Not content with providing the world with one truly genius observation Chris Anderson’s new crusade is shining a light on the notion of ‘free’. In a recent post over at one of his blogs Chris identifies 4 models of free that are being used (and have been used for many years) in business and commerce, one of which I believe to be hugely significant to the future of branding.
His 4 models are:
1. Direct Cross-Subsidy (get one thing free pay for another) e.g. expensive wine subsidising cheap meals in restaurants
2. Ad supported (third party subsidises second party) Google is good example of a service funded by 3rd party
3. Freemium (a few people subsidise everyone else) Such as a ‘kids go in for free’ destination
4. Gift-economy (people give away things for non-monetary award) ??
It’s his last model (Gift-Economy) that interests me the most from the perspective of brand strategy, Chris describes them as assets “threading from the reputation and attention economies back to money through some long process that’s often impossible to quanitfy.”
Not exactly a resounding endorsement but that’s because it’s not designed with direct revenue generation in mind, it is as he points out about reputation and attention. For me, the 4th model actually speaks directly to the art of branding. More specifically it relates directly to what we today know as ‘brand utility.’ Nike Plus, David Armano’s MyVegas, Lloyds TSB’s Insurance.co.uk, BA’s Metrotwin are all designed with utility in mind, each offering up something of tangible value to the consumer (for free) in exchange for attention, engagement, positive feeling etc. But where’s the tangible benefit? For Nike this new ‘gift economy’ is actually paying dividends; according to Trevor Edwards, Nike’s Corporate VP for Brand and Category Management “people are coming into it on average three times a week. So we’re not having to go to them.”
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