Preposterous Marketing

Following on from my earlier post, Room Service? Send Up A Larger Room, more on Preposterous Marketing - and Preposterous Consumption. Companies are giving it away and consumers are giving something for nothing. And everyone's happy. It's a mad world indeed.


Companies are giving it away

Radiohead did it last year with their pay-as-much-or-little-as-you-like album Rainbows. Paulo Coelho is doing it with his Pirate Coelho website, linking to free pirate versions of his own books. Many newspapers have been available for free online for some time.

CBS has just uploaded the entire original series of Star Trek, which can be viewed for free on its Audience Network. The network's new strategy is to encourage viewers to upload CBS clips to their blogs and profiles. To help them, the company has already brokered deals with a host of Web 2.0 companies, including social network Bebo, Joost Internet TV, slideshow creator Slide, which allows you to create personalised frames round YouTube videos and widget providers like Clearspring and Goowy Media. Instead of swimming against the tide, CBS is joining the shoal of file sharers.

Virgin's Delight rewards programme in Australia gave loyal customers an unexpected, no-strings-attached thank you, such as magazine subscriptions or tickets to music festivals.

This week's Wired article talks about a system of 'freeconomics' being driven by the technologies powering the Web, which are halving in price at least every 18 months, as Moore's Law predicts. When businesses move from human economics, which typically inflate costs year by year, to software economics, which have the opposite effect, this allows companies to offer things for next to nothing.

So, for example, the low cost of digital distribution will eventually make movies free, while theaters make money from concessions and selling premium experiences. Hoyts in Australia are already offering corporate packages and La Premiere exclusive cinema lounges where wine and food are served.

From a consumer's perspective, The New York Times recently observed that the work hours people need to put in to acquire technology has diminished substantially, for example the work time for a cellphone was 456 hours in 1984, compared to just 4 hours today.

Apart from relying on technology, some free business models are ad supported, while some use a tiered system, with the majority of the service free and some premium offerings. For example, volume 1 of Nine Inch Nail's 4-volume Ghosts album is available free on BitTorrent sites, the whole compendium can be downloaded for $US5 on the band's official website, while CD boxed sets and a limited edition deluxe version go for $10 and $75, respectively. You can even knock yourself out with the ultra-deluxe $300 package.

Some models rely on user collaboration to create value, e.g. Google's 411 directory service assistant, while others write off giveaways, as a way to offer great customer service and recoup goodwill, e.g. Amazon's free delivery.


Consumers are giving something for nothing, sort of

They're offsetting their carbon footprints with the help of airlines like Virgin Blue that help customers pay for the privilege of carbon neutral travel. Apart from a desire to save the planet and a modicum of guilt, it seems likely that consumers' willingness to part with extra cash is partly due to the falling cost of air travel, thanks to technological developments, enabling people to travel more and to feel they have cash to spare.

An initiative by The Good Project invites people to buy a house and give one free (Springwise). By buying an eco-friendly home, people automatically house families in Africa's Burkina Faso. The Good Project enables this by funding the training of an African builder for every house they sell.

By playing an online word game - and at the same time viewing a few ads - consumers are donating rice to starving people through the UN's Free Rice initiative.


Preposterous - and Good

The most preposterous thing, on the face of it, is that this new philanthropy in marketing is often ostensibly just that, philanthropic. It's not based on recouping the cost of the giveaway somewhere else - at least not in an underhand, or forced way. But, these strategies do manage to be commercial. This is because companies gain in goodwill, which is showered upon them in sales. Radiohead got next to nothing for Rainbows, but got extra sales of their Discbox, while Coelho's hardcopy book sales have soared.

Rewarded consumers say thanks for the freebie, thanks for not judging me as a freeloader, thanks for understanding that times have changed and well, you should get some things for free these file sharing, collaborative, digital days and, occasionally, I'll even give something for nothing, if you make it easy enough. And they buy more goods, particularly given the degree of loyalty to online vendors.

The old adage was, Sex Sells. The new one is Goodness Gives - to both seller, customer and beneficiaries. The former was a one way street. The new model is symbiotic.