Editor’s note: This article was first published in July 2012, and its examples, Publipapel’s advertising on bread bags and the free daily newspaper 20minutos, are described as they operated then; either may have changed since.
The business model on the internet basically consists of offering users a product for free and making money from advertisers. Thanks to advertising, Facebook and Google run two of the most profitable businesses on the web. But how can we adapt this business model to businesses outside the internet?
The other day I heard about an American entrepreneur who had a business idea. His business consists of supplying takeaway coffee cups to coffee shops and companies completely free of charge. So where is the business? It lies in the advertising printed on the coffee cup.
This entrepreneur knows that we are becoming more and more immune to advertising in magazines, newspapers and on television. If you are drinking a coffee, on the other hand, you can hardly miss the ad, because you are holding it in your hand.
Clearly, the owner of a coffee shop will be more than grateful to receive the cups for free, since it is an expense he saves, especially if he usually sells a lot of takeaway coffee every day. The hardest part is probably finding the advertisers, a task this man devoted himself to for some time until he reached revenue of $300,000 in his second year.
Publipapel
The other day I came across the Spanish company Publipapel. Its business system is similar, although in this case it prints advertising on bread bags, under the slogan “Your advertising on the customer’s table”.
Advertising on pizza boxes
This business idea has been around for a while. I don’t remember the name of the first person who did it, but I remember his story. A man worked out how much large pizza chains such as Pizza Hut might be spending on pizza boxes. It came to about $200,000, so he reached an agreement with them: he would supply the pizza boxes completely free of charge, leaving the outside of the box untouched, on condition that he could use the inside of the lid, which, after all, is the part a customer buying a pizza looks at most.
The result of this entrepreneur’s experiment was profits of more than $1 million in the first year, thanks to the income from advertisers.
So, can you offer something for free and make money from it? As long as you have advertisers, it is quite possible.
Without looking any further, advertisers make it possible for a newspaper like 20minutos.es (a Spanish daily) to exist and be distributed free of charge. They are also what keeps alive the hundreds of themed guides we receive at home.
An advertiser only wants to invest in advertising that pays off, that is, to pay for its company to appear somewhere visible and, if possible, reach potential customers for its product.
Now it is a matter of opening your mind to think of formats or products that nobody has thought of yet and that could work well as advertising media for advertisers: shopping bags from large supermarket chains, giving away school supplies with some kind of advertising printed on them, or even creating strategic alliances between companies to include discount vouchers with certain products…
Featured image: Pete Bellis petebellis, CC0 1.0, via Wikimedia Commons.
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