May 20, 2016
How companies make money by giving away things for free
Everyone loves free stuff. The Marketing people know this, and offer a lot of things for free.
As an old Marketing guy myself, whenever I see things described as free, I look to see where the charge really is. And it's all about hiding the charge while proclaiming the world "free" as loudly as possible.
The best example of things that are free are things that are financed with advertising. This blog platform, by the way, is free from Google. They make their money from advertising. I can choose to turn off the ads here, but I can't on cell phones or tablets. Nor do I really want to. I like getting this for free, and I understand that it's the ads that make it possible. Sure, a percentage of people block the ads, but enough people respond to make them earn Google a TON of money. And as a web creator, Google throws me a few pennies a month (and I mean pennies!). Luckily, writing blogs isn't how I earn my living, drawing cartoons is.
As a Graphic Designer, my job was to design brochures, ads, and that sort of thing to be as attractive as possible. I didn't write them. But being exposed to what the Marketing people did gave me a pretty good idea of what they had in mind. I designed a lot of newsletters, which were free. Of course brochures (we called them "take ones") are free.
Most content on the internet is free. And that means paid for by advertising. Lately I noticed that YouTube is offering a way to subscribe to the service and therefore eliminate the ads that you have to skip over. But of course why would anyone pay for something if they could get it for free?
Every once in a while I listen to the radio in my car. Yes, it's free, but I am reminded of the cost when the commercials start, and go on and on. The cost is the annoyance of having to listen to commercials, most of which repeat so much that even listening to the radio a little bit causes them to be painfully repetitive.
The solution to this barrage of ads is to subscribe to things. I have friends who have subscription radio. I have Netflix, which has spoiled me from watching commercial stations like Crackle. But there are a lot of things that I would prefer to get for free, like Facebook. I mean, who would pay a subscription to Facebook in order to not see ads? And, believe me, the money isn't in subscriptions, it's in advertising. If Facebook woke up tomorrow and decided to charge everyone $10 a month for their Facebook page, they would lose money. A LOT of money.
So, it's OK to accept free stuff from companies. Just as long as you know how you're paying for it.
Posted by Brad Hall