“Incentive Marketing” or “Referral Marketing” are good things to google if you’re interested in reading up on these particular techniques.
While it can be (and is) used legitimately, I’ve spent many an hour navigating through the bowels of such sites as http://www.rewardbull.com/ and http://www.anything4free.com/ investigating the system on behalf of a company that utilized such techniques.
As someone already mentioned, these systems can work very much like a pyramid scheme. “Free” is a very loose definition to apply to anything that one might “earn” in such a system.
Their business model is to milk you as a data point by requiring an endless series of survey questions, and then plunge you through a series of “optional” advertisements that you can only determine are optional by reading the fine print back on the original site where you entered the crazy marketing maze in the first place, then they send you back through another round or two of surveys, then more ads, then more surveys, then you come to a series of required offers.
Sometimes you only have to pick one of three offers to purchase goods or services, or perhaps sign up for a “free trial” that will turn into a premium account unless you cancel by a certain date in a particular manner. Sometimes you can choose to sign up for a premium service that is either pre-paid, or whatever your “free gift” is that you’re trying for will be held until you live up to the minimum amount of months of paying for whatever “discounted” service that you agreed to buy (all of this, again, is listed in the fine print).
Basically, imho, a company spending marketing dollars on such a system is paying for exposure to the network of users in such a system which will drive both direct and indirect traffic to their site, exposing those users to their banner ads and such while also securing them a certain number of new paying users who have to pay a monthly fee for a required duration (3 months is common) or pre-pay for a year perhaps. A certain percentage of this traffic will result in loyal customers actually purchasing something over many months, or perhaps returning to spend money again in the future.
But, (also imho) what goes on most of the time is people gaming the system as much as possible (and often fraudulently, but I shan’t be discussing how they do so), and a lot of housewives who have way too much time on their hands.