THE FREE ECONOMY

TEAM NUEVE

THERE ARE THINGS WE TAKE

FOR GRANTED

Let’s  take  Google  example…      

WHY IS

DOING IT FOR FREE?

HOW ARE

THEY MAKING

MONEY?

FREE STRATEGY

USERS ADVERTISERS

Google  Offers  a  vast  collec6on  of  individuals  with  dis6nc6ve,  known  preferences    Benefit  for  adver6sers:  •  Scale  and  efficiency  •  Relevance  •  PPC  •  Some  freebies,  too  

TWO-SIDED MARKET

FREE STRATEGY

Ladies night out

THERE IS NOTHING

FREE IN LIFE

FREE ECONOMY

Factors driving the current boom:

1. Decline in the marginal cost of information

•  VALUABLE AND NOT-SO VALUABLE INFORMATION

•  GROWTH OF THE INTERNET- CREATION OF MASS

AUDIENCES

FREE ECONOMY

Factors driving the current boom:

2. Crowd-sourcing: co-creation of content

•  YOUTUBE – WIKIPEDIA – SOCIAL NETWORKS – HUFFINGTON

POST

•  NO COST TO PRODUCE THE CONTENT

•  FREEBIES STRATEGY

FREE ECONOMY

Factors driving the current boom:

3. Zero is a demand-booster

•  PEOPLE PREFER PRODUCTS THAT COST NOTHING TO

THOSE FOR WHICH THEY PAID A FEW CENTS

•  CHOCOLATE EXPERIMENT TO MEASURE HOW MUCH

PEOPLE LIKE FREE •  ZERO IS AN OFFER THAT’S HARD TO REFUSE: NO

DOWNSIDES

THE PSYCHOLOGY OF FREE

 1. Social Norms

2. Trouble Setting Prices

3. Options with no Downside

FREE FREE FREE

FREE IS JUST

ANOTHER PRICING

STRATEGY

Free is a hard price to beat…what’s better

than free?

BUT… Google’s two-sided business isn’t

undefeatable!

IS FREE THE ONLY OPTION?

You can’t fight free with free - e.g.

Newspaper industry

SO WHAT CAN WE DO INSTEAD?

“The best things in life are free. The second best

are very expensive”

Can Erkay Nora Rekus Rebecca Teboul Veronika Kiejnich Ximena Velasquez

QUESTIONS?