Crowdsourcing in the advertising industry:

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Crowdsourcing in the advertising industry:

How idea competitions can improve the success of viral video campaigns

Master thesis

University of Groningen

Faculty of Economics and Business

Msc Strategy and Innovation

Frank Julsing

s1907425

frankjulsing@gmail.com

First supervisor: dr. T.L.J. Broekhuizen

Second supervisor: dr H. Snijders

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Abstract

This explorative study investigates the use of idea competitions for the creation of successful viral video campaigns. This study assumes that the success of the creation stage of such a competition depends on the number and quality of the videos. These aspects are influenced by several design elements and characteristics of the initiator, platform and participants. The results indicate that the brand strength of the initiator and monetary incentives positively relate to the number of submission. Need specificity relates negative to the quality of the videos. Higher need specificity results in more boundaries and can have a negative effect on the creativity of the participants. Furthermore the attractiveness of initiating firm (type of firm) can affect the willingness to participate in the competition. Additionally major exposure (e.g. via TV) can be a non-monetary incentive for participants and can push them to invest more in their projects. Next to the competition itself the quality of the diffusion of the videos (the seeding strategy) is a major success factor. Seeding in dense networks with short lines to hubs and bridges positively effects the diffusion of viral videos and ultimately the success of the idea competition and the viral campaign.

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Table of content

1 Introduction ... 5 1.1 Research question ... 5 1.1.1 Sub-questions: ... 6 1.2 Outline ... 7 2 Literature Review ... 8 2.1 Open innovation ... 8 2.3 Crowdsourcing ... 8 2.4 Idea competitions ... 9 2.4.1 Characteristics ... 10 2.4.2 Designs ... 10 2.4.3 Incentives ... 11 2.4.4 External factors ... 12

2.5 Quality of viral campaigns ... 12

2.5.1 Viral (Video) advertising quality ... 13

2.6 Diffusion of online viral marketing campaigns ... 13

2.6.1 Digital social network structures ... 13

2.6.2 The behavioural characteristics of people in the network ... 14

2.6.3 Seeding strategies ... 14

2.7 Success factors of viral video idea competitions (research framework) ... 14

2.7.1 Initiator Characteristics... 17

2.7.2 Platform characteristics ... 17

2.7.3 Crowd characteristics ... 17

2.7.4 Design elements ... 17

2.7.5 Quality of chosen video(s) ... 18

2.7.6 Quality of seeding strategy ... 18

2.7.7 Success of viral video competition ... 18

3 Methodology ... 19

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3.2 Measures/Topics discussed ... 20

3.2.1 Influencing elements/characteristics (creation stage) ... 20

3.2.2 Quality of video commercials ... 21

3.2.3 Seeding strategies (diffusion stage) ... 22

3.3 Brandfighters ... 22

3.3.1 The process ... 23

3.3.2 Stage involvement of contributors ... 24

3.4 Cases ... 25

4 Results ... 27

4.1 Motives and goals ... 27

4.2 Influencing factors on the success of the creation stage ... 27

4.2.1 Factors influencing number of submissions ... 28

4.2.2 Factors influencing the quality of the videos ... 28

4.3 The quality of the winning videos ... 29

4.4 Seeding strategies ... 34

5 Conclusion and discussion ... 36

5.1 Theoretical implications ... 37

5.2 Managerial implications ... 37

5.2.1 Initiators ... 37

5.2.2 Platforms ... 38

5.3 Limitations and Future research ... 38

6 References ... 40

Appendix I: Transcript interview director of Brandfighters: Oskar Bolhuis ... 44

Appendix II: Summary interviews clients Brandfighters ... 47

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1 Introduction

With the advent of the internet, the firm’s accessibility to external sources of information has grown immensely. Firms recognise the opportunities of the internet, especially for generating new product ideas. In 2006 IBM asked their customers for new product ideas via the internet, and received more than 46,000 ideas from 1400 people. The best ideas resulted in profitable projects (Blohm, Bretschneider, Leimeister, & Krcmar, 2011). Crowdsourcing, defined as “everyday people using their spare cycles to create content, solve problems and even do corporate R&D” (Howe, 2006, p.1), is used more often by firms to obtain ideas for new product development and improvement. Some platforms arose to address this need of firms. Such as Innocentive, who basically offers an online platform for firms to crowd source their innovation problems. Next to use of crowdsourcing for innovation reasons there are several other applications of crowdsourcing. Especially in creative industries this concept is not unheard of. For example, 99designs, which is a platform where firms can crowd source there design requests (logo design, web design, etc.).

A relatively new phenomenon is the application of crowdsourcing in the advertising industry. There are several online platforms that allow companies to use a pool of creative contributors to create for example a concepts for advertising campaigns (Battleofconcepts) or (online) video commercials (Brandfighters). Most of the research in the field of crowdsourcing is focused on innovation. There is still little known about the effects of crowdsourcing on the success of advertising products and therefor it is worthwhile to investigate this subject further.

This paper focuses on crowd creation, which is basically asking individuals to come up with new product ideas or create entire products. This because in the advertising industry, crowdsourcing is mostly used to obtain new advertising products. The most commonly used method of crowd creation is in the form of an ‘idea competition’, where (creative) individuals create an advertisement (video commercial, banner etc.) and compete with one another. This study focuses on the quality and virulence of online video commercials developed by users for firms that want to advertise via a viral effect. Viral advertising can be defined as: “unpaid electronic (e-mail, Web, or social media) distribution of business or user generated advertisements from consumer to consumer, based on ad content likeability, entertainment, and controversial characteristics” (Pretuscu & Korgaonkar, 2011 p. 221).

1.1 Research question

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6 products and design input for R&D. An idea competitions used for the creation of (online) videos revolves around finished end products and not just concepts. The participants are not only used for idea generation but also for production. The participants are solely responsible for the quality of the output and there it defers from idea competitions for innovation. It would be interesting to investigate what design elements and factors are important for idea competitions in the advertising industry and how they can be utilised to obtain a successful viral advertising product. This leads to the following research question:

RQ: How can idea competitions be utilised to create a successful viral video campaign?

1.1.1 Sub-questions:

There are many forms of crowdsourcing. This research starts by defining and identifying these forms.

What forms of crowdsourcing exist?

The success of an advertising product is mainly determined by the quality of the advertising product. So it is important to identify what advertising product quality is. The second sub-question focuses on this.

