Everyone’s talking about crowdsourcing, and when everyone talks about it, everyone else thinks they need to do it. The only problem is most people don’t know how. In fact, I’ve found that most people don’t even know what crowdsourcing is.

Crowdsourcing is a term coined by Jeff Howe in a Wired article way back in June 2006:

“Remember outsourcing? Sending jobs to India and China is so 2003. The new pool of cheap labor: everyday people using their spare cycles to create content, solve problems, even do corporate R & D.”

Crowdsourcing was given a name three years ago, but the idea is just recently taking hold. This past week, Victors and Spoils launched claiming to be the first advertising agency based completely on crowdsourcing.

You would think this would be a big step forward. I would have to disagree. At least at the initial startup stage, I’m having a hard time seeing the big difference, never mind the benefit.

In my mind, there is one tried and true idea that people tend to confuse with crowdsoucing: competitions. This confusion spreads the gamut from small local businesses to international agencies.

Take Victors and Spoils for example. Their first act as a crowdsourcing agency is to “crowdsource their logo.” By this, they mean they issued a creative brief and called on the crowd to submit logos. The winner will receive $1000. Sounds a lot like an old-fashioned competition, doesn’t it?

Doritos did the same things with a competition for a Super Bowl commercial. It was a huge success, but as a competition, not crowdsourcing. And that’s my hang-up. When does a competition suddenly become crowdsourcing? Are we just putting a fresh name on an old idea?

But that’s what crowdsourcing is not. Tomorrow, my post will try to answer the first question I posed: what is crowdsourcing. A hint – to me, the big difference between crowdsoucing and competition is another C word … collaboration.