For instance, what if advertising followed the same trend of decentralization as other commercial sectors have? What if customers created, placed, and paid for ads?
Here is one way to think of this strange arrangement. Each enterprise that is supported by advertising—which is currently the majority of internet companies—needs to convince advertisers to place their ads with them in particular. The argument a publisher, conference, blog, or platform makes to companies is that no one else can reach the particular audience they reach, or reach them within as good a relationship. The advertisers have the money, so they are picky about who gets to run their ads. While a publication will try to persuade the most desirable advertisers, the publications don’t get to select which ads run. The advertisers, or their agents, do. A magazine fat with ads or a TV show crammed with commercials usually considers itself lucky to have been picked as the vehicle for the ads.
But what if anyone with an audience could choose the particular ads they wanted to display, without having to ask permission? Say you saw a really cool commercial for a running shoe and you wanted to include it in your stream—and get paid for it just as a TV station would. What if any platform could simply gather the best ads that appealed to them and then were paid for the ones they ran—and were watched—according to the quality and quantity of traffic brought to them? Ads that were videos, still images, audio files would contain embedded codes that kept track of where they were shown and how often they were viewed, so that no matter how often they were copied, the host at the time would get paid. The very best thing that can happen to an ad is that it goes viral, getting placed and replayed on as many platforms as possible. Because an ad played on your site might generate some revenue for your site, you’ll be on the lookout for memorable ads to host. Imagine a Pinterest board that collected ads. Any ad in the collection that was played or viewed by readers would generate revenue for the collector. If done well, the audience might come not only for cool content but for cool ads—in the way millions of people show up for the Super Bowl on TV in large part to watch the commercials.
The result would create a platform that curated ads as well as content. Editors would spend as much time hunting down unknown, little-seen, attention-focusing ads as they might spend on finding news articles. However, wildly popular ads may not pay as much as niche ads. Obnoxious ads might pay more than humorous ones. So there will be a trade-off between cool-looking ads that make no money versus square but profitable ones. And of course, fun, high-paying ads would be likely shown a lot, both decreasing their coolness and probably decreasing their price. There might be magazines/publications/online websites that contained nothing but artfully arranged ads—and they would make money. There are websites today that feature only movie trailers or great commercials, but they don’t earn anything from the sources for hosting them. Soon enough they will.
This arrangement completely reverses the power of the established ad industry. Like Uber and other decentralized systems, it takes what was once a highly refined job performed by a few professionals and spreads it across a peer-to-peer network of amateurs. No advertising professional in 2016 believes it could work, and even reasonable people think it sounds crazy, but one thing we know about the last 30 years is that seemingly impossible things can be accomplished by peers of amateurs when connected smartly.
A couple of maverick startups in 2016 are trying to disrupt the current attention system, but it may take a number of tries before some of the radical new modes stick. The missing piece between this fantasy and reality is the technology to track the visits, to weed out fraud, and quantify the attention that a replicating ad gets, and then to exchange this data securely in order to make a correct payment. This is a computational job for a large multisided platform such as Google or Facebook. It would require a lot of regulation because the money would attract fraudsters and creative spammers. But once the system was up and running, advertisers would release ads to virally zip around the web. You catch one and embed it in a site. It then triggers a payment if a reader clicks on it.
This new regime puts the advertisers in a unique position. Ad creators no longer control where an ad will show up. This uncertainty would need to be compensated in some way by the ad’s construction. Some would be designed to replicate quickly and to induce action (purchases) by the viewers. Other ads may be designed to sit monumentally where they are, not travel, and to slowly affect branding. Since an ad could, in theory, be used like an editorial, it might resemble editorial material. Not all ads would be released into the wilds. Some, if not many, ads might be saved for traditional directed placement (making them rare). The success of this system would only prosper in addition to, and layered on top of, the traditional advertising modes.
The tide of decentralization floods every corner. If amateurs can place ads, why can’t the customers and fans create the ads themselves? Technology may be able to support a peer-to-peer ad creation network.
A couple of companies have experimented with limited versions of user-created ads. Doritos solicited customer-generated video commercials to be aired on the 2006 Super Bowl. It received 2,000 video ads and more than 2 million people voted on the best, which was aired. Every year since then it has received on average 5,000 user-made submissions. Doritos now awards $1 million to the winner, which is far less than what professional ads cost. In 2006, GM solicited user-created ads for its Chevy Tahoe SUV and received 21,000 of them (4,000 were negative ads complaining about SUVs). These examples are limited because the only ads that ran had to be approved and processed through company headquarters, which is not truly peer to peer.
A fully decentralized peer-to-peer user-generated crowdsourced ad network would let users create ads, and then let user-publishers choose which ads they wanted to place on their site. Those user-generated ads that actually produced clicks would be kept and/or shared. Those that weren’t effective would be dropped. Users would become ad agencies, as they have become everything else. Just as there are amateurs making their living shooting stock photos or working tiny spreads on eBay auctions, there will surely be many folks who will earn a living churning out endless variations of ads for mortgages.
I mean, really, who would you rather make your ads? Would you rather employ the expensive studio pros who come up with a single campaign using their best guess, or a thousand creative kids endlessly tweaking and testing their ads of your product? As always, it will be a dilemma for the crowd: Should they work on an ad for a reliable bestseller—and try to better a thousand others with the same idea—or go for the long tail, where you might have an unknown product all to yourself if you get it right? Fans of products would love to create ads for it. Naturally they believe no one else knows it as well as they do, and that the current ads (if any) are lame, so they will be confident and willing to do a better job.
How realistic is it to expect big companies to let go of their advertising? Not very. Big companies are not going to be the first to do this. It will take many years of brash upstarts with small to no advertising budgets who have little to lose figuring this out. As with AdSense, big is not where the leverage is. Rather this new corner of ad space liberates the small to middle—a billion businesses who would have never thought of, let alone ever got around to, developing a cool advertising campaign. With a peer-to-peer system, these ads would be created by passionate (and greedy) users and unleashed virally into the blog wilds, where the best ads would evolve by testing and redesign until they were effective.