The Impact of Free in Local

Techcruch reports:

Wired editor-in chief-Chris Anderson kicked off his magazine’s Disruptive By Design conference today in New York City with a speech about how the Internet makes everything free, which is the topic of his latest book, Free: The Future of A Radical Price He articulated something that is now increasingly becoming obvious: As products go digital, their marginal cost goes to zero.


In one slide, Anderson comes up with the following rules for media companies trying to figure out how to make money online:

  1. The best model is a mix of free and paid
  2. You can’t charge for an exclusive that will be repeated elsewhere,
  3. Don’t charge for the most popular content on your site,
  4. Content behind a pay wall should appeal to niches, the narrower the niche the better

Applied to Local Search and Advertising

Local search and advertising have seen the ‘free effect’ in action:

  1. In the Yellow Pages, merchants pay for Enhanced Listings.  But on Google listings are free.
  2. GOOG411 (and similar services) provide free directory assistance (albeit without human intervention).
  3. Maps are freely available online (we used to purchase printed maps).
  4. User’s freely contribute reviews.

So, what’s the equivalent of ‘paid niche content’?  Well, I suppose, editorial reviews of things like restaurants might still fall in to this category.  Are there other examples?  But at the consumer end, it seems likely that the vast majority of services provided to consumers will be free.

So I wonder if local ‘advertising’ is really going to morph in to a services business as I suggested in my previous blog post – The Biggest Opportunity in Local Advertising?


2 Responses to “The Impact of Free in Local”

  1. 1 Andrew Shotland June 15, 2009 at 9:17 pm

    Re what content people will pay for AngiesList has already set a precedent for people paying for reviews ($60/yr) that are perhaps more authentic, trusted, verified, etc because they come from others who are also paying. So perhaps one of the pay niches for local will be for ways to verify the data – for example if you are on an IYP and you are looking for a contractor maybe you would be willing to pay $5 to see a survey of their customers.

  2. 2 predictabuy June 15, 2009 at 9:25 pm

    Yes, I was thinking of Angie’s List as well. And I pay a small yearly fee to consumer reports for access to their professional reviews. I suspect the more money you are going to invest, the more willing people you are to pay for a trusted opinion.

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