Jell-o, a 19th century invention, was arguably the first product to exploit the concept of "free" as a successful marketing technique -- not by giving out free samples, but rather by printing tens of thousands of pamphlets with Jell-O recipes for its salesmen to distribute to homemakers for free.
Gelatin comes from flesh and bones. It's the translucent, glutinous substance that skims to the top when you boil meat. But if you collect enough of it and purify it, adding color and flavor, it becomes something else: Jell-O. A clean powder in a packet, far removed from its abattoir origins of marrow and connective tissue.After its inventor had failed to make a go of marketing it, he sold the company to an enterprising businessman named Orator Frank Woodward, who devised the free pamphlet scheme.
Thus was born one of the most powerful marketing tools of the twentieth century: giving away one thing to create demand for another. What Woodward understood was that "free" is a word with an extraordinary ability to reset consumer psychology, create new markets, break old ones, and make almost any product more attractive. He also figured out that "free" didn't mean profitless. It just meant that the route from product to revenue was indirect, something that would become enshrined in the retail playbook as the concept of a "loss leader."Anderson, who is also the author of "The Long Tail," was recently a guest on NPR's "Fresh Air" with host extraordinaire Terry Gross. He discussed "Free" in the context of media institutions struggling with how to survive in a world where their product has been seemingly devalued to zero.
Among the topics Anderson addresses:
- Why the traditional advertising model hasn't worked on the Web;
- Why media outlets haven't yet figured out how to customize video ads and match them to appropriate videos that showcase them in appropriate environments;
- How the Wall Street Journal is successfully employing the "free-mium" model, which invites everyone through the front door at no charge, and gives away an appreciable amount of content, and then charges for niche or premium content;
- How each medium copies the previous one -- radio was TV with pictures; the Web was print with hyperlinks -- and then builds to the next plateau;
- Where all the money really went when Craigslist decimated the newspaper classified ad business (Hint: it didn't go to Craigslist);
- The impact of "free" on the quality of journalism, with so many fewer professionals on the beat, domestically and internationally;
- Given that newspapers are dying but, despite e-books, print books are thriving, what is the role of the print magazine in this age?
- Will financial desperation destroy that formerly sacred impermeable wall between editorial and advertising, given that Google has successfully married church and state? (Or was our long-held assumption -- that editorial/ad adjacency connotes the possibility of corruption -- erroneous in the first place?)