Here’s a link to a Marketplace radio commentary that aired yesterday in which I argue that search engines should give you a cut of their ad revenue when you click through on an ad. Microsoft’s cashback system pays you if you click through and buy. But just the act of consuming the ad should have some value even if you don’t buy.
We’re used to thinking of Paypal and Google checkout as micro-payment services, but they can also become micro-compensation services. If you watch a commercial on Google TV, Google could credit your account.
I’ve written a (long) academic article showing how compensated calling could be easily incorporated into the current “do not call” regs — so that you could even set whatever price you wanted to listen to telemarketing calls. (I’ve also published OpEds on the idea here and here.) Instead of making an all-or-nothing choice about whether to block all telemarketing calls, a lot of consumers would prefer to set an intermediate price and just block those calls that aren’t willing to pay their price.
Compensated advertising fits perfectly with Google’s revolutionary model. It gives advertisers even better incentives to make ads relevant for specific consumers. Compensated ads are literally valuable.
Of course you have to worry about moral hazard. Some consumers will insincerely click through just to get the compensation. But advertisers have simple counter strategies to limit these shenanigans — such as limiting the total compensation or blocking consumers who click but never buy.
A bunch of other firms besides Microsoft have started down this path. After my commentary aired, I got an email from the president of mindshare.com. Mindshare will compensate you if you click through on their ads (but it seems you have to accumulate $100 before you can actually retrieve your compensation).
The big question is whether larger services — like Yahoo or Microsoft — will push Google toward a system where consumers can trade their attentions for dollars.
Microsoft’s cashback service is an important step in the right direction.
and 
. You can also watch it on 
I remember back in 99 or so, there was a program that paid you for having a small banner on. The banner would have ads, and you were paid so much each minute you had it running.
Once in a while, you would have to click on it to verify you were still there and not just running the program all day.
Isn’t getting to view the content of almost every web site for free enough compensation?
I remember the program, and how the company that made it is now defunct because people would cheat the system with bots. How is “compensated advertising” like this not just coupons, which have been around online and off forever? Doesn’t seem that revolutionary.
@ Steve, #2
No. I should be allowed to make any demands I want of advertisers, and they should compensate me according to their budgets. It’s how it’s always worked.
http://www.youtube.com/clintosterholz
I’m pretty sure they already do – in the form of well built and well maintained applications like gmail, google calendar, google earth, etc.
No thanks. I consider advertising a cancer to the human imagination; virulent and destructive. “Reality Television” is only the most recent incarnation of the impending death of commercialized television. Services like TiVO and online websites that cut commercials proves— people hate commercials.
@2: Steve- a fundamental truth about information… it is free until someone puts a price tag on it. Then its called extortion. The unimaginable gains of the Internet are based upon treating information as free.
I do not tolerate any one I do not know calling me, especially if they are hocking some POS.
As an advertiser, I would never want to advertise on a service that paid people that way. I just wouldn’t feel comfortable with it. I don’t think it would work unless they paid people just to use their search engine exclusively and not per click or per viewing.
I’m not sure I agree.
I’d rather have Google keep the aggregated revenue and continue to innovate and bring us great (free) products than a bit of extra pocket change.
If you really think revenue-share for ads is a good idea, maybe Freakonomics should take the first steps and implement a revenue-share with readers who click on those Liberty Mutual ads…