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OMD Sense. The growing trend of communities running brands

OMD Sense. The growing trend of communities running brands

By Ben Haley, Insight Manager OMD

“I want to work for a company that contributes to and is part of the community. I want something not just to invest in. I want something to believe in.” Anita Roddick, founder, The Body Shop.

With a history that stretches back at least as far as the creation of building societies in the last 18th century, local communities have long been involved in the co-operative running of businesses.

However, with the deregulation of building societies in the late 1980s, and subsequent demutualisation and/or merger of many societies, local communities had less
collaborative involvement in business than before.

As it has done in so many areas, the internet has changed the landscape again, allowing communities to take control, regardless of geographical barriers.

We’ve noticed an increase in community-funded and organised business, using the
internet to bring together like-minded people, with the aim of each of them having
elements of input and control. We’re calling this trend “Community Control”.

One aspect of this trend has already been identified as “Crowdfunding”, the collective funding of a business enterprise. The term is derived from “Crowdsourcing”, whereby organisations outsource projects to the public, in return for prizes, payment or merely kudos.

Another example of crowdsourcing, and to a certain extent, crowdfunding, is online radio station grew through the wisdom of the crowds, or what could be called ‘peers-to-peer’
recommendations. Its community doesn’t have any economic control, but, through tagging and recommending artists and tracks, it collectively influences what its listeners hear.

We’ve recently seen Walkers Crisps invite consumers to design a new flavour. Not only does this winner get £50,000, but also 1% of future profits. There were over one million entries.

Although asking crisp eaters to dream up new flavours is interesting, it’s more notable for the fact that Walkers are prepared to bequeath part of their profits to the winner.

In other areas, consumers are even more involved. Nvohk is a California-based eco-clothing company.

For a stake of $50 interested parties can become members. This entitles them to hefty discounts on the clothing, a share in the profits, and the satisfaction of knowing that 10% of the profits are going to charitable causes.

What’s more, the charitable causes are chosen by Nvohk’s members. Forty per cent of whom come from outside the US, illustrating that community control no longer
needs to be localised.

BeerBankroll has been launched in Chicago, along similar lines. Also charging $50, BeerBankroll are offering a chance to run your own brewery, albeit it by consensus with the other members.

Their profit will be equally split three ways between members, charities and reinvestment into the business.

One catch with both these models is that members’ profits are paid in points. Points that can be used to buy the company’s products, but it’s unclear what else, if anything.

At least you might be able to lavish your friends and family with ethical clothing and inexpensive alcohol.

Back home in the UK, My Football Club was set up in 2007, with the intention of raising enough capital to buy a football team. The capital was raised among football fans over the internet.

Each paid £35. Nine clubs offered themselves for sale, before Ebbsfleet United, a Kent-based team, were chosen. Members decide how the club is run, right down to selecting the team that takes to the field.

With a little less help from the internet, but also good examples of community control, FC United of Manchester and AFC Wimbledon were set up in response to fans’ feelings that they were becoming disenfranchised from the clubs they supported (Manchester United and Wimbledon, who became Milton Keynes Don).

Both clubs are owned by the members, with each member getting one vote, no matter how large or small their investment.

Where will this go next? Brands seem more intent than ever in evolving consumers into collaborators.

You can visit Nike iD and design your own sportswear, or visit and
create a video for your favourite Radiohead track. These are examples of individual consumer involvement; which brands will go a step further by involving communities in decision-making?

Could businesses go one further than Walkers by launching sub-brands that offer more control to consumers for a small stake? It’s probably more likely that we’ll see more start-ups of the nature of Nvohk and BeerBankroll.

Over 30% of the people we asked said they’d be interested in investing up to £50 of their own money into a project like this1. Even in the current climate, with
near ubiquitous negative perception of banks, it’s highly unlikely we’ll see any new building societies.

However, there’s potential in smaller projects that don’t require as much investment of
capital, for example, food production, niche manufacturing and entertainment and leisure.

The desire from consumers is apparent too. When asked if they’d be more or less likely to buy from a community company (as opposed to privately, shareholder or state owned), 36% said they’d be more likely. Only two per cent were less likely.

The most likely were the affluent upmarket older audience. How much do big, non-collaborative brands have to fear? Today, probably not much, but in the
next few years, who knows? We think it’s going to be interesting finding out and important to keep an eye on.

(1&2 source: OMD Snapshots, 708 UK adults).

Ben Haley
Insight Manager OMD
OMD – Campaign’s Media Network of the Year, 2008
Direct: +44 (0)20 74705482
Mobile: +44 (0)7798 630564

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