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The Potential of Pay-the-Buyer Advertising

If you type "auto insurance" into Google and then click on an advertiser's sponsored link, the advertiser pays Google 32.76* for your click.

That's right: $32.76 for a single click. Click the top three links and Google receives around $98.28.

Can that situation last? Isn't it more logical and economically sensible to pay the prospects themselves?

It may be more sensible but it hasn't worked thus far. When companies, such as Cybergold and AllAdvantage, have tried pay-the-searcher or pay-the-prospect models, non-buyers have taken 99% of the money. These models have failed because there has been no way for advertisers to differentiate between clickers who are buyers and clickers who are there just to take the money.

Now that has changed. Paybuyer introduces a system that enables advertisers to pay imminent buyers, and only imminent buyers, for their attention, in a user-friendly way.

This system is completely unlike other pay-money-for-attention systems, which basically provide conventional rebates (see, for instance, Microsoft's cashback Live Search). In rebate systems, one must buy from an advetiser to receive a "payment" from that advertiser, which means that the payment offer is actually a kind of automated coupon.

By contrast, the Paybuyer system provides large payments just for attention, with NO obligation to purchase from any advertiser.

To see why a Paybuyer-type system is necessary, in most cases, to pay prospects meaningful amounts of money for their attention, read our White Paper.

We are at the dawn of pay-the-buyer advertising, which may become the standard method of reaching people with commercial messages. To see why, read the pieces below.

*Source: Google keyord tool on December 1, 2008. This figure has been fairly steady for the past year.