Pay-the-Buyer Advertising

New ad model.

Paybuyer is the first practical, general system for enabling advertisers to pay buyers, and only buyers, to visit websites, view ads, and call.

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 "car insurance" into Google and click the top link, the advertiser pays Google over $50. Click the 3 top links and Google gets ~$150. 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 AllAdvantage, have tried pay-ad models, non-buyers have taken 99% of the money. Pay-ad models failed because there was no efficient way to identify and pay only buyers.

Now that's changed. Paybuyer screens for buyers efficiently. And, crucially, the payments are just for attention; buyers have no obligation to purchase from any advertiser.

How does it work?

Paybuyer asks a user what she plans to buy and enables sellers to pay her conditionally for visiting webpages and calling. The condition of payment is that, after she clicks on a seller's link, she must buy what she said she was planning to buy, from the seller or a competitor.

Users are paid with electronic lottery tickets that have a specified expected value. This form of payment, probabilistic payment, is the most efficient micropayment method known.

The key to the system is that only buyers with winning tickets who provide proof of purchase can collect the prize money. Thus, purchases are rarely checked.

Imagine Sally says she's going to buy plumbing services and finds Roto-Rooter's link on Paybuyer. She clicks on the link and, for going to rotorooter.com, she is credited with a conditional lottery ticket worth $.50.

She uses that $.50 to play Double-or-Nothing as many times as she likes. She can run up the prize to a level ($1, $2, $4, $8, $16, $32, $64, $128...) that makes it worth her while to submit her receipt, proving she purchased plumbing services after going to rotorooter.com. She might want to stop at, say, $64 and collect her prize money.

Of course, the lottery process can be different than a Double-or-Nothing game. For instance, the $.50 payment could be a 1/100 chance to win $50 or a 1/1,000 chance to win $500.

Now, if Sally loses, as she usually will, she doesn't provide proof of purchase. Only winning tickets lead to proof of purchase. Thus, just a small fraction of purchases are verified, which is vastly more efficient, private, and user-friendly than checking every one.

Probabilistic payment and purchase verification efficiently ensure that only buyers receive cash.

Paying searchers when they're valuable enough to pay.

Many payment-for-attention models have been proposed. They all miss one critical fact: the only time advertisers can afford to pay people a lot for their attention is when those people are ready to buy what the advertisers sell. In that brief period, prospects are worth the most, by far, and advertisers can often pay them multiple dollars to visit websites, view ads, and call.

The Paybuyer model lets people tell advertisers when they're ready-to-buy, and lets advertisers pay those briefly valuable prospects non-trivial amounts of money for their attention.

Verification-based targeting is more accurate than prediction-based.

Verification-based pay-the-buyer targeting is far more accurate than current targeting methods (contextual, behavioral, demographic, geo, and search) because they're prediction-based. They 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.