The logic that the user is responsible for the income of the business is abandoned. Instead, the main source of revenue comes from a third party, which cross-finances whatever free or low-priced offering attracts the users. A very common case of this model is financing through advertisement, where attracted customers are of value to the advertisers who fund the offering. This concept facilitates the idea of 'separation between revenue and customer'.
How they do it: Although regular users can use the platform for free, LinkedIn integrates targeted ads for services as well as jobs in the individual users platform experience. Hence it is able to generate revenue from both free as well as premium users.
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How they do it: YouTube’s platform, website and mobile apps are all free to use. In fact, over 5 billion videos are watched every day. In the absence of paying customers, advertisements on YouTube cross-finance the vast infrastructure needed to support YouTube’s operations.
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How they do it: SlideShare was acquired by LinkedIn in 2012. It then started to offer advertisers the opportunity to run Content Ads, which enabled them to reach a targeted audience of professionals on LinkedIn.
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How they do it: Google’s search engine is free to use for all customers. However Google monetizes its search users through providing companies targeted advertising which allows them to target exactly the customers that are looking for a certain product or service and also enables the customers to better find what they are looking for.
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How they do it: JCDecaux allows its customers to advertise in the public space. This includes street furniture, public transport and billboards. The audience of JCDecaux’ products are the people who use these services. However those people don’t pay money to JCDecaux. On the other hand JCDecaux markets the people’s attention to its clients who pay money to the company to advertise to the people. This money generates revenue for the company and pays for the physical infrastructure.
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Below, the top industries for the pattern "Hidden Revenue" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Below, the pattern "Hidden Revenue" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
