Re: Excerpt on SPAM from Edupage, 11 February 1997

[jim bell <jimbell@pacifier.com>]

At 11:06 AM 2/15/97 -0800, Timothy C. May wrote:
>At 10:19 AM -0600 2/15/97, Roy M. Silvernail wrote:
>
>>I much prefer the plan where a potential mail correspondant includes an
>>e-cash dollar directly cashable by me.  If I like the mail (and the
>>sender), I throw the dollar away and the sender goes on the approved
>>list.  If not, I keep the dollar, and the sender goes on the twit list.
>>Paper junk mail costs an advertiser more than $1 per piece, so they'd
>>still be getting a bargain.  And potentially, some receivers may throw
>>away the dollar and welcome the spam.
>
>The basic flaw in all of these schemes is that they are "top-down"
>solutions, imposed on the market for invented reasons.

There we must disagree.  Not that "top-down" imposed solutions won't 
generally work, I agree with that.  Rather, I suggest that there are valid 
and logical market-driven reasons that people, both buyers and sellers, 
would want to adopt the system I've proposed.

The benefits for the recipient of the payment-containing spam/advertising 
are obvious. He gets money.   Admittedly it is less obvious why a seller 
would want to pay for what he seemed to previously got for free, but that's 
more-or-less the case.   More in a moment.

[snip]

>However, just "making up" a fee--as Roy does here, and as Jim Bell and
>others have done before--is not a solution either. Nor does it stand any
>chance of being "enforced" (for a large number of reasons I won't get into
>here).
>--Tim May

Yes, the charge will be "enforced"...by the market!  Here's how.  "Spam" in 
other media is termed "advertising" or "junk mail."  And advertisers pay 
good money for it, precisely because that it will drum up enough business to 
not only pay for the ad rates, but also make some profit as well.  They're 
apparently correct, because those companies stay in business for years or 
decades.   Now, you'd probably imagine that businessmen would like to see 
the cost of their advertising drop.  Superficially, you'd be right, but in 
reality if the cost of advertising on TV or radio or newspapers is an 
essential element of the system. 

To understand why, imagine that the price of such advertising dropped by a 
factor of 100.  Suddenly, anybody doing ads could do ten times as many, for 
a tenth the total cost, or any such similar ratio.  Or thousands of 
companies whose products didn't previously profit enough for such ads would 
now be able to do them, as well.  The airwaves would be flooded. There 
wouldn't be enough time for entertainment, or news, or much of anything 
other than ads.  Worse, since total advertising revenue would probably be 
down by at least a factor of 25, even assuming "only" a 4x increase in ad 
volume, there would be far less money available for producing good shows.  
With fewer, worse shows, and many more ads, the average viewers would stay 
away in droves.   Pretty soon, the VALUE of that advertising to the 
advertiser would drop...to 1/100 of what it was before.

The newspapers would, likewise, be flooded with ads.  Even local newspapers 
would look like the Sunday New York Times.  And the current newspaper reader 
might as well stay away, because it would be a rare page that actually 
contained an article, and was not filled with ads.

Junk mail, if the TOTAL cost (paper, printing, labelling, mailing, etc) 
dropped by a factor of 100, our mailboxes would be filled with paper three 
times a day, maybe more often.

Well, actually this is not true.  There are other effects which would limit 
this progression.  For example, as ad space went up, people would watch/read 
less, so advertisers won't be motived to place ads even if they are free.  
If junk mail was free, nobody would have the time to read most of it, and it 
would go into the trash even faster than it does today.  In effect, if 
nothing else limited this advertising, our patience (or lack of it) would do 
so.  The _value_ of that advertising would drop to zero, along with its 
cost.  The end result, I argue, would be occasional low-value, sporadic 
advertising that "nobody" reads and everybody hates.

Sound familiar?  On the Internet, it's called, "spam."

Classic Internet-type spam is, essentially, a "zero-cost" ad.  Not _exactly_ 
zero cost, but pretty close, at least in terms of bare cash outlay.  What 
limits Internet-spam is that if it's overdone (or, some would argue, done at 
all!) an advertiser ends up pissing off the reader, making him even less 
likely to purchase the goods or services the spammer/advertiser was 
offering.   At that point, in effect the cost of that advertising is 
"infinite," because the outlay of zero money caused a _reduction_ in sales.  

