Over the past two weeks I have been speaking on both sides of the Atlantic; regardless whether it has been for the entertainment industry in Hollywood; a mobile operator conference (or wireless carriers) in San Francisco or the music industry in Cannes; today everyone wants an answer to the following question: How to capture the value in free business models?
Advertising and brands should come and save the day and my industry; and pay the bills. After all, if Internet advertising is growing very fast, surely we can do the same?

My message to all these audiences has been the same. Advertisers and brands are not interested in saving your industry or paying your bills. They are looking for ways to connect with their consumers in the most engaging and/or economically most efficient way. Only by achieving this will they become interested in you: Behind every marketer is a great CFO. Money talks in advertising investments as well.

This makes sense right?.. But in fact no.. every industry is taking a personal viewpoint of the situation. In order to become a fruitful and successful media environment you must put the audience first and then the advertisers- both of them and in that order. Not just your own business needs, industry troubles or concerns. For example in the case of the music industry the big question is; why some do some consumers not want to pay for their digital music downloads but are ready to buy expensive tickets to live concerts? Not.. How to make the advertisers compensate for the loss of revenue from illegal downloads.
Free services or entertainment cannot be less useful or entertaining than a paid one. In actual fact it has to be more and this is possible. Free is not less.. free is more. Free can pervade any market within communication, media and entertainment, quicker and can create a phenomenon far greater than has been previously possible with old business models. And if this brings value to advertisers they will use it- just see what happened to the web after Google introduced relevance to internet advertising.
We have a new generation of young adults who are used to getting a lot of services for free. They do pay for some services, but for example old television broadcasting media business is being replaced by social networks, free mobile services, free music downloads etc. Remember television used to be “free” as well. But what makes today’s’ “new free” far more efficient for advertisers: the answer is Relevancy; something that broad appeal media such as television cannot deliver. Accurate profiling of interactive media provides not only demographic data, but also attitude and preference related information and more importantly buying behaviour information. There has never been a better time for smart marketers.
So user experience and advertiser interests go hand in hand: Not as they are sometimes poised in the less enlightened press as “annoying ads or exchange of free”. As free is free, people can also change their service- if it is not up to scratch. However, for many industries, this is a very frightening future, they would like to tie down their audience/ consumers, not ‘set them free’.
The offer of free really can work if you do with your audiences’ best interest in mind.