Seven Strategies to Profit from "Free" - Jim Louderback - MediaBizBlogger

It39s not like quotfreequot is this brand new thing created by the internet And for all the handwringing going on about how free is decimating media business models there are clear precedents for building free businesses You just have to think beyond massWay before there was a longtail smart media execs were building hugely profitable free businesses I should know I got my start working for one called PC Week Hardly an anomaly in the business PC Week was one of many free magazines available to industry professionals a category called quotcontrolled circulationquotAs opposed to magazines that people actually pay for these publications are available to subscribers who meet relatively stringent standards amp8211 ie controlled for that audience When I first qualified for a free subscription I had to work at a company with 100 or more people and be responsible for buying recommending or supporting five or more personal computersOver the years the requirements tightened but the magazine remained free It still is today although it has been renamed eWeek 400000 people receive the magazine each week and none of them pay a dime for itThere are hundreds of controlled circulation magazines in the US and they provide news product reviews information and much more to millions of mostly business readers each monthToday39s freechallenged media companies can learn a lot from the heyday of the controlled circulation business Even in an age of abundance there39s a lot of money to be made in free amp8211 but it39s not a mass play Here are seven things I learned from the first quotfreequot media company I ever worked at1 Aggregate Valuable Audiences In our heyday we were selling fullpage advertisements for CPMs in excess of 200 Why Because the stringent qualification requirements meant that each of those 250000 readers controlled a large budget and had big influence over what computer products were purchased Advertisers were guaranteed to get their message in front of their targets and only their targetsLessons for Today Building mass media products designed to appeal to a nondifferentiated audience today You39ll have trouble with free But if you can build media products that appeal to a valuable subset one that advertisers will pay big bucks to reach then you have a shot at a profitable business2 Content Adjacency Matters Although we would occasionally try to bring in nonendemic advertisers PC Week was about corporate computing technology and almost every advertiser we had built computing hardware software or servicesLesson for Today Your most likely revenue targets are those companies that produce products and services that relate directly to whatever you39re covering When someone is reading watching or learning about a particular topic they are far more receptive to advertising that relates to that same topic3 Speak Softly and Build a Big Database In exchange forreceiving something of great value for free we required subscribers to answer a long list of questions about who they were what they purchased and where they worked Forget behavioral targeting at PC Week we knew all about our audience and we knew it was true for the most part because they told us so directly We didn39t have to infer their intention by spying on their browsing behavior That database then because a source of additional revenue we mined it to create highervalue services like seminars and addon products targeted even more narrowly and capable of delivering thousand dollar CPMsLesson for Today Let your audience know that you are giving them something valuable and then get them to give you something in return personal demographic data Build your database and then use it to create additional targeted products to generate even more money4 Useful Advertising In survey after survey our readers would always tell us that they found the advertisements as useful as the news stories product reviews and opinion columns inside the magazine The best advertisements were those that provided detailed product benefits specifications and success stories And our readers loved themLesson for Today Split second banners and overlays won39t be as effective as deep rich marketing and branding messages integrated into your content5 Consultative Selling Our sales reps were often derided as quotStepford Repsquot because they all had the same approach and patter But surprise surprise those Stepford Reps are now among the most successful new media execs their ranks include MySpace39s Owen Van Natta Tim Castelli and Suzie Rider of GoogleYouTube former Yahoo COO and current Guitar Hero CEO Dan Rosensweig CBS Interactive chief Joe Gillespie Huffington Post CEO Eric Hippeau and many many more What sets them apart They weren39t just order takers they considered themselves consultants with a mission to help companies reach their business goals first before selling them anything That meant being more knowledgeable about their company than even most of the internal employees and working with the quotclientsquot not quotcustomersquot to craft the right messaging and adopting a winwin strategyLesson for Today Don39t just sell from a menu of ad units Really try to understand a company39s approach prospects and customers and craft custom proposals to help those companies be successful Adopt creative approaches and do your homework6 Create a sense of Exclusivity At PC Week we had a rumor column on the back page that in its heyday rivaled anything Valleywag ever uncovered Written by the mysterious quotSpencer F Kattquot the column the mystery and the insight created a clubby insider sheen across everything we did That aura of exclusivity was enhanced by the regular quotKattquot parties held annually at all the top industry conferences Only sources and tipsters were allowed inside and the parties were routinely packed to the gills with industry luminaries including Bill Gates Eric Schmidt Scott McNeely and many othersLesson for Today Create an inner circle of your biggest fans Invite them to special meetups give them VIP access when you can create special shirts or even a custom newsletter or inviteonly Facebook group Give free membership to a small core group and charge everyone else who wants in7 Community Matters This should be no surprise today but even before the internet we had a superstrong community at PC Week Our CompuServe boards were full of readers and reporters we had big booths at all the major technology trade shows where we encouraged our readers to come hang out and we really tried to foster a sense in every story of belonging to a smart and exclusive community that was changing the worldLesson for Today Community sits at the center of free A passionate committed fanbase that talks to each other and you will help you create a better environment for advertisers upsells and addonsJim Louderback joined Revision3 as the CEO in July 2007 He can be reached at jimrevision3comRead all Jimamp8217s MediaBizBlogger commentaries at Jim Louderback MediaBizBlogger

Click to Make Your 2025 Contribution to Support the MediaVillage Education Foundation

Seven Strategies to Profit from "Free" - Jim Louderback - MediaBizBlogger

Author

Publish date

Channel

Jim Louderback

The Ad Council, Huntsman Mental Health Foundation and Amazon Announce “The Mind Set” to Support Mental Health - Ad Council InSites

More Videos:

Click to Make Your 2025 Contribution to Support the MediaVillage Education Foundation

Seven Strategies to Profit from "Free" - Jim Louderback - MediaBizBlogger

Enjoying This Commentary? There's More to Love

Jim Louderback

The Ad Council, Huntsman Mental Health Foundation and Amazon Announce “The Mind Set” to Support Mental Health - Ad Council InSites

The payment was successful

Cookies