Promote a Product by Giving It Away (from wired.com)

March 14, 2008

Three digital business models are that could change the online world of advertising. A three digital scheme is essentially free to do whatever it wants. It can charge prices to one side and the other side in whichever proportion, whichever ratio it estimates fit. Three possibility digital models are Advertiser-Supported Advertising, Advertiser-Subsidized Devices, and Just-in-Time Advertising. I think these three digital business models will take hold over the next four to five years.

I like the idea of Advertiser-Supported Advertising. If we look at online industry, it’s been already existed. Most of the companies are increasingly launching their own content platforms. For an example Budweiser, they have launched BudTV. I think till now the most effective Advertise-supported advertising is Google’sAd by Google”.

In addition, is consumer loves advertising? MSN ad shows the relationship between the advertiser and the consumer:

This ad is very nicely done all around with a solid script and casting. This video not only just talked about advertising executives but also shows wider audiences of marketing manager. I think in this video shows on three thing such as support, complain, and to offer suggestion or express thankfulness. At the end, it is an indication that consumers are becoming more demanding.

Customers are very intense in competitive business environment. A customer has always options to switch to competitors that offer lower prices or better offers to gain market share. Check this article details on how to attract and keep customer: IBM New Digital Media Solutions Answer Challenge to Attract Customers, Increase Sales. I think every business have to be creative (i.e, R&D department) and come out something new and attractive to keep customer. So to survive such in competitive environment, a company has to come out with a tangible difference to its customers. Now days most of the organizations are accomplish their goal by introducing information and software technology (STR) at the center of their creative process.

Finally, is “free” a business model or a tactic? Josh Kopelman of Redeye VC notes the penny gap. Fred Wilson has written on In Defense of Free in 2005: “free is a great way to make money. You just have to know how you are going to get paid for being free.” The fundamental idea of every business has always remained same: create something of value for people who will pay for it. So there is nothing free it’s just a business tactic. Free business model depend on additional services beyond the core offering. If we look at the Last.fm, it’s actually encouraging for paid subscribers with better internet radio. Same idea goes with Skype where internet calls are free but you have to pay for landline connection. Now the best way to generate money is Web 2.0 economy.

So, after the internet evolution, do you think “free” is still a business model?

–Romiz

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