## The Paradox of Advertising

The paradox of advertising is that the "consumers" of advertising avoid it as much as they can, mostly because it lacks relevance and credibility, whereas business owners often depend on advertising to make those same consumers aware of whatever it is that the business is selling and why the consumers might want to buy it. In the case of Internet advertising, web surfers develop "ad-blindness", a condition which enables them to read pages on a website as though the advertisements weren't there at all, or, failing that, they install ad-blocking software.

In a previous article I introduced the idea of Transparent Paid Reviews. These are reviews where an advertiser would pay a website owner to review whatever was being advertised. However, after writing that article, I realised that this scheme probably wouldn't work. One problem is that the reviewer must be paid an hourly rate for their reviews, if the reviews are to be seen as written by a credibly disinterested party, yet this eliminates the opportunity for a website owner to make big money by leveraging a high rate of page views. This conflicts with the standard website money-making-from-advertising plan: "I can get a million page views a month, sell advertising for 1 cent per page view, and live off the proceeds." (Or maybe 100,000 page views a month, and sell for 10 cents per page view.)

## Plan B

So, how can we mix traditional pay-per-view advertising with host-recommended credibility?

An example of exactly what you don't want to do is the recent problem that MySpace had with ad banners that attempted to infect users' computers with spyware. This kind of advertising is more than just annoying and lacking in credibility – it's a positive threat to its targets, i.e. the readers of the host's website.

This suggests a first step in the road to "good" advertising (that readers might actually want to read): make some effort to ensure that your advertisers are not "evil".

## What Honest Advertising Businesses Really Want

Can we extend the idea of preventing "evil" by making (as a website host) some small effort to actually guarantee "goodness" in advertising?

Many "non-evil" advertisers just want a chance to state what they have to offer. They know that consumers can't be expected to believe claims about some unknown business that they read inside a banner area, but the real problem is that consumers don't even bother to read the advertising at all, because they don't believe that it is worth the time and effort required to verify the claims made within advertisements. The most profitable advertising tends to be that which intentionally maximises exploitation of the most gullible "targets", and this tendency has the effect of reducing the expected value of advertising to all the other readers (who aren't gullible) to zero.

Perhaps this problem can be solved, to the mutual advantage of website host, advertiser and reader, if the website host plays a minimal role as a "credibility" go-between.

## "Pre-Investigation"

One way to do this would be for the website host to "pre-investigate" their advertisers. This pre-investigation would involve taking minimal steps to find out what the advertisement is for, who would be interested in it, what the advertiser claims to do, how much it costs etc, etc. The host could enter into minor correspondence with the advertiser, asking investigatory questions, and recording the answers. The details and results of the investigations could be placed on the page which each advertisement links to, and only on this page would there be a link to the advertiser's own website. The advertising host would stake their reputation not on the integrity and value of the businesses being advertised, but rather on the quality of their pre-investigation effort in each case. By doing so, they would be giving their readers more reason to consider at least reading the content of advertisements on their website.

## Determining Payment

The prevalence of "click-fraud" emphasises that there is no easy mechanical way to determine the value of advertising. Unfortunately this implies that if an advertising host makes an effort to increase the credibility of advertising on their site by means of "pre-investigation", then there will be no easy way to quantify the value of this effort. And, conversely, it will be very difficult for advertisers to prove anything (to a website host) about the value that they do or do not receive from those efforts.

Much as we would like to automate the rate-setting process, we can't. The best way to determine "fair" advertising rates involves mutual negotiation and long-term partnerships. In other words, each party sets a rate (to pay or to be paid), and if the rates match, then the transaction goes ahead – the website host places the advertising on their website, and the advertiser pays the agreed rate (and each party should retain the right to regularly renegotiate the rate at some specified interval). The advertiser determines what rate they wish to pay based on the quality of the referrals that they receive from the website advertisements; the website host determines the rate that they wish to charge based on their perception of how much effort they have put into the pre-investigation, the number and quality of their page views and their general perception of conditions in the advertising market.

## Why Have Advertising At All?

Even with this new scheme, I probably still haven't solved the "problem" of advertising, but I don't think that the problem is going to go away. Internet technologies make it too easy for website readers to ignore adverts, so something has to be done to make people want to read adverts. And this something, whatever it is, has to involve creating a perception of credibility, value and ROI on the mental effort required to evaluate advertising claims.

It may be that all advertising is pointless – that if we were all just left to spend our money without being told how to by advertisers, we would make better decisions. But this probably isn't true, because many of the decisions that we currently make (which we assume are quite good decisions) are based on spending opportunities that have been brought to our attention in the past by some kind of advertising. Even when we get information about what is worth spending money on by word of mouth (from our friends and acquaintances), an initial advertising effort has been made so that at least someone knows about the thing being advertised.

And word of mouth isn't sufficient if the the members of a market for a new product or service are dispersed thinly and not very well-known to each other. Often when we do have new information about something that we found to be worth buying, we don't bother to volunteer that information to our friends and acquaintances anyway. It's almost as though we want to leave it up to advertisers to do the hard work of convincing customers to buy their products and services.

## Plan C

Various voting-based social bookmarking sites such as Digg, Reddit and Delicious seem to do a good job of highlighting new web content which is worthy of the effort required to look at it. Perhaps this principle could be extended to a site oriented towards good ways of spending your money: advertisers and other site users would write articles about new and interesting ways to spend money, and everyone would vote for what they think are the best of those stories.

So that could be the final "Future of Advertising": voting-driven social how-to-spend-your-money bookmarking.