How to define (viral) advertising product quality?

An idea competition exists of several design elements. The particular design of an idea competition will have an effect on the quality of the products and the success. So it is important to identify the important design elements. Sub question three focusses on this.

How do design elements influence the outcome quality of idea competitions?

This study performs an exploratory case study in which an online platform is chosen that has produced several (viral) video commercials using crowdsourcing. The case study allows to see which factors influence the success of (viral) video idea competition. Sub question four focuses on this.

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1.2 Outline

Chapter two consists of a literature review and is divided in two sections. First the literature involving crowdsourcing and idea competitions are reviewed, important characteristics and elements are identified and explained. Secondly the important elements of the success of viral videos are identified and explained to better understand why some videos go viral and why some do not. Finally the important elements involving the diffusion of the videos are identified.

Chapter three is a methodology chapter and explains which cases where reviewed and gives a detailed description of the platform and the cases that were investigated. Chapter four contains the results of the case study and provides a detailed analysis of the cases and identifies why the idea competitions were (un)successful.

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2 Literature Review

2.1 Open innovation

Crowdsourcing is a form of open innovation. The key characteristic of the open innovation model is that not all innovation activities have to happen within the boundaries of the firm. Ideas for research projects can come from external sources and the development of the projects can also happen outside the boundaries of the firm. This in opposite to the closed innovation model where innovation activities happen within the boundaries of the firm. Here firms develop ideas using an internal R&D department that has their own production plants and marketing departments and have their own distribution channels. In the 1990s the closed model became less effective and the open model is now more commonly used. This because of four erosion factors: The increase availability and mobility of skilled workers, the expansion of the venture capital market, external options for unused technologies and the increase supply of highly capable external suppliers (Chesbrough, 2003). Firms started looking for ideas outside their own boundaries and realized that not all smart people work for them (Surowiecki, 2005). This is referred to as the outside-in paradigm (Gasman & Enkel, 2004).

2.2 Product innovation within the advertising industry

Innovation occurs at different levels in the advertising industry. Every advertising campaign is new and therefore can be considered new to the firm. Every new advertising campaign starts with its own innovation process. One can say that the production process of an advertising campaign is in fact an innovation process. Every advertising campaign is new in some way and therefore can be considered as a product innovation. Next to that there are also changes in how brands/products are being advertised. These new ways of advertising can also be classified as product innovations. For example: barcodes on billboards which can be scanned with smartphones so the user is directed to a website of the advertiser or the way Google sells the rights of search words are good examples of product innovation in the advertising industry. These are both new ‘ways’ of advertising, and can be seen as new advertising products. So the advertising industry distinguishes two types of product innovation:

1. changes in the way products/brands are being advertised 2. every new advertising campaign

2.3 Crowdsourcing

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9 “Large groups of people are smarter than an elite few, no matter how brilliant, better at solving problems, fostering innovation, coming to wise decisions, even predicting the future” (p.1). Firms try to exploit the knowledge of the crowd. By doing this, firms do not only expand their reach for new ideas, but they also minimize risk and uncertainty while the involvement of (potential) customers early in the innovation process increases the acceptance of the product (Enkel, Perez-Freije, & Gassmann, 2005; Tidd, Bessant, & Pavitt, 2005). The literature describes two critical assumptions concerning crowdsourcing and open innovation. First,”crowdsourcing opens the company’s innovation funnel and therefore the scope for screening ideas. Therefore, the company gains more ideas for innovations”. Secondly, “We is smarter than me, is the basic assumption. This leads to better selection of ideas and better development of innovations” (Ebner, Leimeister, & Krcmar, 2009, p. 343).

The literature basically distinguishes four types of crowdsourcing: Crowd Wisdom, Crowd Creation, Crowd Voting/selection and Crowd Funding. The crowd wisdom principle attempts to bring together individual knowledge of several different people in order to solve problems, predict future outcomes or help direct corporate strategy. The crowd creation principle attempts to ask individuals to come up with new product ideas or create entire products. The crowd voting principle involves the use of a crowd to evaluate and rank content or products. The crowd funding principle attempts to use the crowd as investors in a new product (Howe, 2008). This research focuses on crowd creation, and will not further address the other types.

Within crowd creation, four different types are distinguished; collaborating, tinkering, co-designing and submitting. Collaborating refers to a process in which individuals can collectively develop and improve a product. Tinkering refers to a process in which individuals make modifications to a product and some of these modifications are used in subsequent product releases. Co-designing refers to a process in which a relatively small group of individuals provides a firm with new product content or designs, while a larger group of individuals helps select which content or designs should be adopted by the firm. Submitting refers to a process in which individuals directly communicate ideas and/or products to a firm, this can be in the form of a competition (O’Hern & Rindfleisch, 2008).

2.4 Idea competitions

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10 usefulness and growth of crowdsourcing (Walter & Back, 2011). Idea competitions have recently gained attention from several authors that identified its positive effect on a firm’s innovation. For example Poetz and Schreier (2012) argue that ideas generated by users, via an idea competition, score higher in terms of novelty and customer benefit than those generated by professionals.

2.4.1 Characteristics

An idea competition has several characteristics that shape the outcome quality of an idea competition. Leimeister, Huber, Bretschneider and Krcmar (2009) show us an overview of these characteristics (see Table 1).

Criteria Description Characteristic value

Need specificity Addresses the scope of the theme/task.

If task specificity is high, organizers search for ideas concerning a specific scope. If task specificity is low, no specific scope is addressed.

Degree of idea elaboration

Addresses the quality and complexity of participants’ ideas.

In technically related ideas competitions, such as IBM’s “Innovation Jam,” organizers asked for more elaborated ideas in order to make the ideas comprehensive and tangible to the jury.

Organizational appearance

Addresses which way participants can submit ideas.

Ideas can be submitted by e-mail or letter. In most cases, ideas have to be submitted via an Internet-based platform. After submission, the ideas are presented on the platform and can be viewed, discussed, or evaluated by other participants during the competition.

Time line Addresses the duration of

the submission phase.

Duration ranges from a few weeks to several weeks (up to 30).

Incentives Addresses the prizes

offered.

Prices range from cash prices to non-monetary prices, such as exposure.

Target group Addresses participants’

qualifications. (skills & motivation)

Sometimes ideas competitions are characterized by participants’ age, interests, skills, etc.

