If it Sounds Too Good to be True, It still could be!

Have you ever seen those ads for a FREE iPod?
Or perhaps a FREE Plasma TV or FREE Laptop, FREE Digital Camera?

I get spam email offering them all the time.
I immediately delete them because if it sounds too good to be true, it probably is.
Right? That’s what I use to believe. Then one day my friend Gus,
showed me his new computer system.

High-speed name brand computer, color monitor and color printer.
“Guess how much it cost?” he asks me. Since I use to sell computers for a living,
I had a pretty good guesstimate of what it should cost. “It’s about $1,000 bucks
for everything” I said.

“Nope, I got it FREE”. “Yeah, right” I said not believing him.
“Did you steal it or was it a gift?”
He told me he answered one of those ads for a FREE computer.

I said. “Those things are all scams. Nobody gives away FREE computers”.
He tells me that some of those offers probably are scams but there are also
some legitimate offers.

“How can anyone make money or even stay in business giving away free stuff?”
He says “Do you remember when Google first started?” “Sure” I said.
“How much did they charge to use their service, when they started?”
“They didn’t charge anything”.

“How much do they charge now?” he asks. “They still don’t charge”.
“So it’s FREE” he says.

Yet they have grown to be one of the most profitable companies in the entire world.
“Yea, but they are not giving away FREE expensive electronic equipment” I countered.

Gus looks me straight in the eye and asks “How do they make their money?”
“They sell advertising. Google Adsense and Adwords”.

“Ah, Advertising” he says. “Advertising has made them one of the most profitable
companies In history. While it may be contrary to what you’ve always been told -
if it sounds too good to be true it probably is - there really are legitimate
promotions that do offer consumers the opportunity to “earn” all types of
expensive gifts for FREE“.

“Now, as you can imagine“ he tells me, “the process for actually getting these FREE
items is not quite as easy as the advertisers and promoters want you to believe -
but it is very possible“.

“There are things a person needs to do to get them, but when you do, you get the item.
This type of advertising is known as incentive marketing and has spawned
an entire cottage industry of people earning free products”.

In a nutshell, the sites offering free products make money from advertising.

As part of their promotions they introduce consumers to various advertisers’
products and services, and in return they are paid a commission for each new
“lead” they generate.

For example, they might earn $50 each time they refer a new user to AOL
even though the user only signed up for a free trial and didn’t pay anything at all.

Or the user may have to refer a certain number of “friends” who in turn, refer others
or perhaps sign up for a “free trial” membership to a certain vender.

Oftentimes the user who is trying to earn a FREE gift gives up for one reason or another
before getting the required number of referrals. In this case the company collects some
commissions and doesn’t have to send the user anything, so it’s pure profit.

This is how they make money and can afford to give away free products
and still make a profit for themselves. Some of them actually make quite a bit
of profit.

Just ask the guys from Google.

TAGS: advertising, Adwords, AOL, Asense, Digital Camera, FREE stuff, Google, incentive marketing, iPod, Laptop, Plasma TV

This entry was posted on Thursday, October 4th, 2007 at 2:25 am and is filed under Misc.. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.