It’s taken a few weeks for this to sink in: John Battelle’s post on Sell Side Advertisting (inspired by Ross Mayfield’s post on Cost Per Influence).

Ross wrote: “An important facet of this format is the amount of user choice. Users decide what feeds to subscribe to and ads to block. Bloggers should be able to choose what ads to both host and pass through.”

John’s addition:

Instead of advertisers buying either PPC networks or specific publishers/sites, they simply release their ads to the net, perhaps on specified servers where they can easily be found, or on their own sites, and/or through seed buys on one or two exemplar sites. These ads are tagged with information supplied by the advertiser, for example, who they are attempting to reach, what kind of environments they want to be in (and environments they expressly forbid, like porn sites or affiliate sites), and how much money they are willing to spend on the ad.

Once the ads are let loose, here’s the cool catch – ANYONE who sees those ads can cut and paste them, just like a link, into their own sites (providing their sites conform to the guidelines the ad explicates in its tags). The ads track their own progress, and through feeds they “talk” to their “owner” – the advertiser (or their agent/agency). These feeds report back on who has pasted the ad into what sites, how many clicks that publisher has delivered, and how much juice is left in the ad’s bank account. The ad propagates until it runs out of money, then it… disappears! If the ad is working, the advertiser can fill up the tank with more money and let it ride.

This concept of decentralizing ads (instead of “classified ads”, they’re “declassifieds“) empowers multiple agencies — not just advertisers and ad networks but publishers, too — to determine which ads propogate.

Taking this a step further to create a truly decentralized advertising network requires asking oneself the question of who is empowered to determine what goes in the square inch of real estate used by web browsers and feed readers to display ads? Not just advertisers, ad networks, and publishers — but the software writers and the actual people reading the web and feeds as well.

I came across this preparing to visit Prof. Plott at my alma mater next week… here’s some snippets from one of his very latest papers; he’s been interested in information aggregation of late.

DECENTRALIZED MANAGEMENT OF COMMON PROPERTY RESOURCES:

For several centuries, villages in the Italian Alps employed a
special system for managing the common properties. The
experiments and analysis of this paper are motivated by an attempt
to understand why that particular system might have been successful
in comparisons with other systems that have similar institutional
features. The heart of the system was a special monitoring device
that allowed individual users to inspect other users at their own cost
and impose a predetermined sanction (a fine) when a free rider was
discovered. The fine was paid to the user who found a violator.
In addition to the replication of the results of others, the paper
finds three classes of results. First, in comparison with a classical
model of identical, selfish agents, the data can best be captured by a
model with heterogeneous and other-regarding preferences where
altruism and especially spite play an important role. Second, the
model with heterogeneous agents suggests that the success of the
institution is related to its ability to turn these individual differences
to socially useful purposes. Third, the model also explains important
paradoxes that can be found in the existing literature.

…

The success of the Carte di Regola system appears to be related to its ability to use the
heterogeneity of preferences to socially advantageous ends. The system also appears to have
a type of robustness against institutional and parameter changes. Notice first that the Carte di
Regola channels attitudes that might normally be considered as socially dysfunctional, such as
spiteful preferences, into socially useful purposes. People with spiteful preferences choose
to monitor and sanction at a monetary loss. But when their preferences are considered as
part of system efficiency, they are the ones who can perform the function most efficiently
and are channeled into the activity for which they have a comparative advantage.

One might think that the Carte di Regola is similar to a system of vigilantes but there are
important differences. In the model, spiteful people do not care who they hurt, they just
enjoy hurting others, so it is important to direct and constrain them. The Carte di Regola
directs them by reserving the judgment of guilt for the courts, as opposed to the vigilantes,
who would be happy to judge anyone guilty. The court convicts a person only when the guilt
is consistent with social purposes. The magnitude of punishment is also reserved for the
courts in the Carte di Regola system, while in a vigilante system the inspector is allowed to
judge and determine punishment. So, the Carte di Regola constrains what the spiteful can do
to the guilty. Thus, there are important differences (OWG, 1992).