Table 1 Characteristics of ideas competitions (Leimeister et al., 2009)

2.4.2 Designs

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11 competition is not always the most suitable option. They relate the technical and market uncertainty of an innovation problem to determine which type of project is best, and distinguish three types of projects. Firstly, the expertise-based project, is most suitable when there is a low uncertainty about whether the given solution will work (technical uncertainty) and a low uncertainty about whether the firm and the market will like the solution (market uncertainty). Secondly, the ideation project, is most suitable when there is a low technical uncertainty and a high market uncertainty. Thirdly, the trail-and-error project is most suitable when there is a high technical uncertainty and a low market uncertainty (see figure 1). Whereas the first two types of projects are suitable for idea competitions, and the last one is not (Terwiesch & Xu, 2008). When the technical uncertainty is high, an idea competition is often not suitable because this type of problem asks for a trial and error approach, which is difficult to achieve in one-shot idea competition settings that do not have multiple rounds.

There are two basic idea competition designs, the closed (solutions are not visible for peers or only after the deadline) and the open (solutions are visible to peers during the competition) model. In the open model peers are allowed to view the work of other participants and offer feedback during the competition (Blohm et al., 2011). Furthermore a competition can be one shot (one round) or multi round (Terwiesch & Xu, 2008).

2.4.3 Incentives

Terwiesch and Xu (2008) further argue that the reward system needs to be fitted to the type of innovation project. They argue that with an ideation project a ‘winner takes it all’ reward system is most suitable, and will in these cases result in the best ideas. For an expertise-base project a fixed price per solution can be more appropriate.

Market uncertainty (“Will the firm/market like it?”) Technical uncertainty (“Will it work?”) High

Low

High _{Trial-and-error} project Expertise- based Ideation project project

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12 Monetary incentives are widely used to attract potential participants to idea competitions. Walter and Back (2011) argue that the idea competition organizers should be careful with setting high rewards because this can result in a larger amount of submissions, often with lower quality because of underinvestment from the contributors. This will lead to higher transaction cost (i.e. Evaluation costs) and lower the return on investment. Contrastingly, Terwiesch and Xu (2008) argue that while more solvers may lead to underinvestment of the solvers, more ideas lead to more diversity in ideas and can outweigh or at least mitigate the effect of underinvestment. They further argue that higher transaction cost can be (partially) eliminated by designing a ‘multi-round idea competition’, where the first round is played with a large group of participants who make a relatively small investment (only develop a concept) and the second round is played with the better ideas of round one. The ideas from the first round can be evaluated and ranked by the crowd (crowd voting) to lower transaction costs even more. Boudreau, Lacetera and Lakhani (2011) also claim that the presence of more contributors leads to underinvestment of the contributors. However they argue that this is mainly the case for less uncertain problems. For more uncertain problems, adding solvers has a positive effect on the idea competition performance.

2.4.4 External factors

Next to the effect of (monetary) rewards, Walter and Back (2011) identified several other external factors that impact the quality of the ideas and/or the number of ideas submitted. They argue that the strength of the brand is positively related to the number of ideas submitted. The market maturity, which is the length of the existence of the platform, is positively related to both the number of ideas submitted and the quality of ideas. The specificity of the need has both a negative effect on the quality of the ideas and the number of ideas submitted. The duration of the competition only has an effect on the number of ideas submitted but has no effect on the quality of the ideas.

2.5 Quality of viral campaigns

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13 2.5.1 Viral (Video) advertising quality

The level of virulence of an advertisement depends on several aspects. Vries, Gensler and Leeflang (2012) argue in there study on viral advertising via social media (facebook), that the level of vividness, the position of the advertising (top of the page) and the share of positive comments on the advertisements are positively related to the level of virulence (number of likes). They further argue a u-shape relation between the level of interactivity and the level of virulence. So an advertisement that is highly vivid, medium interactive (urges the viewer to do something but not too radical), is posted at the top of the page and receives positive comments are more likely to go viral. Botha and Reyneke (2013) argue that videos that evoke a positive or negative emotion are more likely to get shared. “If viewers feel no emotion in watching a video, they are less likely to share it” (p. 169). Something similar is argued by Berger and Milkman (2012). They argue that content that evokes high-arousal positive or negative emotions are more likely to get shared. Southgate (2010) states that creativity positively affects online viral viewing volume.

Several scholars argue that creativity is an important element of an advertisement (Reid, King, & DeLorme, 1998; Ang & Low 2000; Till & Baack 2005; Ang, Lee, & Leong, 2007; Smith, MacKenzie, Yang, Buchholz, & Darley, 2007; Baack, Wilson, & Till 2008; Dahlén, Rosengren, & Torn, 2008; Sheinin, Varki, & Ashley, 2011; Lehnert, Till, & Carlson, 2013). Within the context of advertising three dimensions of creativity are identified: novelty, meaningfulness and emotional content (Ang & Low, 2000). Novelty refers to the degree of how an advertisement is unexpected and is different from others. Meaningfulness refers to whether the elements in the advertisement are relevant to the message that needs to be conveyed. Finally, emotional content refers to the feelings an advertisement generates. As indicated above, this is an important element for viral videos (Berger & Milkman, 2012; Botha & Reyneke, 2013; Southgate, 2010). “A creative ad is one that is novel, has meaning, and generates positive feelings” (Ang & Low, 2000, p.836).

2.6 Diffusion of online viral marketing campaigns

Next to the quality of a viral advertisement there are other aspects affecting the level of virulence of an online viral marketing campaign. Hinz et al. (2011) argue that the structure of the digital network used for the diffusion of the viral campaign and the behavioural characteristics of the people in the network are important elements affecting the level of virulence of an online viral marketing campaign. These aspects should be taking into consideration when devising a seeding strategy.

2.6.1 Digital social network structures

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14 networks and networks showing small average path lengths between people within a network are very efficient for viral advertising, whereas highly clustered networks are not that suitable. When networks are highly clustered and fragmented the seeding method is becoming more important. Shakarian and Paulo (2012) argue that in highly clustered networks require more seeding to reach a high level of diffusion and create a viral effect. So the structure of the network is important when determining a seeding strategy.

2.6.2 The behavioural characteristics of people in the network

Within a social network three types of persons are identified, hubs, fringes and bridges. Hubs are situated at the centre of clusters (sub networks), fringes are situated at the edges clusters and bridges connect two different clusters with one another. When firms are looking for a viral effect it is important to seed to the right type of persons (Hinz et al., 2011).

