Another thing that is common on the Internet is the distribution of shareware, software that people can try out for a period of time or that is crippled in some way. Sometimes, shareware is actually the full product, with the author relying on the honor system for payment.
Usually we do not think of shareware as advertising, but it is. Shareware is akin to the free samples that companies offer, so that consumers can try before they buy. By allowing the consumer to try the product, the company gains many benefits: the consumer knows the name of the product, the product's use, potential good word-of-mouth, etc.
Other types of products also engage in this shareware concept to advertise their products. Newspapers and magazines, for example, sometimes provide only certain sections for free to online readers. However, most of them now offer full editorial content online (and faster than print versions) because they can rely on online advertising revenue to support their websites.
Car companies can offer virtual reality views of the cars and virtual test drives. How about visiting a place online before committing to actual traveling expenses?
Before the Internet, other types of media could not hope to have this level of interactivity and this ability for product demonstration to offer potential advertisers. Advertising on the Internet is cheap and cost-effective. Armed with a long list of e-mail addresses, spammers can flood cyberspace with millions of e-mails touting products (and starting the occasional flame war or anti-spamming campaign). Maintaining a server for websites and e-mail for a year is less expensive than a one-time full-page ad in any national newspaper or magazine.
This low-cost distribution avenue may be why shareware authors can afford to offer very low prices for their software. Shareware distribution has some of the benefits of electronic commerce along with its cheap distribution and start-up costs. id Software, for example, the creator of such smash hits as Doom and Quake, started out as a shareware operation. They distribute only the first episode of their games to BBS and Internet sites. With gamers hungry to finish the other episodes and ponying up the money to satiate their ravenous desires, id Software became a successful company.