An advertiser can't force a customer to buy, and he knows it.  But what he 
wants is the customer's time and attention, even if there's no guarantee of 
a sale.  Really, what he wants is to buy the attention of a potential 
customer, maybe only few a few seconds or a minute or so.  That's what 
advertising does.  But like an ad in a newspaper or a commercial on TV 
(which the target customer can ignore, mute, or walk away from) there is no 
guarantee of contact.  

So how, you'll ask, can the "free money with spam" deal be "enforced"?  
Well, it can't, if your definition of "enforced" includes merely the idea of 
some higher legal authority like a government or a trade organization or 
something.  But if you include the idea of the participants in the market, 
themselves, "enforcing" such a payment, it can.

Let's suppose, for simplicity's sake, that we are considering two types of 
advertisers.  One has a product that few people want.  Not NONE, just few.  
It's either poor quality, or too expensive (compared to its perceived 
value), or just not particularly interesting to the majority of the public.  
The other has a product that far more people want.  It's good, or is seen to 
be inexpensive, or is interesting.    Now, the former advertiser must put 
out far more ads to make a given buck than the latter.   The latter 
advertiser wants and needs the attention of any given potential customer 
more than the former, because the latter is far more likely to satisfy the 
customer's curiosity and desires and  be able to do business with him.  

In short, the purveyor of products that more people want (products which are 
more likely to interest the average potential advertisement reader...) can 
AFFORD to pay a larger amount of money to a given ad-recipient than can the 
other advertiser, the seller of junk.  Logic suggests that in the 
competition for "share of mind," the good-product seller would choose to 
give a larger amount of money to any given ad-recipient, in order to attract 
his attention and distinguish him from the other guy, if nothing else.  
After all, that's the one thing HE CAN DO that the other guy, statistically, 
cannot.  He can say, in effect, "My ad is more important and intersting to 
look at, and I can prove it by paying you more!"  He is also saying that he 
values you, as a customer, more than the guy who can only pay less.

Moreover, if I were a potential ad-reader, faced with the prospect of 
reading "N" ads where "N" is a larger number than I really want to see, 
presumably I would like to be able to pre-separate the ads into two groups, 
the ones I'm more likely to want to read and the other pile.  Even if I were 
to totally ignore the fact that I'm more enriched by ads which contain a 
larger payment (for example if that payment were to go (hypothetically) to a 
charity of my choice) I should STILL recognize that it is more likely that 
an interesting, useful ad would be able to afford a larger payment to 
potential recipients.  Therefore, logic suggests that absent any other 
guide, I should spend my limited time reading preferentially reading the ads 
where the advertiser was willing (and able) to make a larger payment.

Were a mail-reader program equipped with the ability to collect such 
payments and change the ranking of ads, it seems logical to believe that one 
of the most frequently-chosen options would be one which presented the 
highest-paying ads FIRST, then the others in decending order of value.

There are multiple levels of self-interest at work here, reinforcing 
themselves.  First, in the short term, advertisers who pay more make you, 
the customer, richer.  But more importantly, if the customer preferentially 
reads high-payment ads, over the medium-term  the advertisers will tend to 
get the idea and will raise their payments to whatever they feel they must 
to get your attention.  Further, in the long term giving more business to 
advertisers who pay customers more will tend to strengthen those 
advertisers, leading to their dominance in the industry.

In short, like Darwin's natural-selection concept, the idea of including 
payments with unsolicited ads will simply take over.  In fact, at some point 
the concept of sending unsolicited product or service advertising (at least 
on the Internet) WITHOUT including a gratuity will become as gauche as 
exiting a restaurant without leaving a tip.   At that point, the behavior of 
millions of potential customers will, in effort, ENFORCE the practice, 
because the vast majority of the public will simply ignore advertising by 
rude, un-generous people.







Jim Bell
jimbell@pacifier.com