This post is based on the original “Free Idea”:http://www.red-sweater.com/blog/330/free-idea-cooperative-advertising, first published April 21st on “Red Sweater Blog”:http://www.red-sweater.com/blog/ .

Businesses operating on the web need eyeballs. Eyeballs with money, preferably. This can be achieved through word of mouth, but a bit of prudent advertising is often helpful. While most companies shell out good money for impressions and click-throughs, I suspect we could dramatically increase the breadth of our marketing without spending a dime. How? By advertising for each other.

When you build a new product or a service, three phases will dominate your development cycle, and roughly in this order:

*1. Coding and testing* to produce a compelling product.
*2. Customer support* to increase the odds of an ideal user experience.
*3. Marketing* to increase the total number of user experiences.

Although the categories are numbered, the expenses are additive rather than sequential. When you reach phase three, you’re still spending on development and customer support, but you’ve reached the enviable position where putting dollars into marketing causes more dollars to come back in revenues. Nifty! But how do you know when you’ve reached that level?

Some businesses assume they have accomplished the first two, only to aggressively market their fundamentally flawed and poorly supported products. This is a good way to burn through what little revenue is coming in. Wouldn’t it be nice if there was a level of advertising approximating the kind you paid for, but came without the hefty price tag? This level of advertising could help grow the customer base to a level where higher advertising budgets become more of a no-brainer.

One valuable asset any web business has is its existing customer base. A person who visits your site but doesn’t visit mine is inherently valuable to me. Assuming there’s any crossover at all in our target markets, your customer could soon become my customer. So would you be so kind as to show them my ad?

Cooperative advertising could be facilitated by simple software that serves just a few purposes: to distribute ads; to maintain accounting statistics; and to allow basic opt-in and opt-out configuration (to avoid conflicts of interest). It would be sort of like the “web rings” of years gone by, but with a quid-pro-quo: For every time I show your ad to one of my users on my web site, you show one of my ads to one of your customers on your own site.

Most of us can name ten or more companies whose products or services we’d be proud to promote to our own users. Especially if doing so meant that they would in turn promote ours. And customers with faith in our products would likely find the implicit endorsements more helpful than exploitative. Any product a business was not comfortable promoting could be removed from the pool of ads via the software’s interface. The self-governing nature of the collectives would head off abuse and set a low standard for accounting and fraud detection.

This software could be a great boon to a variety of groups, business and otherwise. I am wishing for an open source solution with maximum portability, easily deployable on any LAMP-style web server. Business communities, such as the Mac development community I belong to, could then easily configure a powerful cooperative advertising system. This would both leverage and benefit our most valuable asset: our users.