Crowdsourcing: Opportunity or Time Suck? As the trend continues to gain momentum, some entrepreneurial freelancers have learned to stand out.

Like most successful freelancers, Brett Slater of Slater's Garage Ads & Audio earns a majority of his income from clients who hire him outright, agree on a contract, and compensate him for all his work on their projects. But roughly 15 to 20 percent of the audio and video producer's income is generated from an unlikely source: crowdsourcing websites and contests.

"I started doing video as a hobby," says Slater, a longtime radio man who added video production to his freelance repertoire in 2007. "I got hooked on YouTube and started looking at the video contests for fun. And they started paying off."

We're not talking chump change. In 2008, Slater took the $20,000 grand prize in a contest sponsored by the Maine Association of Realtors (see video) and the $15,000 grand prize in a contest held by Honda (see video). The time he spent creating each short video? The better part of a weekend.

"Those two were my crown jewels," says Slater, who also made five figures in video contest prizes in 2009.

But before you go scouring video contest sites like Vidopp and MOFILM or crowdsourcing (outsourcing of traditional employee tasks to a large group in the form of an open call) sites like 99designs, LogoTournament and GeniusRocket for your own freelancing pot of gold, know that not all contest-chasing creatives make out like Slater.

The Cattle Call Factor
Five-figure awards are the exception, not the rule. Prizes on crowdsourcing sites often range from a couple hundred to a couple thousand dollars.

There's also the cattle call factor to consider. With so many creatives competing per contest, odds are slim that you'll be the one to bring home the crowdsourcing bacon.

"Since you don't know what the client's tastes are, it's like finding a needle in a haystack," says Heather Knox from Madison, Wis., who works as an art director for a corporate webcasting company and has entered a couple dozen design contests in her spare time since 2009. (She won one, earning $1,000.) "It's such an unknown whether it's going to pay off."

Take the site crowdSPRING, a contest site for designers, illustrators and copywriters that launched in May 2008. To date, the site has awarded more than 3,250 winners a total of nearly $4 million for approximately 10,000 crowdsourced projects. But 57,000 creatives from more than 170 countries vie for prize money on crowdSPRING, with each contest receiving an average of 115 entries. That means more than 50,000 creatives using the site have never seen a dime for their efforts.

Why would any self-respecting writer, designer or multimedia producer give away their valuable ideas and time without any guarantee of payment? Back in Freelancing 101, we all learned that aside from intentional pro bono projects, working for a client on spec with no promise of getting hired or paid is not only financially unsound but utterly foolish, right?

Wrong, say crowdsourcing devotees. For many of these creatives, money isn't the only motivator.

The Ultimate Equalizer?
"The benefit is definitely the low barrier to entry and the level playing field," says Collis Ta'eed, co-founder of FreelanceSwitch, one of the web's leading freelancing communities. "You can be a professional, self-taught, experienced, novice, from a wealthy country or from one where earning just a few dollars goes a long way."

As a result, many students, moonlighters and rookie freelancers use these contests to hone their skills and build their portfolios.

"The price doesn't drive me at all," says Knox, who views the design contests she enters as a way to scratch her creative itch during free evenings and weekends. "I do it more for the inspiration. When I was in advertising, I created logos every week. I can't get that with my job now."

For Slater, who lives in a small, remote town, crowdsourcing sites cut through geographic obstacles. "I live in Bangor, Maine. My work wouldn't have been seen otherwise," explains the video producer, who's landed projects in large markets throughout the United States and as far away as Australia, thanks to the crowdsourcing contests he's entered.

Anna Nadler, a freelance illustrator and designer in Staten Island, N.Y., also relishes the convenience of these sites. "It's not always easy to leave my house to go to a networking party or to knock on some businesses' doors hoping they will take a look at my portfolio," says Nadler, who left the 9-to-5 world to freelance from home when her son was born two years ago.

Since February 2009, Nadler has made 75 percent of her income through crowdsourcing sites, entering up to 20 contests a month and earning $200 to $1,000 per win. The other 25 percent of her income comes from clients she works with directly.

"I win, on average, three to four contests a month, sometimes more, sometimes less," explains Nadler, who spends two to four hours on each winning design, including any revisions requested by the client. "Many of those buyers go on to hire me for follow-up projects, which is a really nice bonus."

What Crowdsourcing Doesn't Offer
The financial crapshoot isn't the only downside of trying to patch together a paycheck from crowdsourcing opportunities. Intellectual property rights can be a concern, too. While some sites let contestant entrants retain ownership of their work, many contests seize the copyrights of all submissions, meaning that entrants must forfeit ownership of the content they create, even if they don't win.

"That's something I really don't agree with," Slater says. "If that's in the fine print, I won't enter the contest."

Seasoned creatives also warn that budding freelancers who rely too heavily on these sites and contests miss out on several integral steps of building a service-based business: from marketing themselves to building rapport with clients to honing their negotiation skills.

"The thing about design and writing and any of these creative services is that it's about the conversation you have with these prospects," says freelance marketing guru Ilise Benun, who runs the Creative Freelancer Conference, an annual business development event for self-employed professionals.

"With these contests, you don't have a chance to do that," Benun says. "There's so much more people could be doing to get better work. I think it's a combination of laziness and not wanting to put the time and money into figuring out where to find the real projects. Because they are out there. People are making real money."

Love it or hate it, crowdsourcing appears to be here to stay. New sites and contests crop up like weeds these days, with household brands from Doritos to Heinz Ketchup cashing in on this cheap alternative to hiring a creative agency. But veteran creatives don't sound overly worried that crowdsourcing will lead to the demise of the traditional freelancer-client relationship.

"There will always be clients who want custom work, who want to meet and talk to a freelancer and who want a back-and-forth relationship," Ta'eed says.

Benun agrees. "I really don't know anyone who is losing work because of crowdsourcing," she says. "Those are not our prospects."

Michelle Goodman is a freelance writer and author of My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire.