Does Crowdsourcing Have the Power to Replace Market Research?

In a simple tribute to innovative products born from crowdsourcing, a recent Business Pundit blog post praised crowdsourcing as a form of market data.  Gerri blogged, “No matter how cool or groundbreaking the invention, your product won’t sell if you aren’t in touch with what the customer wants.  Traditionally, this is dealt with by beta testing, polls, trust in an inventor’s vision, or iterating through different versions of a product to see what works best.  Today, customers can choose exactly what they want – from features, to design, and even price point – through crowdsourcing.”

Crowdsourcing indeed carries in its very DNA a reflection of what the consumer wants.  And it is certainly a tool that utilizes an engaged audience, often without even offering monetary compensation.  But is it, or will it ever be, a replacement of the market research practice?

In one of its most inclusive definitions, “crowdsourcing” can be described as “a type of participative online activity in which an individual, an institution, a non-profit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, via a flexible open call, the voluntary undertaking of a task.” *  Technology has made it possible to reach a wider audience than ever before, and crowdsourcing has grown to encompass a wide variety of functions – some of which include crowd voting, wisdom of the crowd, crowd funding, and more.  Brands can now quickly and easily reach consumers directly for their opinions and assistance, often without the need for a middle man.

But is this convenient ‘open call’ format for solutions and ideas a valid form of research?  From a methodology standpoint, crowdsourced sample may not be illustrative of any particular target market, as it is a non-random sample of the population.  As such, it is extremely vulnerable to representative biases.  To name just a few, these sample biases can skew towards respondents with access to high-speed internet connections, higher education levels, higher engagement in technology, intensified interest in a particular category or in providing their opinions in general.  Another methodological issue involves the validity of the data itself.  Because crowdsourced research is in full public view, brands are highly vulnerable to self-reporting biases.  With a lack of confidentiality or anonymity inherently built into public research, these biases can range from respondents intentionally portraying themselves in a particular manner to even intentionally providing invalid responses.

From a brand standpoint, there are also more direct concerns with using crowdsourcing as a form of market research.  When research is public, the marketplace has full view of the research you’re conducting and thus privacy is nonexistent.  This is, of course, a major concern for competitor imitation, but the impact on brand imagery cannot be ignored either.  Once the information is out there, consumers are free to react – and without private testing, brands cannot be certain that reactions will be positive.  Crowdsourcing research puts brands at risk of a snowball effect of negative word of mouth that would be near-impossible to reign in.  In 2012, Mountain Dew learned this lesson the hard way when the company decided to gauge consumers’ preferences in the naming of its new apple-flavored soda via crowdsourcing.  With names like “Hitler did nothing wrong” rising to the top of the leaderboard, Mountain Dew’s brand integrity was at serious risk.  Not surprisingly, the company cancelled the initiative and removed the content – but the story was already trending.

Perhaps most importantly, crowdsourcing does not involve the advanced data analytics that are the very foundation of market research.  Market research is devoted to the deeper interpretation of information through the use of analytical techniques, and it aims to transform complex data into relevant and usable insights.  Both quantitative and qualitative methods involve systematic and objective data collection and analysis, and its range of methodologies allows its applicability to span all types of business issues and strategic initiatives.  And while market research has the unique ability to reach beneath the surface to identify deeper perceptions that respondents may not be cognizant of or able to communicate verbally, crowdsourcing is by contrast limited in the depth of insight it can achieve.

Whether it be due to methodology issues, branding risk, lacking analytics, or some combination thereof, it is clear that crowdsourcing is not a replacement of traditional market research.  While crowdsourcing is indeed an exciting and useful tool in the world of research, like any singular methodology its effectiveness and relevance is entirely dependent upon the task at hand.  Although crowdsourcing may be a fantastic tool for identifying and fixing a bug in a software program, for example, it is not the ideal mechanism for concept testing a confidential new product.  As such, it may be most beneficial to consider crowdsourcing a complement to, or component of, market research as opposed to a replacement of the practice.