In Defense Of Free

In this opinion piece, PSFK founder Piers Fawkes defends the idea of free and explains how it is making his business thrive. He says that critics are railing against three key issues – free as a progressive business concept; that free means we have to change what we do for work; and that many people don’t live ‘free’ yet.


I would argue that Anderson’s book documents a system of trade that is just as complicated as the situation where we give real value to the notes in our pockets or the numbers on a screen. If we’re prepared to concede that a piece of green paper is the equal value as a small hamburger then we should be able to accept that free is a business model, or models, too.

At PSFK we do a lot for free to do a little for a lot. The monies made from the little stuff we do offsets the costs of the (free) lot. As most of you know, we publish a daily news site for free – a publication that might have been sold for a price on magazine shelves a few years back. We did try a paid-subscription spin-off called IF! for specialist content once but then we realized that the model didn’t work. The people who wrote for us weren’t motivated: beyond getting paid they wanted to get read and recognized by the many who read our free website; and the people who wanted us to write about them didn’t want their news to be read by 500 people – they wanted their news to be read by the thousands who read PSFK each day.

PSFK.com doesn’t make PSFK, the business, much money directly. Sure, we do get the occasional ad buy but it’s a small fraction of our revenues and maybe it will always be that way: Of course, I do dream that one day a light bulb will go off in media buyers heads and they will realize that we’re such a good way to ‘talk’ to an audience of influencers and they will all phone us for our deck and rate card, but in the cold light of day I’m pretty sure this won’t actually happen.

In fact, I have a hunch that advertising will never support a huge percentage of online publishing because marketing is trying to get out of the advertising business. If you look at what’s going on in ‘Madison Avenue’ you will notice this clearly. Why are ad agencies so enamored with social media marketing right now? Because you can do it for free. Advertising on niche or even large websites may always going to be a minor line on a campaign plan but ad agencies are just going to find more and more ways to do the marketing for their clients for free… until their clients realize they can do it for free themselves.

Instead of making money from charging ad agency people to subscribe to the PSFK site or making money by charging ad people for placing messages on the site, we already generate revenues through providing other ‘premium’ services to agencies and clients – from ticket sales to events to tailored introductions to experts to custom research and analysis from the PSFK team of contributors.

Sidepoint

Commentators have been arguing for a few years now that we will see a shift of marketing budgets from offline to online, that the massive spending on TV and billboards will be transplanted into the digital medium where messages can be micro-targeted in a hyper-dynamic, real-time manner. I agree that digital media will drive a dramatic drop in offline spending but I don’t know if I agree that the money will flip online.

Through the internet you can do so much ‘marketing’ for so little and even more for free. Why would a client need to shift budgets from offline to on? Why not keep the cash for something more interesting instead?

This has serious implications. As the number of free ways to market a product and service increases, we could speculate that the amount of advertising spent online today is at its all time peak and even that will gradually decline.

So… if the value of ad traditional dollars spent plummets and online dwindles that could only mean that the advertising industry will therefore suffer a rather large shrinkage. Because of free, brands won’t need as much of the services provided from ad agencies and their production companies. Will we consider advertising as a peculiarity to help businesses shout in many widespread places at the same time until the internet came along and helped businesses talk to many people as individuals at the same time?

And just to take this a little further… if brands won’t be spending as much on advertising because of free – what is going to happen to the publishing industry that relies on it? Most of the traditional newspapers and magazines that have responded to declining ad revenues offline by moving their publishing focus online aren’t going to see the uplift of online ad revenue they need to support the current size of their businesses. I know it’s not nice news to hear but I argue again that the ad spend flip from offline to online is not going to happen. Both the ad and publishing industries are going to have to quickly evolve their business models to find new ways to make revenue.

Free to do what we want to do, not what we intended to do

Another reason why we don’t like free is that it threatens our personal situation and it means we have to do something about it. Our jobs have to change and will change. The thing is that we’ll resist change: Many of us have spent a lot of time dedicated to crafting careers, or at least getting to a position of safety, and we don’t like the idea that what we (think we) want to do might not be what’s on offer in a year or so’s time.

At PSFK we have to engage a hybrid workforce to respond to free. We need to find an internal team who can work in the publishing, events and consultancy sides of the business and we have a network of contributors who support all sides of the business too. Employees need to be able to create free and premium PSFK services. We can’t work with people who just want to be writers because they need to be able to work in revenue generating areas like planning an event and presenting before a client too; and we can’t work with people who just want to be consultants because they need to write on PSFK.com to keep our voice out there. Having this flexibility allows us to twist and turn to react to the type of opportunities that become available over time (advertising deal, events sponsorship, consultancy gig) and to make our own fortune when no opportunity presents itself.

Yes, I imagine that it’s difficult to accept a world there are no job titles and it doesn’t fit in with a traditional style of business but I do believe that many companies will need to employ staff that can adapt to different tasks to react to a volatile world rather than differently skilled workers who produce the same task.

Living In The Free World

The third reason I think Anderson’s book gets criticism is that many, many people don’t live in a free world. Yet. They live in a world of transaction which we’re taught to agree with. At PSFK we wouldn’t exist if we didn’t live ‘free’. In terms of our consultancy business we compete at a speed and price that many established companies just can’t compete with.

If you asked me today, tomorrow I could tell you about what’s happening in anywhere on any subject. By tomorrow, I can interview five opinion-leaders in Moscow who understand change in your target market, I can get photographs of your competitors marketing in every emerging market from Portugal to Peru, I can tell you the latest trends on the web to help you talk to your diverse group of customers.

I can do all this because of the near zero costs of many of the tools we utilize in our business. Practically, we use free office software from Google to share information between ourselves and our clients, we use Skype to video interview tastemakers anywhere from Japan to Moscow for free, we have a network of over 200 experts and thinker around the world which we created for free and can tap into for free, we use ‘freemium’ file-sharing services to help transfer to New York the video shot on the street on the same day on the other side of the globe, we use private groups on the free Flickr to get dozens of international scouts to send us photos on a specific subject, and we publish everything using free blogging software on near-free hosting services. Many research and innovation organizations appear not to have moved fast enough to take advantage of these free services and that gives PSFK a competitive advantage. Those organizations often live in an IT department led world that waits for costly enterprise solutions – but PSFK lives in a world of free enterprising solutions.

The internet allows us to do much of our work for free. It is a free window to the world that many traditional market research companies still consider as ‘secondary research’ – or something that the interns can look at. But the reality is that the internet is a window from which you can watch the world go by, speak to people on the other side and even pass stuff through it. It’s the most amazing trends and market research tool available and most of it is free and still there’s a large industry built on flying on planes to talk to interviewees face to face and charging for information. I believe that the multi-billion dollar research market is be due for shrinkage pretty soon too. I’m hoping that PSFK’s early start in the world of free helps it ride the change in the industry and moves our company from small player in a large sector to a large player in a smaller one.

Final Note

The thing with free is that many of us don’t want it to happen because it’s going to cause change we weren’t planning for and work we don’t want to do. Many complained about the internet and it came and took over our world; they mocked blogging but it came and took over the world; and today we complain about free – not realizing that it’s already here.

Free by Chris Anderson on Amazon

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