Putting Freemium Marketinginto ContextJoseph J. EspositoSSP Annual ConferenceSan FranciscoJune 7, 2013
Topics• What is “freemium marketing”?• The economics of digital marketing• Freemium as a form of product sampling• Kinds o...
What Is Freemium Marketing?• Use free goods to build an audience, then tryto upsell them to premium goods and services• Es...
Economics of Digital Marketing• Are bits truly free? (Fixed vs. variable costs)• N.B.: As wireless overtakes wireline, dat...
How to Think about Product Sampling• Read 10 pages for free; then buy the book• Free sharing of journals articles; now pur...
Restrictions on Free Component• By time (5 minutes free)• By channel (free to individual, cost for library)• By feature (f...
Consumer or Institutional Market?• Free to individuals: market D2C• Upsell to individuals• Upsell to libraries• For many s...
The Broader Context• Free is one marketing tactic of many• Consider using free alongside other marketingtactics (advertisi...
4 Steps to Successful Web Marketing1. Get a user to come to a site for the first time2. Get a user to return to the site3....
Mission-based Freemium Services• Free component does double duty:disseminates information first, premiumconversion second•...
Building a Plan• ALWAYS PUBLISH THE BEST CONTENTPOSSIBLE; NEVER COMPROMISE• Insert freemium model into overall marketingpl...
Thank You!• Please contact me at espositoj@gmail.com
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Ssp presentation, june 2013

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Ssp presentation, june 2013

  1. 1. Putting Freemium Marketinginto ContextJoseph J. EspositoSSP Annual ConferenceSan FranciscoJune 7, 2013
  2. 2. Topics• What is “freemium marketing”?• The economics of digital marketing• Freemium as a form of product sampling• Kinds of restrictions on the free component• Consumer vs. institutional marketing• The broader context of online promotion• Freemium in the not-for-profit arena• Building a plan
  3. 3. What Is Freemium Marketing?• Use free goods to build an audience, then tryto upsell them to premium goods and services• Essentially a form of tactical marketing• Virtues: bits are free; form of productsampling• Limitations: how to attract an audience in thefirst place; cost of maintaining free service;challenge of converting users; inherentlimitations in institutional markets
  4. 4. Economics of Digital Marketing• Are bits truly free? (Fixed vs. variable costs)• N.B.: As wireless overtakes wireline, datalimits could impose cost on bits• Low (or zero) variable costs leads to freepromotions and extensive product sampling• Free component converts editorial investmentinto marketing expense• Challenge is how much to give away toencourage best conversion rate
  5. 5. How to Think about Product Sampling• Read 10 pages for free; then buy the book• Free sharing of journals articles; now purchasehosting services (Mendeley)• Free cheese sample; now buy the wheel• Free luncheon seminar; now buy vacation realestate• Don’t romanticize freemium marketing; it’ssimply product sampling by another name
  6. 6. Restrictions on Free Component• By time (5 minutes free)• By channel (free to individual, cost for library)• By feature (free content, paid search orhosting, etc.)• By capacity (one user free, multiple users pay)• Etc.
  7. 7. Consumer or Institutional Market?• Free to individuals: market D2C• Upsell to individuals• Upsell to libraries• For many scholarly publishers, the issue is notfree vs. paid but consumer vs. institutional
  8. 8. The Broader Context• Free is one marketing tactic of many• Consider using free alongside other marketingtactics (advertising, social media, issuance ofwhite papers, etc.)• With no Web traffic, freemium tactic is useless• Successful implementations have solid Webtraffic and high conversion rates
  9. 9. 4 Steps to Successful Web Marketing1. Get a user to come to a site for the first time2. Get a user to return to the site3. Motivate a user to help bring others to thesite (viral marketing)4. Have the user take some action on the site(disclose personal information, makepurchase, etc.)Freemium marketing is an aspect of #4
  10. 10. Mission-based Freemium Services• Free component does double duty:disseminates information first, premiumconversion second• Examples: free books online, but pay for POD;free content for target group, but pay for ITservices• Very challenging to get reasonable conversionrates• Cost of supporting free component
  11. 11. Building a Plan• ALWAYS PUBLISH THE BEST CONTENTPOSSIBLE; NEVER COMPROMISE• Insert freemium model into overall marketingplan• Use any means possible to get people to sitefor the first time• Assess marketing funnel carefully; focus onconversion rate
  12. 12. Thank You!• Please contact me at espositoj@gmail.com

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