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News & Insights

News & Insights

Information as Advertising, Again

Back in 1994 I sketched out an outline for the hoovers.com business model that relied on one simple idea: using content to drive marketing. The underlying model was basically the same as a magazine – charge for subscriptions; run advertising – but since Hoover’s (then The Reference Press) had basically no money for marketing and advertising I suggested giving away a significant amount of content in order to drive traffic. With a self-targeted audience (i.e., everyone who visited the site was a prospective subscriber) I figured that normal direct marketing models would work and 1% of the audience would convert to subscribers at $10/month. It worked.

These days I am seeing this model everywhere. In the B2B world, companies use Twitter to demonstrate their thought leadership by sharing their ideas and experiences with current and prospective customers. Instead of asserting that they “get it” on marketing web pages, these companies are proving it by giving away free samples. In the B2C arena, a current Home Depot advertisement shows viewers how to create a hanging Christmas tree with a handful of small items the store sells, effectively producing the kind of “featurette” you might pay to see in Martha Stewart Living magazine.

The concept is simple and effective. The recipient of the free item gets an immediate benefit and becomes, in a way, indebted to the giver. In other words, a relationship, however small it is, is established. So, as everybody these days trips over themselves to be more “social” with their marketing, they really don’t need to look further than this age-old idea to establish a relationship with their prospects.

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