We lost the ability to effectively use CPC search marketing (google). When we had a free trial, it was easy to see which clicks were worth paying for. But with freemium, the conversion funnel was so long (average of nearly a year before the person needed more storage) that any attempt to optimize price per conversion was hopeless. (Try adjusting the shower temperature with a 12 month delay between knob and temperature change and see how it goes for you. In control theory parlance, this is known as introducing a delay in the feedback loop)
It's very interesting. Anyone used to CPC lives in a world of certainty. That kind of certainty has rarely existed in marketing. The problem with that kind of certainty is that taking out risks eventually takes out returns. If you are selling a dropshipped commodity good, margins drop (cpc bids go up, prices go down) to more or less 0.
Freemium on the other hand, slots conveniently into the old world of TV campaigns & billboards. You have no idea if you did good or not. That kind of risk keeps out the number of competitors needed for 0 margins.
We lost the ability to effectively use CPC search marketing (google). When we had a free trial, it was easy to see which clicks were worth paying for. But with freemium, the conversion funnel was so long (average of nearly a year before the person needed more storage) that any attempt to optimize price per conversion was hopeless. (Try adjusting the shower temperature with a 12 month delay between knob and temperature change and see how it goes for you. In control theory parlance, this is known as introducing a delay in the feedback loop)
It's very interesting. Anyone used to CPC lives in a world of certainty. That kind of certainty has rarely existed in marketing. The problem with that kind of certainty is that taking out risks eventually takes out returns. If you are selling a dropshipped commodity good, margins drop (cpc bids go up, prices go down) to more or less 0.
Freemium on the other hand, slots conveniently into the old world of TV campaigns & billboards. You have no idea if you did good or not. That kind of risk keeps out the number of competitors needed for 0 margins.