The Carte di Regola also channels arbitrary or random behavior toward useful ends. Such
behavior might ordinarily be regarded as dysfunctional from the point of view of economic
efficiency. Mistaken inspections or impulsively random inspections are costly to the
inspector and thus involve efficiency losses, but the fact that inspections take place has
consequences for those who are excessive users of the common pool resource by increasing
the likelihood that a sanction is imposed. Thus random inspection behavior that would
appear irrational helps preserve the commons.

A step in the direction of “decentralizing Akamai” — but still uses the “centralized DNS” to create an interesting distributed web caching network — is the Coral Content Distribution Network.

Mike Dierken talks about the Coral CDN by quoting Gordon Mohr quoting Michael J. Freedman’s post to the p2p-hackers list:

To take advantage of CoralCDN, a content publisher, user, or some third party posting to a high-traffic portal, simply appends .nyud.net:8090 to the hostname in a URL. For example:

http://news.google.com/ –> http://news.google.com.nyud.net:8090/

Through DNS redirection, oblivious clients with unmodified web browsers are transparently redirected to nearby Coral web caches. These caches cooperate to transfer data from nearby peers whenever possible, minimizing the load on the origin web server and possibly reducing client latency.

Mike writes: “DNS/HTTP based P2P — Wicked cool and finally a REST based scalable p2p network. I wonder how I could use that at Amazon…”

Rohit asks if this technique could help Slashdot alleviate “The Slashdot Effect.” According to the Slashdot post on Coral, apparently not.

The following are only a few lines of excerpts from an extremely important argument about the “culture of design” surrounding software. It is a critical aspect of any effort to design “software that works the way society works,” to cite the credo of the decentralized software architecture crowd.

It may have an important impact on how CommerceNet Labs refines its own mission, too…

Software That Lasts 200 Years

In many human endeavors, we create infrastructure to support our lives which we then rely upon for a long period of time…

By contrast, software has historically been built assuming that it will be replaced in the near future (remember the Y2K problem). Most developers observe the constant upgrading and replacement of software written before them and follow in those footsteps with their creations…

In accounting, common depreciation terms for software are 3 to 5 years; 10 at most. Contrast this to residential rental property which is depreciated over 27.5 years and water mains and brick walls which are depreciated over 60 years or more… I can go to city hall and find out the details of ownership relating to my house going back to when it was built in the late 1800’s.

[Dan Bricklin] will call this software that forms a basis on which society and individuals build and run their lives “Societal Infrastructure Software”. This is the software that keeps our societal records, controls and monitors our physical infrastructure (from traffic lights to generating plants), and directly provides necessary non-physical aspects of society such as connectivity.

What is needed is some hybrid combination of custom and prepackaged development that better meets the requirements of societal infrastructure software.

How should such development look? What is the “ecosystem” of entities that are needed to support it? Here are some thoughts:

* Funding for initial development should come from the users…

* The projects need to be viewed as for more than one customer… Funding or cost-sharing “cooperatives” need to exist.

* The requirements for the project must be set by the users, not the developers. The long-term aspects of the life of the results must be very explicit…

* … Impediments such as intellectual property restrictions and “digital rights management” chokepoints must be avoided…

* The actual development may be done by business entities which are built around implementing such projects, and not around long-term upgrade revenue…

* The attributes of open source software need to be exploited. This includes the transparency of the source code and the availability for modification and customization… The availability of the source code, as well as the multi-customer targeting and other aspects, enables a market for the various services needed for support, maintenance, and training as well as connected and adjunct products.

* The development may be done in-house if that is appropriate, but in many cases there are legal advantages as well as structural for using independent entities..

* Unlike much of the discussion about open source, serendipitous volunteer labor must not be a major required element. A very purposeful ecosystem of workers, doing their normal scheduled work, needs to be established to ensure quality, compatibility, modifications, testing, security, etc… The health of the applications being performed by the software must not be dependent upon the hope that someone will be interested in it; like garbage collecting, sewer cleaning, and probate court judging, people must be paid.

The ecosystem of software development this envisions is different than that most common today. The details must be worked out. Certain entities that do not now exist need to be bootstrapped and perhaps subsidized. There must be a complete ecosystem, and as many aspects of a market economy as possible must be present.