The Free Economy Project
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Transcript of The Free Economy Project
![Page 1: The Free Economy Project](https://reader030.fdocuments.in/reader030/viewer/2022032513/55d18061bb61eb14328b45d1/html5/thumbnails/1.jpg)
THE FREE ECONOMY
TEAM NUEVE
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THERE ARE THINGS WE TAKE
FOR GRANTED
Let’s take Google example…
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WHY IS
DOING IT FOR FREE?
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HOW ARE
THEY MAKING
MONEY?
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FREE STRATEGY
USERS ADVERTISERS
Google Offers a vast collec6on of individuals with dis6nc6ve, known preferences Benefit for adver6sers: • Scale and efficiency • Relevance • PPC • Some freebies, too
TWO-SIDED MARKET
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FREE STRATEGY
Ladies night out
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THERE IS NOTHING
FREE IN LIFE
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FREE ECONOMY
Factors driving the current boom:
1. Decline in the marginal cost of information
• VALUABLE AND NOT-SO VALUABLE INFORMATION
• GROWTH OF THE INTERNET- CREATION OF MASS
AUDIENCES
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FREE ECONOMY
Factors driving the current boom:
2. Crowd-sourcing: co-creation of content
• YOUTUBE – WIKIPEDIA – SOCIAL NETWORKS – HUFFINGTON
POST
• NO COST TO PRODUCE THE CONTENT
• FREEBIES STRATEGY
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FREE ECONOMY
Factors driving the current boom:
3. Zero is a demand-booster
• PEOPLE PREFER PRODUCTS THAT COST NOTHING TO
THOSE FOR WHICH THEY PAID A FEW CENTS
• CHOCOLATE EXPERIMENT TO MEASURE HOW MUCH
PEOPLE LIKE FREE • ZERO IS AN OFFER THAT’S HARD TO REFUSE: NO
DOWNSIDES
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THE PSYCHOLOGY OF FREE
1. Social Norms
2. Trouble Setting Prices
3. Options with no Downside
FREE FREE FREE
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FREE IS JUST
ANOTHER PRICING
STRATEGY
Free is a hard price to beat…what’s better
than free?
BUT… Google’s two-sided business isn’t
undefeatable!
![Page 13: The Free Economy Project](https://reader030.fdocuments.in/reader030/viewer/2022032513/55d18061bb61eb14328b45d1/html5/thumbnails/13.jpg)
IS FREE THE ONLY OPTION?
You can’t fight free with free - e.g.
Newspaper industry
SO WHAT CAN WE DO INSTEAD?
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“The best things in life are free. The second best
are very expensive”
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Can Erkay Nora Rekus Rebecca Teboul Veronika Kiejnich Ximena Velasquez
QUESTIONS?