2.6.3 Seeding strategies

There is still some debate among scholars regarding seeding strategies. Several scholars argue that hubs spread viral information best and should be targeted when seeding a viral campaign. (Hanaki et al., 2007; Van den Bulte & Joshi, 2007; Kiss & Bichler, 2008). However some scholars argue that fringes should be targeted (Galeotti & Goyal, 2009; Sundararajan, 2006). The impact of triggering a critical mass is much stronger that the impact hubs can have on their cluster within the network (Watts & Dodds, 2007). The people most easily influenced have the highest impact on the diffusion of a viral message (Dodds & Watts, 2004). Hubs might be less influenced than fringes. Because of their central position in the network, they receive a large amount of information and may be subjected to information overload. This forces them to filter incoming information which can result in not sharing the incoming information (Porter & Donthu, 2008). Finally, Rayport (1996) suggests to exploit the strength of weak ties (bridges), when spreading a marketing campaign. However most of these theories have not been tested outside a controlled experiment or only with a computer analysis. Hinz et al. (2011) overcome this weakness by testing the seeding strategies in real life. They conclude that seeding to highly connected people (hubs and bridges) within a network is 52 percent more effective than seeding randomly and eight times more effective than seeding to fringes. This is not because of a higher level of persuasiveness by hubs but rather by the increased activity of hubs within networks.

2.7 Success factors of viral video idea competitions (research framework)

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Creation

stage

+

+ + + Design elements Crowd characteristics Initiator characteristics Platform characteristics + + Overall success of the viral video idea

competition (Effectiveness of the viral campaign)

Number of Videos Quality of Videos  Creativity  Vividness  Interactivity Brand strength Degree of need specificity Degree of Diversity of the crowd + Multi round Height of monetary rewards Contest duration + - - - +

+

Market maturity Number of participants Quality of chosen video(s) (Success of creation stage) Quality of seeding strategy (Success diffusion stage)

Figure 2 Research framework

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17 2.7.1 Initiator Characteristics

The initiator characteristics, brand strength and the degree of need specificity both influence the success of the creation part of a viral video idea competition. Brand strength refers to the strength of the brand that initiated the idea competition and is positively related to the number of participants. Strong brands attract more participants. The degree of need specificity revolves around the specificity of the assignment given by the initiator and is both negatively related to the number of ideas and the quality of the ideas. A very specific assignment has strong guidelines and boundaries which has a negative effect on the level of creativity and therefore on the quality of the ideas (Walter & Back, 2011).

2.7.2 Platform characteristics

The market maturity of the platform influences the success of the creation part of a viral video idea competition. Market maturity refers to the period the platform exists. There is a positive relation between market maturity and the quality of ideas. Longer existence of a platform results in a more experienced platform and crowd which will result in higher quality ideas. In addition there is positive relation between market maturity and the number of participants. The longer a platform exists the larger the crowd which will result in more participants (Walter & Back, 2011).

2.7.3 Crowd characteristics

There are two factors that originate from the crowd that influences the success of the creation part of a viral video idea competition, the number of participants and the degree of diversity of the crowd. The number of participants refers to the number of people that register into the competition and is positively affected by the initiators brand strength (Walter & Back, 2011) and the height of the monetary rewards (Terwiesch & Xu, 2008; Walter & Back 2011). There is positive relation between the number of participants and the number of ideas submitted. In addition there is a negative relation between the number of participants and the quality of ideas. More participants results in underinvestment by these participants, because the chance of winning decreases and therefor the willingness to invest, which will result in lower quality ideas (Boudreau et al., 2011; Terwiesch & Xu, 2008; Walter & back, 2011). The diversity of the crowd refers to the diversity in background of the crowd. There is a positive relation between the diversity of the crowd and the quality of ideas. More diversity results in more variety in ideas which has a positive effect on the overall quality of the ideas (Boudreau et al., 2011; Leimeister et al., 2009).

2.7.4 Design elements

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18 ideas are submitted (Walter & Back, 2011; Yang, 2012). Multi round refers to a competition with more than one round where in the first round only a concept has to be submitted. This factor is a moderator on the negative relation between number of participants and the quality of ideas (Terwiesch & xu, 2008). Height of monetary rewards refers to the height of the prize money. There is a positive relation between the height of the prize money and the number of participants (Walter & Back, 2011).

2.7.5 Quality of chosen video(s)

The quality of the videos and the number of videos are positively related to the quality of the chosen video(s). More videos and a higher average quality results in in a higher probability that there is a video with the right quality and characteristics. The quality of the videos is determined by the level of creativity (Ang & Low, 2000), level of vividness, and the level of interactivity (Vries et al, 2012). 2.7.6 Quality of seeding strategy

The quality of the seeding strategy positively relates to the overall success of the idea competition. It is determined by the structure of the network that is chosen for spreading the viral videos and to which persons (i.e. fringes, hubs and/or bridges) in the network the viral video is seeded (Hinz et al., 2011).

2.7.7 Success of viral video competition

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3 Methodology

The purpose of this paper is to gain insight in why (viral) video advertising products obtained via an idea competition are (un)successful. The literature gives a clear image about which elements are important for success. This study uses a case study to explore why certain viral advertising products obtained via a video idea competition are (un)successful. Yin (2003) distinguishes between three types of case studies. Explanatory, descriptive, and exploratory case studies. Because there is not much information available about this particular subject, the case study will have and exploratory character (Cooper, 2008). To get a better understanding of how idea competitions are used in the advertising industry, this study examines an online platform for idea competitions in the advertising industry. In this particular case Brandfighters was examined (from now on BF) which is a platform for online (viral) video idea contests. In addition six former competitions were examined to better understand why these (viral) advertising campaigns where (un)successful, especially focusing on the drivers for virulence.

3.1 Case design/data collection

Prior to collecting the data, BF was examined to get a better understanding about how they use idea competitions for the generation of (viral) video commercials. An interview was conducted with the owner of BF. A transcript of the interview can be found in Appendix I. Secondly the six former competitions, which were selected by BF, were investigated. These cases give a good representation of the average clients (initiators) of BF. To get a better understanding of why idea competitions are (un)successful, three successful and three unsuccessful projects were selected. The successfulness is determined by the initiators themselves and based on whether they reached their goals (i.e. effectiveness of the (viral) advertising campaign). To strengthen the investigation and to get a better understanding of the process and outcomes of the projects, semi structured interviews were conducted with key people from the initiators. All respondents were questioned about their overall opinion on the video idea competition, their motives and results of the competition. All interviews were either conducted face to face or via telephone. Questions were submitted to respondents in advance so that they could prepare. A summary of all the interviews can be found in appendix II. An overview of the cases and respondents is shown below (see table 2).

