Free revisited!

In a NyT article LIA MILLER brings to our attention a new business model that is trying to offer WiFi services free to consumers. The idea is to earn enough bucks through advertisements...

AnchorFree, a company in Sunnyvale, Calif., that is two and a half years old, has introduced a service that lets merchants of any size — from a large bookstore chain to a mom-and-pop restaurant — offer free advertising-supported Wi-Fi to customers on the store premises. People who are shopping or eating in an AnchorFree location will see banner ads on their screens or short video spots or both before their browsing session.

Interestingly AnchorFree is not alone in its endeavor to promote advertisements supported free services. While the jury is still out on this approach atleast some consultants are impressed

“New economic models around advertising are disruptive,” Mr. Ayvazian said. “If companies like AnchorFree can add a new layer of innovation around free broadband access, they can be disruptive again and take market share.”

While all this sounds good, the million dollar is will this model work? To answer this question let us step back to the late 90s. Back then Dial up internet access was what Wifi is to the consumer now. A new cutting edge technology whose adoption was about to explode. And to draw parallels with AnchorFree even then there were companies who wanted to provide internet services free and hoped to make money out of advertisements.

You don't need free connectivity to figure out the peg: the Caltiger brandname. Reiterates Silva: ''The free ISP created tremendous brand recall. But we have always been a telecom infrastructure provider.'' Caltiger's free ISP-warts and all-was a smash hit, racking up the subscriber base from 14,000 in March, 2000, to 2.5 lakh five months later. On an equity base of Rs 35 crore, Caltiger's valuation skyrocketed to Rs 600 crore. A domestic IPO was slated for October, 2000, followed by a listing on the London Stock Exchange.

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The premise is simple enough: generate enough advertising revenue to offset the cost of access. Caltiger asserts that it is able to realise higher revenues as a result of demographically-targeted advertisements.

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Was it sustainable? hell no...the company went bust within two years leaving behind a lot of disappointed investors.

Caltiger, the erstwhile free internet service provider, seems to have shut down operations completely. Patriot Automation Projects, the Kolkata-based company which owned and promoted the Caltiger brand, has wound up its Kolkata and Mumbai offices and the ISP’s 100-odd employees have been laid off, according to sources. The shut-down, which sources say took place last month, comes 14 months after Caltiger switched to the paid ISP model.

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What is branding???

Confused as to what branding is? John Jantsch of ducttapemarketing does a great job explaining what branding in simple terms

Power of branding: Bose Corporation

People use Brands as a surrogate for quality. Thats why one would like to think that for great marketing one needs a great product first. However as the story of Bose corporation shows many times thats not the case. When I was young, for years I was told by people around me that Bose is the best speakers available in the world. They were perhaps inspired by the fact that it was founded by an Indian. Also the high price of Bose products did not hurt their argument. The cost of Bose is a part of the illusion. By attaching a high price tag, Bose creates an exclusive mystique to their product. Many consumers who have not seen the full range of speaker selections consider Bose "high end". Endorsements such as the one below also helped

Thats why I was surprised when I found that Bose was more of a great brand rather than great product...

Bose has perhaps the largest and most effective marketing campaign of any manufacturer. What other speaker manufacturer runs television ads? The marketing budget is spent in several ways:

*Sales Incentives. In many cases, the store and the salesperson earn higher commissions from selling Bose speakers than from selling other equally priced speaker. Of course, in other cases, the store may have greater incentives to sell other speakers, but Bose is well above average among mass-market speakers.

*Store Support. The marketing budget also pays for large numbers of marketers who work with the individual stores, encouraging stores to stock and sell Bose products, and arranging in-store promotions and sales. If the experience of some on the audio newsgroups is to be believed, Bose even sends marketers to the stores to pose as salespeople, who steer customers towards Bose under this guise.

Of course, the company with the best marketing does not always offer the best products.

One point often made in favor of Bose is their research. Indeed, Bose has a large and highly-trained scientific research staff. However, it seems that relatively little of this research filters down to their everyday speakers --- their basic speaker designs have remained largely the same for many years. This rather surprising conclusion is supported by comparisons with other industries. For example, Budweiser and MacDonalds also have large and highly-trained scientific research staffs, and yet continue to produce the same products year after year. In essence, most of the research is for purposes of hedging their bets and flexibility --- if the marketplace demands changes, the corporation will have the research results in hand to react quickly. In the case of Bose, the research budget is still quite small compared to the marketing budget. Furthermore, the research makes good PR, and in fact justifies one of their well known marketing slogans --- "Better Sound Through Research."

Even more revealing was section on Bose Innovations

Bose has the reputation among the general public as a leader in innovative speaker design. This is partly the result of their marketing campaign, but also simply because they are unusual --- its sometimes easy to confuse unusual with new or innovative. However, according to the historically knowledgeble on the newsgroups, most of the Bose's "innovations" were actually devised years ago and incorporated into textbooks and commercial speaker designs pre-dating Bose by years and even decades. In some cases, Bose's patents are small refinements of long-established techniques. Thus, according to many on the newsgroups, Bose's main contribution is popularizing their speaker designs through aggressive marketing.

Sex and Politics...

"I will give you 40,000 Blow Jobs" this Belgian Ad boldly proclaims.
In light of the incredible "Job creation" claims by Belgium's mainstream politicians, NEE party's senate candidate Tania Derveaux has decided to take them head on...she is now promising "Blow Jobs"...and what more a time table for implementation has been set

According to my planning this would take me 500 days to tour around the world, visiting all the ones who signed up for a blowjob on this page, giving 80 blowjobs per day. So the offer is limited, sign up while you still can.

To add icing on the cake , she's offering the shy and married ones a virtual blowjob in Second Life. All one has to do is sign up and agree to the terms of service. So what are you waiting for folks...hurry up ;)