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The Fourth Law of Marketing in the age of Zipfluence: Free is expensive

Marketing and communication is a simple business. It is all about using storytelling to modify market behaviour.

However the cost of igniting the collective imagination of the market comes at a price. The cost of achieving growth using network effects comes at a price. The cost of modifying customer behaviour comes at a price. Gaming the market in your favour comes at a price.

At least is was.

Today the market is delighted to learn that this price is now FREE

Yes. Thanks to the wonders of social media, the Internet, six degrees of separation, Metcalfe's Law and the expotential power of network effects. You can scale your business for free.

Think of it as the new streamlining of the network age. A new way of doing business.

The problem is the grand narrative of FREE doesn't stand up to mathematical scrutiny

The big data reveals those companies embracing the anti-marketing mantra spend significantly more on sales and marketing as a percentage of revenues than the market average.

Sales and Marketing Spend vs R&D Spend as a % of Revenues

To understand just how much more expensive the Free media and communications model is - not only to the buyer but also the supplier of Free media - one need only take a quick look at the amount of money that has been invested over the past two decades in funding the disruption of the mainstream media in the USA and around the world.

Investment in Digital Media 1990-2014

The reason being, somewhat pardoxically, the cost of Free is priced at a premium.

The premium being, no longer the cost of broadcasting your message, but the cost of attracting and retaining an audience willing to interact with your message.

Think of it as Zipfluence. Those fleeting moments when the connected world chooses to spend their time with you.

That shared moment when it's all about you, looking at me, looking at you.

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