Firm Branch Name/Position Looking for viral

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20 Eneco Utilities J. Ravenek /Brand

manager Yes Unsuccessful Greenpeace Non-profit J.W. Dol/Communication coordinator Yes Unsuccessful De Nederlanden van Nu

Insurance A. Dijkstra/Manager Yes unsuccessful

Table 2 Firms/Respondents interviewed

3.2 Measures/Topics discussed

The result section is split into three parts, firstly, the process and the elements/characteristics influencing the quality and the number of videos are examined and subjected to a cross case analysis. Secondly, the quality of the videos are examined and will also be subjected to a cross case analysis. Finally, the seeding strategies of the several cases where examined and where compared with one another.

3.2.1 Influencing elements/characteristics (creation stage)

The literature identifies eight design elements and characteristics that affect the outcome quality of an idea competition (Boudreau et al., 2011; Leimeister et al., 2009; Terwiesch & Xu, 2008; Walter & back, 2011):

 Brand strength

 Degree of need specificity  Market maturity

 Number of participants  Height of monetary rewards

 Degree of diversity of the crowd (standard)  Contest duration (standard)

 Multi round (standard)

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21 Element/characteristic Way of measurement

Brand strength The brand strength is determined by search volume figures from

Google trends. 1_{Based on an empirical investigation the following}

thresholds are used to identify weak (<1), moderate (1-15) and strong (>15) brands. Only search volume figures for the Netherlands were examined since BF only operates in the Dutch market.

Degree of need specificity The degree of need specificity is determined by the specificity of the briefing and whether a preliminary script check was obligatory. The degree of need specificity can be either high or low.

Market maturity Number months between the founding of BF and the competition

Number of participants Absolute figure

Height of monetary rewards Absolute figure

Table 3 measured elements/characteristics of the competition and way of measurement

3.2.2 Quality of video commercials

The quality of a video commercial is determined by its effectiveness and level of creativity. Since in five from the six cases the competition was organized to obtain video commercials for social media the effectiveness can also be described as the level of virulence of the videos. The literature describes two important elements that increase the virulence of an advertisement. The level of vividness, and whether the advertisement holds interactive elements (vries et al., 2012). The level of creativity is determined by three elements, novelty, meaningfulness and emotional content (Ang & Low, 2000). The elements of the top three videos of all cases were rated (see table 4).

Element Creativity/

virulence

Way of measurement

Vividness Virulence The level of vividness is determined by the number of different shots, change in music.

Interactivity Virulence Interactivity is determined by whether a video contains a question or requests the viewer to do something (e.g. visit a website, join a social media community, like a fan page etc.). A video is rated as interactive or not.

Novelty Creativity The level of novelty is determined by the uniqueness/originality and

unpredictability of the video.

Meaningfulness Creativity The level of meaningfulness is determined by whether the video fits with the brands image and fulfils the assignment given by the client firm (initiator).

Emotional content Creativity The type of emotional content of a video can be entertaining, informative, or artistic.

Table 4 creativity/virulence elements

The elements vividness, novelty and meaningfulness were rated on a five point scale where 5 is high and 1 is low. Additionally the videos where rated on whether they contain interactive elements or

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22 not. Finally they were categorized on emotional content. The videos are categorized as entertaining, artistic or informational (see Table 5).

#rank ‘title video’ Score Storyline

Vividness 1/2/3/4/5 Short description of storyline.

interactivity No/yes + how

Novelty 1/2/3/4/5

Meaningfulness 1/2/3/4/5

Emotional content entertaining/artistic/informational

Table 5 example score table videos

3.2.3 Seeding strategies (diffusion stage)

The seeding strategies of the several cases where investigated. The literature argues the structure of the network that is chosen for spreading the viral videos and to which persons (i.e. fringes, hubs and/or bridges) in the network the viral video is seeded are important elements of success (Hinz et al., 2011). For all cases both these elements where examined.

3.3 Brandfighters

BF operates in the Dutch advertising industry and offers a platform for online video idea competitions with as end product creative video commercials. BF is a young firm founded in 2009 and operates in a specific niche in (internet) advertising in the Netherlands. During its existence the number of organized competitions has grown to around 30 competitions a year (see figure 3).

Figure 3 yearly number of competitions organized by BF.

BF offers a platform for video idea competitions. Brands that have a specific need for a video (commercial) or concept for a video can place an assignment on this platform. On this platform, creative people are subscribed and can participate in the different competitions. Before a competition begins, the brand creates a briefing in cooperation with BF. Once the briefing has been completed the assignment is posted on the website of BF. From this moment on, creative people/groups that are registered on the

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23 BF website, the participants (‘fighters’), can participate in the competition. The participants get to work, shoot their video and upload it before the deadline. After the deadline a jury, consisting of representatives from the brand, decides which video is the best based on the judging criteria. The results and videos are placed on the website and winners are rewarded financially.

3.3.1 The process

The innovation process of BF generally consists of nine stages. Figure 4 displays a schematic overview of this process.

Figure 4 simple schematic overview of the innovation process of BF

Firstly BF meets with the client and the specific need of the client is discussed in a briefing. The briefing consists of:

 A detailed description of the assignment. (what the brand is looking for);  The reason why the brand is giving-out the assignment;

 The goal that of the video;

 What the video is being used for (the media platform);  The target group of the video;

 Technical production criteria (Length, resolution, file size, etc.);  Judging criteria;

 Deadlines for contributors;  Rewards;

 Additional links to the general rules and conditions, a tips and tricks page, inspiration videos and contact information.

The verdict is made by a jury consisting of the key people from the client and sometimes also experts from the field (marketers etc.). The judgment is based on the criteria from the briefing. The videos are posted on the website of BF for the first time and the results are made public. Videos can now also be commented on by other fighters.

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24 The process of BF shows similarities with the open innovation model (Chesbrough, 2003). Figure 5 gives a schematic overview of the process at BF. Whereas traditional advertising agencies generate and develop ideas internally, BF outsources this part of the process to the crowd.

