Los Angeles Business Journal

Ad Maker Turns To Crowdsourcing

ADVERTISING: Tongal takes on traditional agency model. By Tom Dotan Monday, November 11, 2013
James DeJulio at Tongal.

James DeJulio at Tongal. Photo by Ringo Chiu.

Most videos – ads or otherwise – do not go viral. For a brand that wants to spread its name through online videos, that presents a problem: Why pay millions for a campaign that stands a good chance of being skipped, blocked or in any other way ignored?

Tongal Inc. offers up a solution: don’t pay millions.

Instead, the Santa Monica company can crowdsource ideas for advertisements from its online community of directors, writers and other creative types, who can quickly produce a spot for a fraction of the cost of an ad agency.

While the results tend to fall short of the production values created by a top agency, the often-quirky, Internet-friendly spots have attracted names such as Procter & Gamble Co. and Lego Group. They’ve also managed to rankle some veterans from the advertising world.

This has been a productive year for Tongal – one that saw its community produce more than 200 spots, including one for Speed Stick that aired during the Super Bowl. Executives estimate next years’ output could more than double.

Its recipe layers the Hollywood development system over Madison Avenue-style branding, with a sprinkling of social media.

Typically, an advertiser will come to the site with a request for a spot and the themes it hopes to hit. An open call then goes out to Tongal’s community, some 50,000 people who have registered on its website, for ideas to be submitted in Twitter-style 140-character proposals. On average, 500 pitches come in for each competition.

The value comes in volume, explained James DeJulio, Tongal’s co-founder and chief executive. That’s especially true given that many ideas are, admittedly, not worth more than the time it takes to read the pitch.

“If you spread them out, you can throw away 200,” he said. “Then 200 are down-the-middle expected. And the rest are worth thinking about.”

Those who submit winning ideas are awarded a cash prize, generally about $500, and the advertisers own those concepts outright.

A handful of favorites are chosen by the client and are in turn sent to Tongal’s subset of directors and writers, who submit treatments for consideration. Advertisers then select winning pitches and creators are given a budget, with many choosing to add out-of-pocket money to realize their vision for the spot. (A creator/competitor might find that an additional investment is a calculated risk that it could place higher in the competition and bring home a bigger prize.) A recent competition for Gillette, for instance, had a $150,000 budget. From that, three finalists were given $20,000 each to produce a spot. The winning team was awarded $40,000 for its work; the second- and third-place teams received $30,000 and $20,000, respectively. Tongal’s revenue comes from charging the brands to access its community either on a recurring basis or for a one-shot deal.

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