In a recent article in the Wall Street Journal entitled, “The Economics of Giving It Away,” Chris Anderson, editor in chief of Wired magazine, states that “Free may be the best price, but it can’t be the only one.” 

Twitter, Pandora, Pogo, Facebook, and YouTube have all built an enormous user base using the free or freemium model.  Now they are all working on the problem of how to raise enough cash to cover their overhead.

South Park even had a show about this issue.  Have you ever heard of the Underpants Gnomes? Their business plan is – Phase 1:  Collect Underpants; Phase 2:  ???; Phase 3:  PROFIT!  In other words, collect a lot of users and hope to make a profit, but having no idea where the profit is going to come from. 

W3i can fill in the Phase 2 of the Underpants Gnomes business model.  Give your downloads away for free by joining W3i’s Download Network.  Since 2000, W3i has installed over 200 million downloads for free, supported by its Download Network, generating cash for software companies.  Several companies with free software models have partnered with W3i to increase their revenue—Digsby, Anchor Free, and startup, Bewiki.

This is how it works.  Companies join W3i’s Download Network for two reasons:  to increase revenue or to increase distribution.  Companies with demand for their downloads use W3i’s proprietary Windows Installer, Install IQ, to offer their users valued-added software from companies like Yahoo!, AWS Convergence Technologies (WeatherBug), and Winferno, who have revenue-generating business models and are looking for distribution.  The user downloads your software, as well as the value-added software that they select, creating revenue to support your acquisition or operational costs. 

So go ahead and give away your free software, but be smart about it and join W3i’s Download Network.  To learn more, contact W3i.

Rob Weber, Vice President of Business Development and Co-Founder, W3i
Rob is an Internet marketing pioneer with over nine, profitable years building proven business models that increase revenue and distribution for downloads. 

By offering your online games for free, you can increase revenue. Sound like an irony? If 2% of your users actually convert to paying for your game with a trial offer, you left money on the table. You can earn revenue from a larger portion of your traffic by re-thinking your offer. There are alternatives to the try-and-buy model for game marketing.

As the economy continues to slide, consumers are holding on to their money. They want the entertainment value of online games, but they don’t want to pay for them. Alternative business models allow you to offer your games for free, removing some of the risk of development and marketing. Don’t end up in the video game dead pool—in the past five years almost 100 game developers and publishers have gone out of business.

Alternative business models for online games include: in-game ad model, ad-supported installer model, and the alternative-payment model.

In-game advertising is becoming an acceptable business model as big brands are testing it as a way to reach elusive markets. In-game advertising spending was $295 million in 2007 and projected to grow to $650 million in 2012. IGA Worldwide research showed 82% of consumers feel the games are just as enjoyable with ads and 66% feel that the ads are not intrusive. The top in-game advertising companies are:

1. Massive Incorporated
2. Double Fusion
3. JOGO Media
4. IGA Worldwide
5. NeoEdge Networks (casual games)

Although in-game advertising is growing, it can be difficult to execute and has a long payment cycle. For it to work, the creative must fit seamlessly with the game theme and not deter from game play. Additionally, users must spend considerable time playing the game for your ad revenue to build up.

An second alternative is the ad-supported installation model. The W3i Download Network (WDN) is a new revenue stream worth considering. WDN is a network of companies with downloadable content—including downloadable games. A unique Windows installer, Install IQ (certified in the TRUSTe Trusted Download Program), is used during the installation process to offer the user a value-add of additional software—like the Yahoo! Toolbar or the WeatherBug weather widget. WDN requires minimal in-house resources, and you can start earning quickly once Install IQ is in place and new users install your games. The user only sees ads during the installation of your game so they have no interruption during game play. Additionally, since all of the revenue activity happens during the installation, the actual game play itself is not impacted.

A third option is the alternative-payment model–companies like Trialpay. With Trialpay, a user can purchase your game by completing one advertising offer. TrialPay can boost sales from your current traffic by giving your customers an alternative way to pay. This has its drawbacks as the user must commit to another offer before he/she receives your game; therefore, it is not technically “free”.

Use creativity in your marketing plan by reviewing alternative business models. You can earn significant revenue by promoting your game for “free” while earning revenue from an alternative source.

About the Author:
Josh Fiedler is the Business Development Manager at W3i, a provider of integrated desktop and browser marketing solutions. His expertise is in increasing revenue and traffic for downloadable games and utility software.

About W3i:
W3i, owner of Freeze.com, delivers proven, integrated desktop and browser marketing solutions.  With solutions tested and optimized on over 200 million installs–currently 4.2 million installs monthly, W3i can increase revenue and traffic for downloadable software, applications and digital content or provide a receptive consumer base for customized, targeted distribution programs.  W3i’s solutions utilize Install IQ, a proprietary Windows installation system and download manager developed by W3i. Install IQ is the first installation system to be certified in the TRUSTe Trusted Download Program.  To learn more about W3i, visit www.W3i.com.

Contact:
Deborah Manthei
Director of Marketing Communications
320-257-7571
deborah.manthei@W3i.com