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Come Play With our Brand; it’s Free (for Now)

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Freemium cartoon

Guest Post by Ken Wisnefski:

What do you think about “freemiums?” Do they make for good, online-marketing tactics? Is offering something at no charge a doo-doo practice? The notion of giving out freebies to eventually garner revenue is not a novel or extinct business practice; brands offering free samples have been doing such for years.

Game-maker, Electronic Arts, showcased in a NY Times article, is embracing the freemium practice. A husband-and-wife duo did the same, first offering an iPhone game at cost ($.99) then deciding to give it away for free. The cost-associated version had some success; the free version spiked in popularity, selling experiencing more than 40 million downloads.

Ms. Luckyanova, the ‘better half’ of the married duo, thinks free applications usher more exposure. “When you tell a friend about it and they go to the App Store and it’s free, they download it without thinking about it. Then there’s a stickiness and the addictiveness and people talking about it.”

Those in the online marketing community may know Joost de Valk, a developer and supplier of some free tools (his SEO WordPress plugin is widely popular). Joost makes a living through other professional endeavors; so, how can a brand offering freemiums eventually make a pay day?

The Temple Run game, engineered by the wife-and-husband team, makes money via an in-game virtual store. Players use virtual money to augment players and level of play, yet some use ‘real’ money to expedite the process. The Temple Run game is currently in 14th place on Apple’s top-grossing chart (a list of applications grossing the most money at the Apple App Store.)

Game-producer Zynga (FarmVille) has made the freemium philosophy more popular; but, many brands see it as a risk. How can ‘free’ guarantee eventual money? Ms. Luckyanova believes in a create-a-stir-first approach, banking on the possibility a particular percentage of highly interested parties will eventually begin opening wallets for a richer game experience.

A mobile-software analytics firm, Flurry, estimates 65% of revenue generated via the App Store ($2 billion) comes from free games, which charge for extra goods. Is Google experiencing the same dynamic within its Android market?  No, some believe, Apple’s idea of keeping consumer credit info easily at hand, is one of its advantages and Google’s disadvantages.

Electronic Arts’ games for the upcoming iPhone/Android year will largely be produced under the freemium umbrella, with consumers having options to buy extras. Some people think the ability to purchase extras is another way of cheating (In many cases, players leverage cash to augment players and scenarios, placing them at a debatable advantage over those who rely on skill for game progression.) Some producers, like Electronic Arts, feel freemiums are worth their weight in brand engagement. One game executive admits, “It’s a little more about portfolio management than an individual game.”  The philosophy sounds reasonable; in many cases online marketing service providers give ‘free site audits’ just to get potential consumers in the door.

Ken Wisnefski is CEO of WebiMax, an industry leading SEO Company located in Mount Laurel, NJ with over 500 clients and 150+ employees.

image by YourOwnLawFirm.com

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