It is fair to say that the freemium business model has become well and truly established in the mobile ecosystem, wherein a consumer downloads a “lite” version of an applications, rather likes it and then – hopefully, from the developer’s perspective, either downloads a separate, premium version of said app or else upgrades via in-app billing. A variant of this approach allows the end user to access the full app free of charge, but in return he or she encounters advertising; cough up $2.99, the app publisher tells us, and all this will be yours, sans the advertising.
Now, to my mind at least, there is something profoundly negative – and certainly unimaginative – in this approach. It is based on the simple premise that we seek to avoid advertising; that we will pay to avoid it; that advertising is by its very nature at best irritating, at worst offensive. Given the fact that we have now reached the point where advertising can be targeted and tailored on pretty much an individual basis, then I would argue that the premise is incorrect.
Before you ask, yes I do skip through the ads on my personal video recorder, but that it because I have no interest in women’s clothing catalogues, or in claiming compensation for an accident, or in taking out loans at exorbitant rates of interest. Television advertising generally caters for a fairly wide range of demographics, and thus the chances of it appealing to a given individual are fairly remote: but when you have an advertising channel that is bespoke, that you can interact with, that pushes you information on brands or product lines in which you have expressed an interest (or even, to judge from your personal profile, that you may be interested in) then you have something that, correctly delivered, can be valuable to the end user.
Hence the fact that, rather than opting out, consumers are opting in: earlier this week O2 UK claimed that the user base to its opt-in advertising platform, O2 More, had tripled in six months, to six million users (or 27% of its total user base). This not only gives it reach equivalent to that of many prime time TV programmes, but also enables a far greater level of analysis for the advertiser. Furthermore, with 93% of opted-in customers opening their messages within five minutes, there is a remarkable willingness to engage with the advertising, which also includes targeted, location-based brand offers under the Priority Moments banner.
What O2 More (and Priority Moments) illustrate perfectly is that ad-based programmes that are well planned and well delivered may well in turn be well received by consumers. Indeed, that the customer who upgrades to premium from ad-funded freemium might well be missing a trick.
Or at least, a $5 discount at the local supermarket.