Is Free Media Good for Your Brand?


In a recent global consumer survey, 8 of 10 consumers told Nielsen that they would stop using a website if it begins charging for content (disclosure: I work at Nielsen). Most consumers believe they can get the content they want for free—so why pay? Is free content good for Marketers—or not?  

Is Free Media Good for Your Brand?

 

Will All Digital Content be Free?  

The death knell for paid media content is everywhere– web-based content and services are moving toward “free.” Chris Anderson wrote about it eloquently in his book “Free,” arguing that consumers have become conditioned to free stuff, and that the future of the web is free, free and more free. 

Of course, consumers expect “free” content based on linear TV, which was free of everything except commercials long before the web arrived. 

Yet, cable TV has made in-roads into the traditional “free” TV space, consumers pay for content on iTunes, and the last time I checked, people were still going to see movies. So, while free is in our future, and there’s certainly a lot of it on-line (including this blog), whether all digital content will be free is  uncertain. 

Free vs. Paid Content: Uncertainty for TV & Digital

 

 What Consumers Really Want   

Let’s go back to the Nielsen study above. What consumers were really saying is that they don’t want to pay for a site because they can get the same content for free elsewhere. Consumers have and will continue to pay for content under one of two conditions:  

  • If they have to. That is, they can only get the content from a web site or distribution channel that charges for it—and not for free somewhere else.
  • If the quality is worth it and there’s no good substitute. If I can only watch the NY Giants for a fee, and I’m a big fan, there’s no other option.

And let’s not forget the other 20%. That is, 20% of the surveyed people were willing to pay to access a web site. So, even in today’s digital world where much quality content isn’t walled off in a paid “garden,” 1 in 5 people are still willing to pay for it.  

  

Too Much Content — An Economic Issue 

The challenge is this: the web has democratized content creation, and this in turn has created massively more content, which has driven down ad prices. And, with lower ad prices, advertising alone won’t support some web sites. These sites don’t have a viable business model without charging for content. 

Content quality and distribution will differentiate free versus paid models. Higher quality content, or content with limited distribution, will generate revenue thru consumer fees. Lower quality content and/or content that is distributed broad-scale will be free. 

3 Trends Marketers Should Watch For 

1.  The digital media eco-system will continue to fragment. This means that web sites will increasingly fragment into free, paid and hybrid models. This is already happening. Some sites, like Yahoo News, are completely free. Others, such as Angie’s List, make you pay. And still others, like Consumer Reports, will charge for some, but not all, content.  

Paid Content: Angie's List

 

This fragmentation will make media planning more complex and challenging. Ad inventories—particularly on the paid side—will change and this will impact media costs. Building broad reach quickly via digital will continue to be a challenge, but targeting opportunities will increase. 

2.  Advertising performance will differ by model. As the quality gap widens, advertisers will need to understand how quality of content, and consumers willingness to pay for it, impacts ad effectiveness. Does higher quality paid for content increase consumer engagement and ad performance? Does the increased ad clutter associated with free models reduce ad performance? These are important questions that Marketers will need to answer. 

3.  Advertising forms will continue to evolve. At one extreme, paid for content may have no traditional advertising at all, but may increasingly rely on product placements and hybrid ads that appear to be part of the show. The line between advertising and content will continue to blur. On the other extreme will be free content that continues to have a relatively high traditional advertising load. Viewers will be less attentive due to commercial pod interruptions, ads will compete with other ads, and ad breakthrough will be more challenged.  

Traditional TV Advertising: Continuing to Evolve

 

Paid or Free – Too Soon To Call  

Whether digital content moves inexorably toward free or paid, or some combination of the two (most likely in my opinion), Marketers will need to be increasingly adept at advertising models that work best in each environment. 

Every B-School grad learns the 80/20 rule. The question is how it applies to the paid/free media model world. Will the 20% of consumers who are willing to pay for content deliver 80% of the impact to advertisers? Or vice versa? The only thing that’s certain is this:  you can check back here soon to learn more – for free. 

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2 Responses to Is Free Media Good for Your Brand?

  1. Jenni says:

    I thought it was interesting that the Evening Standard, a London Newspaper, only became profitable after it became free (rather than charging 50p). The additional reach gained by dropping the nominal barrier to entry more than compensated for lost revenue.
    AOL tried to set up a walled garden as well. That didn’t work.
    So history tells us that the free content, advertiser pays model works best, and that you have to have something special to justify a cost-per-usage. And most (regrettably) don’t.

    • beardrs says:

      Jenni — Thanks for the comment. Can you think of any examples where consumers are willing paying for content and the business model is thriving ? If so, what do you think differentiates these examples (if any) from other failed ones ? I agree with you that free works best, but do believe that if content is good enough, there are people willing to part with their money. Randall

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