Response to Free

1. In the book “Free” Chris Anderson talks about video game advertising and how internet games allow advertisers to continually update their advertisements as opposed to building them into the original game, making them impossible to update. Does this change in advertisements make advertising more expensive and time consuming for advertisers since they can constantly update it? How much outcome must they get in order for this expense and time to be worth it?

This question reminds me of what we talked about in class today with marginal cost.  Even if it costs five dollars to make an advertisement, they only have to make it once and can rapidly increase their income by selling it over and over, with no cost to them.  So even if they are constantly updating the advertisements, the income that they are making for each advertisement would definitely make up for the cost it takes to make a new advertisement.  Therefore, it is well worth the time and effort it takes to update advertisements due to the internet’s marginal costs.

2. If giving free samples is so beneficial, why don’t more companies partake? I realize it’s mostly start up companies that benefit from it, but wouldn’t a “free burger” day from McDonald’s seriously benefit them? Because most people would also buy fries and a drink to go along with it.

I do think that it is helpful for companies to have a “free day” — or something along those lines.  It not only excites the customer (because, really, who doesn’t like free food?) it also reminds them of the product you are selling.  I remember not too long ago Chick-fil-A was having a morning where they were giving out free breakfast biscuits.  I hadn’t eaten at Chick-fil-A in months, but I couldn’t pass that offer up.  Ever since then I probably eat there once every week or two.  The free reminder of how delicious their chicken is made me want to go back for more.  Also, as we discussed in class people are more willing to pay for things when they get other stuff for free.  So, as I mentioned in my question, it is very likely that a free Chick-fil-A breakfast sandwich would prompt someone to also buy a drink and maybe even one of their delicious cheesecakes.  Free, in turn, is not free at all.

3. In chapter 16, Anderson says that free is no longer a trick. That “Trickery is no longer an essential part of the model”. I don’t believe that to be true. In fact, I think that because of the internet it is almost easier to “trick” someone into having them pay for something free. Think about all of the pop-up ads that make you think if you click a box it will go away, but doing that just takes you to another page, selling some sort of product? Doesn’t the free access of the internet actually make it much easier to trick someone into buying things?

I still believe this to be true.  It reminds me of all of the free trials that are offered on the internet, and yet you still must enter your credit card number in order for it to apply.  The advertisement will write in incredibly small print that if you don’t call a certain number within 30 days or less to cancel your subscription, that they will start charging your account.  What I have found is that it is really difficult to cancel these subscriptions, as they don’t want you to cancel them, because they want your money.  With that being said, I definitely think that the internet makes it easy for companies to “trick” a person into buying things that are actually meant to be free.