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    Why Free Content Isn’t Free

    Advertising.  That is the motto of seemingly every business you hear of today.  They will provide a service that is free to the customer and it will be supported by advertising.  Even Twitter said today that they will be launching an advertising business soon.  Fine.  I get it.  There is tons of money to be made with advertising.  Look no more than the post on Shoemoney where Jeremy says that:

    We allocated them a small budget of like 100k for a week and they did incredible.

    A SMALL budget of $100,000 per WEEK.  Yeah, there is money to be made in advertising space on your product/blog.  It is a great idea.  I have ads on this blog to help offset the cost of running it.  Hey, if it works that is great.  And best of all?  The consumer gets the content free.  Right?

    Well, that really all depends on your definition of free.  You get a discount at your local supermarket when you swipe your shopper card.  You earn rewards on your credit or debit card.  You get to use a product and it costs you nothing.  But one must stop for a moment and think about what is really happening.

    Business are generally not in business to be a charity.  Otherwise they would be a charity; that’s how these things work.  So that means that whatever strategy they are employing at the current moment is probably set up so that the company makes money.

    Now of course there are two sides to every coin.  You swipe your shopping card to get a discount.  The company collects the data and learns from it.  They place things near each other to cross sell.  Is this a service – they want to make it easier to shop.  Or is it trickery – you will buy both items even though you only need one item.

    The same is true with credit card loyalty programs.  Of course you get rewards so you are happy, but the company is also collecting data on you buying habits – maybe to send you offers in the mail.  Like the stuffers that come in some bills.  You don’t really think that stuff is all random do you?  (well, it might be, but not if the company is properly leveraging the data)

    And of course the ads for free services.  Even if you never click them, you see them.  They are the billboards of the internet.  You just have to trust that the display advertising works (or test into it).  They are impacting your perception of the brand or at least keeping it top of mind.

    Perhaps these are trade-offs that you willingly make.  Maybe you think you are the exception and don’t see it all.  That may be the case, but there are lots and lots of ever increasingly sophisticated way to trick your brain.  What our brains react to, how they work, what areas are activated when image A is viewed vs. image B.  Really, there are places doing consumer research where they are actively scanning the brain of the volunteer while they participate in the study.

    It is a very interesting, but possibly scary field – for the consumer.  So when you see all of these ad supported things and think it’s just free, consider what you are actually selling to get it.  Yourself.  And as the techniques get increasingly intelligent, the idea of ads everywhere gets increasingly uncomfortable.

    What do you think about all the ads?

    This has been a Thought From The Cake Scraps.

    2 responses to “Why Free Content Isn’t Free”

    1. fantasy7 says:

      I was just having this conversation with someone the other day about Google. I use Google for all kinds of things– google sync to back up my contacts on my phone, google maps and google searches, done through my iGoogle portal. I use Youtube and GoogleTalk and GoogleVoice and Picasa. And maybe most importantly, my main email address is a Gmail one. Incredibly, I have never paid google a cent, for all these services. I probably have over 10 gigs of cloud space with Google, entirely for free.

      The person I was talking with the other day utterly objected to Gmail’s invasion of your privacy– they scan all incoming email messages in order to serve you up advertisements relevant to your most recent mail (I’m sure everyone has been creeped out enough times by this… you wish your mother a happy mother’s day and it’s got “send flowers for mother’s day” listed above your emails). As you say, businesses are businesses for a reason. Theoretically, Google knows the email addresses and phone numbers of everyone I know. They know what searches I do and what is in my email. Even if they “anonymize” the data– come on, we all know SOMEONE out there can access that stuff if they want to. Enough court cases have subpoenaed enough things that suddenly became knowable.

      I have to provide my credit card number to businesses when I buy things. Now these businesses know my credit card number. But that’s the whole point. In today’s world of technology and convenience, you have to make some sacrifices for privacy that while we may be a bit uncomfortable with (as identity theft is an ever greater risk), refusing to accept some of this risk means staying in the past and never benefiting from new technologies and conveniences.

      If you’re really paranoid, use Cuil. But they don’t let me text for free.

    2. Al says:

      Your last paragraph (Fantasy7) seems to confuse privacy with several other things. I understand that if I have a telephone, other people can call me. That isn’t the same as letting anyone listen in on all of my calls! Should long distance telephone companies use software to analyze the content of all my conversations in order to sell my accumulated information to marketing and advertising organizations, and claim that revenue subsidizes the long distance service they are providing?

      If I subscribe to a magazine, it would be nice if they just used my address to send me the magazines and an occassional bill, rather than as a revenue source as they prositute that address information to anyone with a cent or two. When I give my credit card to a business, I expect them to use it to charge me for the purchase I am making, not to sell it to someone who might want to steal my identity. Might it be nice if the law required someone to use another person’s information for the purpose intended (rather than for whatever they thought could make them another dime)? I think the morality of the issue is fairly clear, and someone like Google is quite clearly acting immorally.

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