This document discusses monetization models for offerings that are initially free. It argues that to be successful, offerings need to both solve customer pains and bring in revenue. Common monetization strategies for free offerings are discussed, including advertising, freemium models, sponsorship, and identifying who creates value from assets and how they will pay. The document provides a framework for identifying assets, who would value them, and how they would pay through various monetization strategies like purchases, subscriptions, licensing, and others. It emphasizes taking a broad view of potential assets and parties that could find value in order to explore monetization opportunities.

1. Monetization Models in
The Age of “Free”
Lesley Grossblatt, Lucinda Foss,
Caitlin Smallwood & Eddy Wu

2. Pop quiz!
What is the key to a successful, sustainable offering?
A) Solving an important customer pain.
B) Bringing in revenue.
Answer:
Answer:
It’s a trick question! You need both!
It’s a trick question! You need both!

3. But how can you make money with free?
How do these “free” offerings make money?
Advertising,
Freemium Sponsorship
Licensing
Identify who you create value for and
how they’ll pay for it

4. How long has Intuit been competing with “free”?
Answer:
Always, but competing with free today
requires us to approach offerings differently

5. The starting point isn’t “free”
Monetizing “free” is about finding value
someone will pay for

6. Monetization is about value
1. What are your assets?
2. Who would value your assets?
3. How would they pay for your assets?

7. Step 1: What are your assets?
• Product features • Brand
• Technology • Reputation/goodwill
• Data • Physical space
• Content • Equipment
• People • Relationships
• Processes/know-how • …
Think as broadly as you can

8. More assets than meet the eye

9. Step 2: Who would value your assets?
• Individuals • Government
Single parents, Green Day fans US Department of Labor
• Households • Competitors
Families saving for college,
rental households in rural
areas • Advertisers
• Businesses
Online retailers, FI’s offering
payment solutions, office
supply stores
Broad as well as niche markets
may find your assets valuable –
think broadly about the ecosystem

10. Who values these assets?

11. Step 3: How would they pay?
• Purchase • Cross-Sell
• Advertising
• Free trial leading • CPM – cost per
to purchase thousand (mil) ad
impressions shown
• CPC – cost per ad click
• Subscription
• CPA – cost per new
customer acquired
• License or lease through ad
• CPL – cost per lead
• Freemium • Revenue share
Base product is free, but
you pay for additional • Sponsorship
features
One party pays for other
parties to benefit from the
asset

12. How would they pay?
Shoe Manufacturers FBI , CSI, Other Agencies Other Businesses
•Freemium: •License access to Sole Search •Subscribe to Zappos Insights
• Free access to online •Purchase Zappos Culture Book
reviews
• Subscribe to review
service

13. How can movie theaters compete in the Age of “Free”?
What are your assets? Who values assets? How would they pay?
Companies having Per-meeting, per-
Big screen
big meetings hour
+ lots of seats
Music fans who
Good sound can’t make a Admission
system live show
Films &
exclusive movies Subscription -
Film club or
experience (e.g., annual or season
Rocky Horror) pass
Audience Number of ad
Advertisers
(Coke, Orville impressions on
Concessions & containers
cups Redenbacher)
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14. How can you monetize free FAFSA?
Challenge:
Idea is a winner (NP score: 58),
but we can’t charge for it
What are your assets? Who values assets? How would they pay?
Data on lots of Student loan lenders, Purchase mailing list of
students about to go to computer sellers, office students
college supply stores
Lots of FAFSA’s + College financial aid Pay licensing fee for data
parents’ verified tax officers
information
Goodwill for providing Students’ parents Purchase other Intuit
free service products such as
Quicken, TurboTax
14

15. Exploring 3rd Party Pays in QOL
Quicken Online Hypothesis:
Advertisers will value and
pay for these assets. How?
1. Advertisers will pay to
display ads in on QOL.
$3MM opportunity
2. Intuit can serve both
advertisers and users by
personalizing discounts
based on spending data.
• >1MM users
• Data on millions of transactions $20MM opportunity
Use quick experiments to test and
validate your monetization hypotheses
15

16. Models change over time
Technology and business innovation
can change the equation rapidly
Keep revisiting your assumptions –
play offense with your monetization strategy

17. Let’s find the value . . .
In your team, discuss a product/service:
1. Brainstorm all the possible assets this product/service has –
think broadly!
2. For each possible asset, who would value it? How? Why?
3. How would these parties pay for this value?
What are your assets? Who values assets? How would they pay ?

18. Cheat Sheet – Finding Value
What are your assets? Who values these assets? How would they pay?
• Product features • Individuals • Purchase
Direct payment for value
• Content • Households
• Free trial
• Data • Businesses
• Subscription
• Technology • Government
• Freemium
• People • Competitors
• Pay for success
• Processes/know-how • Advertisers
• License or Lease
• Brand • Etc.
• Revenue Share
• Reputation/goodwill
• Cross-sell
• Physical space
• Sponsorship
• Equipment
• Etc.
• Relationships
• Etc.