Freebies always fail. They do not convert and produce profit. They are a liability. They are a burden. They waste money and suck blood. Never attract freebies lookers.
You'd be surprised. Whether the vendor is playing the numbers hoping for a conversion rate of those who will indirectly spend money, or just doing a giveaway for the sake of building their brand, freebies can be an amazing way of marketing.
Some examples...
Lotus notes promotes themselves as a largely free product, with a premium that requires payment. To quote what their CEO Phil Libin said in a recent issue of Fast Company magazine; "The easiest way to get 1 million people paying is to get 1 billion people using."
Flickr has multiple restrictions on what you can do without paying for a membership, and as a result, have tons of paying users, while still earning money off of ads.
In 2009, McDonalds started giving away coffee with breakfast in the morning. The percentage of McDonalds coffee cups I see now is significantly higher than what it was before that.
It may be a liability in the first place. However, people looking for a deal (i.e. to spend as little as possible) are still looking to spend money in some way. In McDonalds' case, that worked out perfectly because now more people are going to McDonalds for coffee, which is the perfect pretext to sell other breakfast foods.
By doing that online, they could limit the giveaway to those who opted-in to their newsletter, which is even more advertising opportunity to get more paying customers in. It's really a minimal investment once you have broadcasted your brand to so many new people.
