The Freemium Model: A Death Knell For Brands?

Editor’s note: The author was incorrectly identified when this was posted on Friday, July 13. It has been amended.

Would you be offended if a potential match on a dating website paid a premium so he or she wouldn’t have to go out with you? That’s essentially the statement the popular freemium business strategy makes to marketers. An upgrade like Pandora One buys us the chance to shop, play or work in an ad-free environment. When consumers are willing to pony up to avoid seeing your ads, you know there’s trouble in Paradise.

Talk about poisoning the well: Depending upon whom you ask, we are exposedto 4,000 to 10,000 ad messages everyday. Small wonder that many of us resent ad intrusions. Almost half of consumers say they don’t trustbrands, and this figure skyrockets among Millennials. Edelman’s 2017 Trust Barometer reported in 2016 that just 45% of respondents said they trusted business. That number dropped to 33% in 2017.



We appear to be entering a period of (mild) rebellion against brands. Consider these developments:

  • The popular mindfulnessmovement encourages followers to slow down, tune out distractions (like advertising), and focus on what they’re feeling at the moment (meditation-related businesses in the United States alone generate almost $1 billion in revenue per year — perhaps you see the irony in that?). 
  • Decluttering has become an obsession for many, an art form that followers revere for its Zen-like flavor. 
  • As our attachment to social media grows, so, too, do earnest conversations about the value of a social media detox to restore life balance. I assign one of these (for 72 hours) to my students — they suffer mightily, and then thank me at the end for forcing them to step away from their devices at least for a few days.  
  • The startup CPG company Brandless sellsplainly packaged, high-end staples for $3 apiece.  

So, what’s the future of branding? Maybe we can glimpse it at — of all places — the stodgy MastersGolf Tournament. The event allows only five sponsors: AT&T, IBM, Mercedes-Benz, UPS and Rolex. Each pays more than $6 million for the privilege of having absolutely no signage at the course and sharing a total of four minutes of ads per broadcast hour. Now that’s “branding lite,” but it doesn’t seem to deter these companies.

Back to the freemium model for a moment. Are we missing an interesting business opportunity here? If consumers are willing to pay for a website that is free of branding, imagine what they would fork over to live in a physical spot that’s devoid of logos. Like the social media detox movement, is there a place for a brand detox experience? Would you pay a premium to stay in a resort for a week where you didn’t encounter a single logo? Will we see brand-free zones in public places (especially schools) anytime soon? 

Of course, the devil is in the details. Maybe a “brand lite” environment isn’t such a bad idea — at least until we get lonely for the good old days of brand regular.

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