.brandingstrategyinsider.com/2014/06/customer-co-creation-for-higher-brand-value.html#.VTS-ZiGqpBc
(7) https://www.youtube.com/watch?t=38&v=SBFJPJw6-Rc
(8) Grönroos, C., & Voima, P. (2013). Critical service logic: making sense of value creation and co-creation. Journal of the Academy of Marketing Science, 41(2), 133-150.
(9) Thompson, D.V., & Malaviya, P. (2013). Consumer-Generated Ads: Does Awareness of Advertising Co-Creation Help or Hurt Persuasion? Journal of Marketing, 77(3), 33-47.
(10) http://www.brandingstrategyinsider.com/2014/06/customer-co-creation-for-higher-brand-value.html#.VTS-ZiGqpBc