Freemium Services: Be Careful Where You Focus Your Marketing

Dec 20, 2012 | Branding Strategies

Instagram created a tsunami of social media anger on Tuesday. They changed their user agreement, and the Internet screamed.

The most contentious issue was Instagram’s claim they have the right to license all public photos to any organization. Instagram’s CEO, Kevin Systrom, responded quickly to reassure users, “It is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear.”

I am confident the Instagram controversy will sort itself out in short order. It’s a great app, and will continue to be one. That said, the controversy highlights a much deeper issue: when you’re not paying for the product, you’re the product.

There’s no such thing as free

The controversy with Instagram is not unique. All free services—Google, Facebook, Twitter, LinkedIn, Pinterest, even Amazon—share a similar goal: monetizing their users.

These companies can offer free, if not virtually free, services by monetizing the data on the backend. Every user of these services has a value, and they can be monetized through attention, exposure or analytics. And often all three options are employed concurrently.

Instagram is clear in their purpose. Systrom wrote, “From the start, Instagram was created to become a business. Advertising is one of many ways that Instagram can become a self-sustaining business, but not the only one.”

Social networks are outposts not destinations

The blowback on Instagram is a wake up call for brands and marketers. Don’t anchor your brand on any one social network. They’re not there for you, they’re there for themselves.

The destination of your brand is your website. It’s where your content originates, and where your customers are drawn to.

It’s common sense. Companies don’t pay for a service on social networks. They pay for advertising and data. If Facebook changes their EdgeRank algorithm and it adversely impacts the reach of your content—there’s nothing you can do about it but buy more advertising. The same is true with Twitter, Google and all the other services. They can change their platform any way they want in order to maximize their revenue potential from the services.

You own your website. You control the layout, design, functionality and content. This is your most important digital asset. It is the destination to continually invest in and develop, regardless of what’s taking place in social media or other digital platforms.

What’s your take?

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Jeremy Miller

Top 30 Brand Guru

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