Figure 5 innovation model online video commercial Brandfighters

3.3.2 Stage involvement of contributors

BF is not involved in all the stages: it is involved in setting up the competition but is not involved in the actual idea generation and development of the videos. The clients are only involved in the beginning and at the end of the competition, but are not involved in the actual idea generation and development of the videos, which are performed by the participants (see table 6).

BF meets with client creation of assignment + briefing Start competition Participants sign-in Participants generate ideas and concepts Participants shoot and upload video

Judging rewards Videos are aired

Client X X X X X

Brandfighters X X X X X

Fighters X X X

Table 6 stage involvement

3

2

1 Client Assignment Research/ Idea generation Developmen Boundary of Brandfighters Ideas Video

Deadline

Advertising

Boundary of the client firm

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25

3.4 Cases

Primera

Primera is a Dutch retail chain founded in 1991. The chain is specialized in tobacco, magazines, postcards, books, and lottery tickets. Primera is a franchisor with more than 400 hundred franchisees which are mainly located in populated areas. Primera organized a video idea competition in August/September 2011. The participants were asked to create a commercial for the gift cards of Primera. The goal of the competition was to obtain a usable TV-commercial.

Centraal Beheer achmea (CBA)

CBA is a Dutch insurance firm and was founded in 1909 and is a subsidiary of the Achmea group. CBA is known for their “even Apeldoorn bellen” commercials, which are funny and a lot of times awarded for their creativity. CBA organized a video idea competition in October 2011. The participants were asked to create a new “even Apeldoorn bellen” commercial for home insurance. The goal of the competition was to create content for social media and newsletters.

TeamAlert

TeamAlert is a non-profit organization that focusses on traffic safety for young people. With several campaigns they try to make young people aware of their own responsibilities in traffic. TeamAlert mainly operates face to face. TeamAlert organized a video idea competition in November 2011. Participants were asked to create a video where TeamAlert was introduced as the traffic safety organization for young people. The goal of the competition was to Create brand awareness via viral effect social media.

Eneco

Eneco is an international energy company which operations in the Netherlands, the UK, Germany, France and Belgium. Eneco organized a video idea competition in January 2012. Participants were asked to create a video about wind energy. The goal of the competition was to Create brand awareness via viral effect social media.

Greenpeace

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26 De Nederlanden van nu (DNVN)

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4 Results

4.1 Motives and goals

The main motivation of all the respondents to organize a video idea competition was to create video content to increase brand awareness. Five of the six respondents answered they wanted to create content for online purposes with a main focus on social media. One respondent was looking for content to use for television production (see table 7). All respondents stated that this was the first time they organized a video idea competition. For all respondents it was an experiment with an open model to generate advertising content. Three of the six respondents also argued the relatively low cost of the project as one of the reasons to organise a video idea competition.

Firm: Goal

Primera Obtain a usable TV-commercial.

Centraal Beheer Achema Create content for social media and newsletter. TeamAlert Create brand awareness via viral effect social media. Eneco Create brand awareness via viral effect social media. Greenpeace Attract more Facebook fans via viral effect social media. De Nederlanden van Nu Create brand awareness via viral effect social media.

Table 7 Goals idea competitions

The literature argues that idea competitions are best suited for projects with a low technical uncertainty (Terwiesch & Xu, 2008). The creation of a video is a project of low technical uncertainty and therefor an idea competition is a suitable option.

4.2 Influencing factors on the success of the creation stage

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CBA Primera TeamAllert Eneceo Greenpreace DNVN

Number of submissions 10 11 5 13 36 10

Quality of videos (rated by clients)

High High High Low Low Low

Brand strength2 medium medium Weak Strong medium Weak

Market maturity 34 Months 29 Months 30 Months 33 Months 23 Months 34 Months

Monetary incentives €5000,- €5000,- €3000,- €5000,- €2500,- €5000,-

Need specificity low High Low High Low Low

Table 8 factors influencing the number of submissions/quality of videos

4.2.1 Factors influencing number of submissions

The cases show that strong/medium brands overall attract more participants which results in more submissions but that this effect can be compensated with higher monetary incentives. For example, if one takes a closer look at the two weaker brands that have a difference in height of the monetary incentives. One can see that DNVN has a higher number of submissions than TeamAllert who has the lowest number of submissions. It also shows us that firms with a higher brand strength not necessarily have to offer high monetary incentives, since the organization that offered the lowest monetary incentives, Greenpeace, has the highest number of submissions.

The interviewees further argued that the type of Firm/product could affect the willingness of participants to enter the idea competition. Dijkstra from DNVN argued that the topic of insurance is not very exciting and could possibly have had a negative effect on the number of submissions (personal communication, June 21, 2012). Whereas Greenpeace, that is an organization who is involved in actively protecting the environment, can be seen as an organization one would really want to create something for, which is reflected in the cases since Greenpeace attracted the most participants with the lowest monetary incentives.

4.2.2 Factors influencing the quality of the videos

The literature argues that more contributors leads to underinvestment and therefore can potentially result in a decrease in the average quality of the videos. Since none of the cases had a very large number of contributors this is probably not applicable on any of the cases. Also the market maturity of the BF platform should not be a factor since all competitions, with exception of the one from Greenpeace, where organized within a five month interval.

The results further show us that a high level of need specificity not always has to result in low quality videos. Primera had a very specific need but still had a successful project and according to them

2_{Average scores www.google.nl/trends 2011-now: Primera 18, CBA 18, Teamalert 0, Eneco 26, Green peace 3,}

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29 a high quality video. Possibly this is because of the platform the videos were created for, namely TV. According to Boelhouwer, this triggered contributors to go for the highest possible quality. Exposure of the winning commercial on TV and greater coverage was a major non-monetary incentive for contributors to submit a video (personal communication, July 25, 2012).

Three of the six respondents claimed that the idea competition was not successful. All three respondents claimed this was because of a failing viral effect. So the level of virulence seems important for video commercials created for social media. Since the sharing of videos online is getting more normal, the threshold before a video goes viral is much higher (Petrescu & Korgaonkar, 2011). Only truly remarkable and creative videos will go viral. Dijkstra from DNVN argued the following: “We were hoping for more remarkable videos that people would share instantly. Whether this did not happen because of the subject ‘Insurance’, the briefing of the assignment, or something else is not clear” (personal communication, June 21, 2012). Also Ravenek from Eneco argues that the viral effect was minimal, probably because the videos were not remarkable enough. He argues that this might be because of the strong rules and regulations concerning outgoing messages at Eneco which made the assignment very specific. This resulted in many boundaries which can potentially have had a negative effect on the creative process and therefore on the outcome quality of the videos (personal communication, August 23, 2012).

