Thursday, October 15, 2009
"Free For All, Profit For Some"
"Free search engines. Free shipping. Free e-mail."
Anthony Mason, Sunday Morning; CBSNews.
After watching journalist Anthony Mason's report for Sunday Morning, CBSnews, "Free For All, Profit For Some" he revealed how giving things away for free is currently becoming a major marketing tactic for businesses today. Wired Magazine editor Chris Anderson quoted "Businesses will profit by giving things away". He also added that "digital stuff costs so little to make and reproduce" so companies wont lose any profit by going down this route.
Free is not new, it has always been a marketing strategy for many businesses for decades but things have gotten a little more advanced. Some businesses are now giving consumers actual size products not just simple samples. For an example of free being done the right way in the digital world, for instance look at YouTube its free and they have over 85 million viewers per month.
Although YouTube is free do not miss the fact that it is still a business and is owned by Google.
"It does provide a huge archive of searchable videos to its parent company, Google, which made $4 billion in profits last year by offering free searches subsided by highly-targeted advertising. You search for plants, you get ads for landscaping".
-Sarah Rothman Epps of Forrester Research
The Wall Street Journal has also been successful with this free strategy. As we all know the newspaper industry has been failing. The Journal started putting some sample articles online for free to attract new readers and it worked. "The Journal now has more than 1 million online subscribers who pay $100 a year to access its core financial news, information many need for their work". However the more popular articles they put them behind a "pay wall".
However there are some negatives with giving things away for an example the New York Times offered free website which featured one of their most popular columnist Maureen Dowd however she was behind a "pay wall" (A Pay Wall blocks access to a webpage with a window requiring payment. Web sites that use them include some owned by periodical publications. wikipedia.com) which failed because readers did not want to pay.
The Times had to refocus there strategy and went back to free. However the NYTimes is till struggling tremendously and so are other publications both online and print. So free is not always the way to go but it gets the ball rolling because most consumers may not return or they may take advantage.
"Not every company can be Google", said Wired's Chris Anderson.
