Pay-the-Buyer Advertising
New Ad Model
The Paybuyer Model enables advertisers to pay imminent buyers to visit webpages and call before purchases.
In the Paybuyer Model, advertisers pay searchers with the world's most efficient payments, electronic lottery tickets (probabilistic payments), that are valid only if the recipients are buyers.
Below we explain its fundamental advantages over other ad models and how it works.
One prefatory note: This initial version of Paybuyer does not use explicit expected value payments. Crucially, it's still a pay-the-buyer model, using probabilistic verification of purchases.
Paying Searchers When They're Valuable Enough to Pay
Many payment-for-attention ad models have been tried. All have all missed a critical fact: the only time advertisers can pay people much for their attention is when those people are ready to buy what the advertisers sell. In that rare period of time, prospects are worth 10x - 1,000x more than normal, and advertisers can often pay them multiple dollars to visit websites and call.
Conventional pay-ad models, past and present (e.g., AllAdvantage, Bing Rewards, Brave Rewards, and Invisibly), can't identify buyers, so their payments per ad are trivial.
Paybuyer's model is different:
- It lets users tell advertisers when they're ready to buy a particular product or service.
- It lets advertisers pay only those briefly valuable users real money for their attention.
- It verifies that only real buyers get paid.
That's why advertiser payments can be 10x to 1,000x more than in any other pay-ad model.
Two Paradigm Shifts
The Paybuyer search model combines two potential paradigm shifts in the world of advertising.
One, the model enables advertisers to pay buyers and only buyers, as in a rebate. Crucially, though, the payments are not rebates; they are just for attention. A buyer can be paid by multiple advertisers before a purchase with no obligation to purchase from any advertiser.
Two, the model uses novel, verification-based targeting.
Almost all the ads you're exposed to are placed in front of you by prediction-based targeting via systems that attempt to identify buyers. For example, Facebook and Google might record that you've viewed pages about surfing and then serve you ads about surfboards. Or, when you search for surfboards on Google, Google might display ads for surfboards. But, Facebook and Google can't guarantee you're going to buy a surfboard soon.
By contrast, Paybuyer lets advertisers select imminent buyer targets, say, people who are going to buy surfboards in the next 7 days. Then it probabilistically verifies purchases to ensure that the advertisers only pay for reaching their selected targets, i.e., people who actually buy surfboards within 7 days after visiting the advertiser's site.
Verification-Based Targeting Is More Accurate Than Prediction-Based
Contextual, behavioral, demographic, geo, and search targeting increase the probability that an advertiser will reach a buyer, "the right person at the right place at the right time." But, prediction is a guess. Verification is a guarantee.
How Does It Work?
Paybuyer asks a user what she plans to buy and lets advertisers who sell that product or service pay her conditionally for visiting their webpages and calling.
She isn't paid with cash. Instead, she's paid with electronic lottery tickets that have an explicit expected value and a cash prize.
The condition of payment is that each ticket is valid only if the user buys what she said she was planning to buy from the advertiser or from a competitor.
The key to the model is that only buyers with winning tickets can collect the prize money.
Imagine Sally says she's going to buy plumbing services in Denver in the next 7 days and finds rotorooter.com on Paybuyer.
She clicks on Roto-Rooter's link and is credited with an electronic lottery ticket.
8 days later, the result of the ticket is revealed, WINNER or LOSER:
- If her ticket is a LOSER, it's worth $0.
- If her ticket is a WINNER, and she was not a buyer, it's worth $0.
- If her ticket is a WINNER, and she was a real buyer who hired a plumber, she can submit proof of purchase to collect the ticket's cash prize.
Only winning tickets lead to proof of purchase and a cash payment to a buyer.
Thus, the Paybuyer Model routes advertiser cash to buyers and only buyers.
Why Not Verify Every Purchase? Why Probabilistic Payment and Verification?
Right now, there's no way to verify most purchases without having buyers submit a copy of their receipt. Most people don't want to submit proof of purchase to collect 50ยข or $1 or some other small amount. Also, labor is involved in checking the proof of purchase.
Therefore, the Paybuyer model verifies probabilistically, which is hyper-efficient, and uses probabilistic payments so that the prize amounts are enough to make it worthwhile for buyers to submit proof of purchase.
Another advantage is that buyers are only alerted when they win.
The pilot version of Paybuyer uses fixed prize levels, but in the future users will enter the prize they want and the odds of winning will be adjusted accordingly.
How Much Will Advertisers Pay Buyers?
If the Paybuyer model achieves success, it's not clear how much buyers will be paid per purchase. The range of possibilities is wide.
Since multiple advertisers can pay a buyer for her attention, buyers should receive 1%-25% of a purchase amount in total attention-payments. The total will depend on the market.
In some markets, the individual attention-payments might be quite small, yet still create an efficient communications channel between advertisers and buyers that is preferable to the high-cost channels created by today's dominant ad platforms and e-marketplaces.