4.3 The quality of the winning videos

The quality of an advertising product depends on the creativity and for most of these cases the level of virulence, since five out of the six cases used the videos to advertise via social media. To get a clearer image of the quality of the videos, the top three of all cases were rated on vividness and interactivity which are important elements for viral advertising. Furthermore the videos were rated on novelty, meaningfulness and emotional content, which are important elements of creativity.

CBA (“even Apeldoorn bellen”)

#1 ‘First date’ Score Storyline

Vividness 4 A man is stressed for his first date. He is cooking and opens a

bottle of wine, pours a glass and takes a sip against the stress. He sees his date arrive from a window on the first floor. He places his glass in the open window and his date stalls her bicycle under the open window. The draft shuts the window and wine falls down. Then it shows the text: “even Apeldoorn bellen”

interactivity Yes/Website

Novelty 4

Meaningfulness 4

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#2 ‘Smoky’ Score Storyline

Vividness 4 A boy comes home from school and lights a cigarette. His mom

walks in and he hides the cigarette under a pillow on the couch. Luckily the pillow does not get burned. He throws the cigarette in the garden and the wind blows it into the garage. An old newspaper catches fire next to a drum of gasoline and an expensive car. Then it shows the text: “even Apeldoorn bellen”

Novelty 2

Emotional content Entertaining

#3 ‘Peanut butter’ Score Storyline

Vividness 2 A man tries to get the last bit of peanut butter out of a jar. He butters a sandwich with the last peanut butter. He drops the sandwich on the floor and luckily lands with the peanut butter side up. He cheers and in his happiness he rams his arms into the ceiling which comes down on the sandwich. Then it shows the text: “even Apeldoorn bellen”

Novelty 2

Primera (gift vouchers)

#1 ‘I want’ Score Storyline

Vividness 2 Shots of people who say what they want. A book, a magazine, etc.

some do not know what they want. Then it shows the text: “Different people, different desires” “Primera gift vouchers)

interactivity No

Novelty 2

Emotional content informational

#2 ‘give something

that fits’ Score Storyline

Vividness 4 A woman receives a gift in the mail, it is a pair of jeans. She tries

to wear it but it does not fit. Then it shows the text: “give something that fits”

Novelty 3

#3 ‘Gift vouchers’ Score Storyline

Vividness 2 A man comes home with a gift voucher and places it on the kitchen

table. Then there are some examples of gift vouchers. There is a shot of some flowers with the text “flower voucher”, a shot of gaming kids with the text “entertainment voucher” and a shot of a man opening a bottle of wine with the text “wine and dine voucher”.

Novelty 2

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31 TeamAlert (promo video)

#1 ‘Team alert

viral’ Score Storyline

Vividness 5 Men in red total bodysuits do free running in the city. They stop

cars at a cross walk, jump through an open window of a car to fasten a driver’s seatbelt and jump on the back of a scooter to put on a helmet of the rider. Then it shows the text: “TeamAlert the traffic safety organization for and by youth”

Novelty 4

#2 ‘TeamAlert safety on the road’

Score Storyline

Vividness 2 A girl sits on a scooter and her father attaches an orange safety

flag. He makes his daughter wear knee pads, a helmet and an even a life jacket. Than he says ‘have a safe trip’ and she drives of nearly crashing. Than it shows the text: “next time we do it ourselves” (youth).

Novelty 2

Emotional content 3/Entertaining

#3 ‘TeamAllert’ Score Storyline

Vividness 1 A Team of youth guide the traffic at various places wearing orange

safety vests. The whole video triumphing music is playing. Than it shows the text: “TeamAlert together for each other”.

Novelty 1

Emotional content Informational

Eneco (Wind energy) #1 ‘The power of wind’

Vividness 4 A boy uses a leaf blower for everything. He wakes-up his parents

with it, cleans the table after breakfast, uses it as engine on his bicycle and uses it to help his mother dry the laundry. At the end he closes his bedroom door with it. Then it shows the text: “Eneco”.

Novelty 4

#2 ‘Wind Catcher’ Score Storyline

Vividness 3 A boy tries to catch wind with an umbrella and a pillow cover. He

does not succeed so he takes a jar from the kitchen. He catches some wind in it and returns to his bedroom where he opens it and the lights go on for a brief moment. Then you see the boy with a backpack near a windmill where he opens his backpack and pulls out a toy windmill and lets it spin with help of the wind. Then it shows the text: “Together we go for durable, Eneco”.

Novelty 4

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32 #3 ‘The power of

Dutch wind’

Vividness 2 A man is ice skating very poorly with the help of chair. He takes

a break and eats a sandwich. The plastic bag in which the sandwich was wrapped catches the wind and gives him an idea. In the next shot he made a sail from a Dutch flag and sits on the chair while moving forward over the ice. Than it shows the text “Eneco, the power of wind”.

Novelty 2

Greenpeace (on our way to a better world) #1 ‘Children are

the future’ Score Storyline

Vividness 2 A dirty looking man is watching television and laughs. On the

television images are shown of whales and seals being killed and forests being cut down. Then a little boy slaps the man in the face and makes a “do not do that” gesture. Then it shows the text: “children are the future”.

interactivity Yes/facebook

Novelty 4

#2 ‘Think Green’ Score Storyline

Vividness 1 Several images of green landscapes are projected on a woman’s

face. Melancholic music is playing during the entire video. Then it shows the text: “think green”.

Novelty 4

Emotional content Artistic

#3 ’what do we do when all the oil is gone’

Vividness 3 A motor gang sits in a bar and they are all making motor noises

instead of talking. Instead of draft beer, oil is running from the tap and is being served and drunk by the motor gang. Then the oil in the tap is finished and the bikers become angry and start to make angry motor noises towards the bartender. Then it shows the text: “what do we do when the oil is gone”.

Novelty 3

DNVN (no-nonsense insurance)

#1 ‘ice cream?’ Score Storyline

Vividness 2 A girl approaches several people in a snowy park and offers them

an ice cream. People react strangely on the offer and do not really want the ice cream. Then it shows the text: “You would not buy nonsense would you?”

