“Brilliant creative, from creative people everywhere”


Introduction

The labour market is rapidly changing as it was first known by long term employment and now more and more by ‘contingent’ workers (Eamonn, 2015). Especially contracting talent is done in a more flexible way. Reports even state that by 2020 about 60 million US people will be ‘contingent’ workers (Eamonn, 2015). Crowdsourcing platforms provide the opportunity for brands/companies to manage talent in a flexible way. Tongal is such a crowdsourcing platform, but what does Tongal actually do?

Tongal is an example of a crowdsourcing platform that connects brands to talent all around the world for the production of original video content. Therefore, it disrupts the advertising and marketing business. The market Tongal aims for consists of approximately 16 billion dollars in revenue of  video advertisements (Exchangewire.com, 2016).

Tongal was co-founded by James de Julio in Los Angeles in 2008 (Rapkin, 2014). De Julio was irritated by the inefficiency within Hollywood’s movie industry. Therefore, he ended up founding Tongal at Madison Avenue to help creative people work in a more efficient way (Rapkin, 2014). A nice little thing to know is that Tongal’s name comes from the statistician Francis Galton, who is known for guessing the weight of an ox by using the wisdom of the crowd in 1906. Thus, Tongal makes brands able to crowdsource the production of original video content by connecting them to talent all around the world (Tongal.com, 2016).

How does Tongal work?

Tongal connects approximately 50,000 talented people to brands that are in need of original video content for advertisement. This makes brands able to reach out to the talent they need and makes talented people able to work from wherever they want. The creation of the content is divided into three phases: Idea phase, Pitch phase and Video phase (Tongal.com, 2016). Before the community of Tongal starts generating content within these phases, a brand has to first consult Tongal. Understanding the brand, the customer, and the opportunities and challenges are key within this consult. Together with Tongal, the brand defines the challenge that gets posted on the Tongal platform. The budget of the challenge is based on a ‘name your own price’ (NYOP) method, where the brands define the budget and together with Tongal identify the possibilities.

Next, the community of Tongal jumps in and starts creating content. First, the idea phase. Within this phase, the community of Tongal generates ideas for marketing campaigns based on brands’ challenges. Tongal incorporates guidelines within this process that increase the quality of the ideas (Alexy et al., 2011). The best ideas are picked for further development; winners are rewarded with a certain amount of money. Second, the pitch phase is known by letting the community pitch ideas of how to visualize one of the winning ideas using text, storyboard or video. Again, the best pitches are chosen and rewarded. Lastly, the video phase lets the winners create the actual video and allows others to collaborate as well by using a ‘wild card’. Due to the ‘wild card’, Tongal experiences no risk at all. The makers of the winning video get a monetary reward and the company is allowed to use the video on their website or on television. (Tongal.com, 2016)

Video “How does Tongal work?”

Business model

By connecting the brands with talent all around the world, Tongal is able to create fresh, compelling, high quality content (StartUp Beat, 2011). As said earlier, the budget of each campaign is based on a NYOP method, if the price is reasonable. NYOP is innovative and differentiates Tongal by making them able to generate high quality video content at a price no brand can match (Hinterhuber et al., 2014). Apart from providing talent and brands with a creative platform, Tongal earns money through subscription and monthly fees (StartUp Beat, 2011). In addition, Tongal price discriminates by offering different packages to brands that make them able to increase the number of ideas, pitches and videos to choose from (Doepke et al., 2015). This is called multipart pricing: fixed and variable fee (Goh et al., 2013).

Conclusion

All in all, Tongal is a crowdsourcing platform that disrupts the advertising business by connecting brands/companies with talent all around the world. In the end, high quality video content is generated, at a price no brand can match. Tongal provides talented people with the flexibility they want/need and provides brands/companies to reach out to the talent they need. As Tongal connects two sides, it makes money on the brand side by asking a fixed subscription fee and a variable fee for different packages. Since times are changing, and especially the labour market that leads to more and more contingent workers, the question remains: To what extent will brands start outsourcing their internal businesses to the crowd?

References

Alexy, O., Criscuolo, P., & Salter, A. (2011). No soliciting: strategies for managing unsolicited innovative ideas. California Management Review, 54(3), 116-139.

Doepke, K., & Doepke, K. (2015). Tongal captures value by making creative work accessible. Openforum.hbs.org. Retrieved 23 February 2016, from https://openforum.hbs.org/challenge/understand-digital-transformation-of-business/business-model/tongal-captures-value-by-making-creative-work-accessible

Eamonn, K. (2015). Blurring boundaries, uncharted frontiers. Retrieved 23 February 2016, from http://dupress.com/articles/business-ecosystems-boundaries-business-trends/

Exchangewire.com,. (2016). Global Video Ad Spend Reaches USD$16.1bn; Marketing Costs Up 30% in June | ExchangeWire.com. Retrieved 23 February 2016, from https://www.exchangewire.com/blog/2015/08/06/global-video-ad-spend-reaches-usd16-1bn-marketing-costs-up-30-in-june/

Goh, K. H., & Bockstedt, J. C. (2013). The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles.Information Systems Research, 24(2), 334-351.

Hinterhuber, A., & Liozu, S. M. (2014). Is innovation in pricing your next source of competitive advantage? Business Horizons, 57(3), 413-423.

Rapkin, M. (2014). Crowdsourcing Site Tongal Awards Its Winning Ad Pitches. Businessweek.com. Retrieved 23 February 2016, from http://www.bloomberg.com/bw/articles/2014-04-17/advertising-crowdsourcing-site-tongal-awards-its-winning-pitches

StartUp Beat,. (2011). Featured Startup Pitch: Tongal – Using the web to democratize the film and video production business – StartUp Beat. Retrieved 23 February 2016, from http://startupbeat.com/2011/06/02/featured-startup-pitch-tongal-using-the-web-to-democratize-the-film-and-video-production-business/

Tongal.com,. (2016). Create Original Video Content – TV Ads, YouTube, Branded & Social Videos. Retrieved 23 February 2016, from https://tongal.com/

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