New ad model.
Paybuyer is the first practical, general system for paying buyers, and only buyers, to call advertisers and view ads.
In addition, it's a new search model that can replace today's pay-the-search-engine model. To see why, consider an example: if you enter "auto insurance" into Google and click the top link, the advertiser pays Google ~$45. Click the 3 top links and Google gets ~$135. Wouldn't real buyers, the real targets of advertisers, rather take that money if they could? Sure they would.
It certainly makes economic sense for advertisers to pay buyers money for their attention before purchases. Yet, it hasn't happened on a wide scale. Why not?
Well, when companies, such as Cybergold and AllAdvantage, have tried pay-ad models, non-buyers have taken 99% of the money. In other words, pay-ad models failed because there was no efficient way to identify and pay only buyers.
Now that's changed. Paybuyer lets advertisers give buyers, and only buyers, money for their attention. Crucially, the payments are just for attention - the buyers have no obligation to purchase from any advertiser.
How does it work?
Paybuyer uses probabilistic payment, aka payment with electronic lottery tickets, which is the most efficient of all micropayment methods, as Rivest has pointed out.
Paybuyer asks users what they plan to buy and then enables relevant sellers to pay those users for calling. The lottery tickets that users are given as payment have an explicit expected value and a definite money prize.
The key to the system is this: only buyers can collect the prize money. For example, users who say they plan to buy auto insurance will receive tickets from auto insurers. Almost all these tickets will be losers. But, when a user's ticket is a winner, she can collect the prize if she provides a copy of her receipt, proving that she bought auto insurance, after her search. The user herself can set the prize large enough that it induces her to provide the receipt. If she provides it, Paybuyer verifies it, and gives her the prize.
Thus, the system combines efficient probabilistic payments with efficient probabilistic verification of purchases, ensuring that only buyers receive definite, cash money.
More efficient targeting.
We call this technology verification-based, pay-the-buyer targeting. It's far more accurate than current targeting methods (contextual, behavioral, demographic, geo, and search) because they're prediction-based. Prediction methods increase the probability that an advertiser will reach a buyer, "the right person at the right place at the right time." But, prediction is only a guess. Verification is a guarantee.