Novelty 4

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33 #2 ‘the insurance

advisor’

Vividness 2 An insurance advisor tries to sell several insurances. He tries to

sell a fire insurance to the fire department, a home insurance to a homeless person and a funeral insurance to children. Than it shows the text: “looking for an insurance that will fill your needs? Denederlandenvannu.nl”.

interactivity Yes/website

Novelty 2

#3 ‘Enjoying pick-up and delivery service’

Vividness 1 A woman sits behind the wheel of a car and calls her car insurance

agency. She tells them her mirrors got stolen, and asks about the pick-up and delivery service. The insurance employee promises someone will come for her car. Then you see that not here side mirrors are stolen but the mirrors in the sun screens and without them she cannot put on any lipstick. Then a voice over states: “de Nederlanden van nu, no-nonsense insurance”.

interactivity Yes/website

Novelty 3

The rating of the top three videos of all the cases shows that there is a difference in quality within the top three. So initiators not only get to choose from high quality videos which suggests that the selection of the right video is of importance. They have to get lucky that one of the videos is of sufficient quality and useful for a video campaign. As is also argued by Boelhouwer from Primera: “it can happen that none of the videos are useful and then you got nothing” (personal communication, July 25, 2012). There is certainly a risk involved and underlines once again the importance of the design elements/characteristics of the competition, since they affect the number and quality of videos.

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element CBA Primera TeamAlert Eneco Greenpeace DNVN

Vividness 4 2 5 4 2 2

interactivity Yes/Website No No No Yes/facebook No

Novelty 4 2 4 4 4 4

Meaningfulness 4 5 4 2 3 2

Emotional content Entertaining informational Entertaining Entertaining Entertaining Entertaining

Table 5 Cross-case analysis winning videos

4.4 Seeding strategies

The influence of seeding strategies was assessed, since the manner the videos were spread was identified as a possible reason for failure. While the concept of advertising via social media is very new, firms still struggle with how to exploit it. Dijkstra from DNVN, Ravenek from Eneco and Dol from Greenpeace argue that the spreading of the videos could have gone better. Ravenek stated, “Because of the strong rules and regulations concerning the outgoing statements at Eneco, we wanted to do the distribution of the videos ourselves. However Eneco is not very familiar yet with the inner workings of social media and therefore should have considered to ask BF for help with the spreading of the videos” (Personal communication, August 23, 2012).

None of the unsuccessful firms considered a seeding strategy and all lacked knowledge about how to spread the videos effectively. As is stated by Dol from Greenpeace, “we were not sure how we could spread the videos and what kind of possibilities we had. We could have done more with the videos” (personal communication, August 25, 2012). Both Greenpeace and Eneco decided to spread the winning videos through their own online community. DNVN used their fan page on Facebook for the spreading of the videos.

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35 click. However DNVN do not have a large fan base (262 users3_{), which probably had a negative effect}

on the virulence of the videos. The probability that the DNVN had a sufficient amount of hubs and bridges within their sub network is not likely with such a small fan base.

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36

5 Conclusion and discussion

This research investigated how idea competitions can be utilised to obtain a successful viral video campaign. This exploratory case study has assumed that the success of such an idea competition is determined by the number and quality of the videos obtained and the extent to which they spread (go viral).

For the creation stage the results indicate that brand strength is an important element affecting the number of submissions but can be overcome by weaker brands by offering higher monetary incentives. The willingness to participate in these kind competitions can also be influenced by the product and firm attractiveness. The analysis of the cases suggest that some type firms are more attractive than others and this affects the willingness to participate. Furthermore the results indicate that non-monetary incentives like exposure to a very large audience can attract more participants and pushes them to invest more in their projects which can result in higher quality videos. With exposure to a very large audience, participants can increase their status and display their skills and abilities. They can use the platform as a showcase for their work which can result job opportunities.

The quality/virulence of the videos is partly determined by the need specificity of the initiators. The results indicate that a high need specificity can have a negative effect on the creativity and virulence of the videos and can result in lower quality videos.

The analysis of the top three videos of all the cases indicates that there is variety in quality within the top three. This suggests that the selection of the video used for the campaign is important and that there is a chance that none of the videos are of sufficient quality. This underlines the importance of the design elements/characteristics of the competition, since they affect the number and quality of videos. The cross case analysis of the winning videos suggest that vividness, novelty and meaningfulness are important elements of success for viral videos. A balance between these elements seems to be important, a viral video is only as good as its weakest element. It indicates further that viral videos should be entertaining rather than informational or artistic. Informational videos can be used for non-viral campaigns and the analysis indicates that the element meaningfulness becomes more important and the element novelty less. So it seems that the importance of each element can change with a different type of goal (i.e. online viral, TV etc.).

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5.1 Theoretical implications

This study performed an in-depth analysis into the use of idea competitions for generating online viral video commercials. Whereas recent idea competition studies focus on innovation and mostly involve the generation of new concepts (Bodreau, et al. 2011; Piller & Walcher, 2006; Terwiesch & Xu, 2008; Walter & Back, 2011), this study focusses on the creation of entire advertising products. When the results of this study are compared with the existing idea competition literature there is certainly some overlap. Brand strength, need specificity and monetary incentives seem to have the same influences on the results of idea competition competitions for generating online viral video commercials (Walter & Back, 2011; Terwiesch & Xu, 2008). The design elements and characteristics of the competition even seem to be more important because it involves end products and in that sense it differs from innovation idea competitions where mostly concepts are developed. The latter type allows initiators to further (co)develop the concept into an end product and allows more control over the process in this way. So the design elements and characteristics seem to be more important in idea competitions for generating viral video commercials because it has to be right the first time.

Additionally, this study has identified that major exposure of the work of participants (e.g. via TV), can be a significant non-monetary incentive for participants and can lead more submissions and a higher quality output. Furthermore a firm’s attractiveness can also influence the willingness to participate. These elements have not been considered in existing (innovation) idea competition literature but seem to have an effect on the number and quality of submissions.

The design of the idea competition and the creative output of this process does not guarantee success. The seeding strategy is also an important element of the success of idea competitions for generating online viral video commercials. This study suggests that a competition with good results not necessarily means success. The study agrees with the seeding strategy literature that seeding to the right people and network can make a difference (Hinz et al., 2011).

5.2 Managerial implications

This study has raised several managerial implications for both initiators and platforms concerning organizing idea competitions for generating online viral video commercials.

5.2.1 Initiators