I think you're lumping television and brand advertising together with targeted shopping advertising. TV and brand advertising works by bombarding a suggestion into your mind so you think of it at a later date.
With these Craigslist ads, the more likely scenario is that when you search for "toasters" you'll see ads for where to buy a toaster right now. Ads like that are outright useful and are no inherent insult to rationality. I don't think there is anything irrational about clicking on an ad that conveniently happens to be exactly what you want at that moment.
I don't dispute that most ads inspire irrationality, but I still don't follow the argument that because ads encourage rationality, we should not follow through with this project to raise a billion dollars for charity, especially rational charities.
I don't think this is going to save mankind. I proposed this as a project that would rid the entire Less Wrong community of any empathic self-loathing as a result of buying lattes instead of saving lives in developing countries and to that end I think it will work rather well.
Having said that, I think you raised an important objection that Craig and Jim could raise: that there is something inherently bad about advertisements and it goes against Craigslist's mission as a public service. They'd have to make the case that their feelings about advertisements outweigh the wishes of the users. Or maybe it's just that we'd want to frame it so that was the case they'd have to make.
We can reasonably debate torture vs. dust specks when it is one person being tortured versus 3^^^3 people being subjected to motes of dust.
However, there should be little debate when we are comparing the torture of one person to the minimal suffering of a mere millions of people. I propose a way to generate approximately one billion dollars for charity over five years: The Craigslist Revolution.
In 2006, Craigslist's CEO Jim Buckmaster said that if enough users told them to "raise revenue and plow it into charity" that they would consider doing it. I have more recently emailed Craig Newmark and he indicated that they remain receptive to the idea if that's what the users want.
A simple text advertising banner at the top of the Craigslist home or listing pages would generate enormous amounts of revenue. They could put a large "X" next to the ad, allowing you to permanently close it. There seems to be little objection to this idea. The optional banner is harmless, and a billion dollars could be enough to dramatically improve the lives of millions or make a serious impact in the causes we take seriously around here. As a moral calculus, the decision seems a no brainer. It's possible that some or many dollars would support bad charities, but the marginal impact of supporting some truly good charities makes the whole thing worthwhile.
I don't have access to Craigslist's detailed traffic data, but I think one billion USD over five years is a reasonable estimate for a single optional banner ad. With 20 billion pageviews a month, a Google Adwords banner would bring in about 200 million dollars a year. Over five years that will be well over a billion dollars. With employees selling the advertising rather than Google, that number could very well be multiplied. An extremely low bound for the amount of additional revenue that could be trivially generated over five years would be 100 million.
I'm very open to other ideas, but I think the best way to assemble a critical mass of Craigslist users is via a Facebook fan page. Facebook makes it very easy to advertise Facebook pages so we can do viral marketing as well as paying Facebook to direct people to our page.
50,000 users would surely count as a critical mass, meaning that each member of the Facebook page effectively created $20,000 for charity. I don't think there has been any time in history where a single click had the potential to do so much good, and the disbelief that this is possible is the main thing that our viral campaign would have to overcome. After the Facebook fan page got beyond a certain number of users, we could more aggressively take the campaign to Twitter and email.
Are there any social media marketers in the house? The first step is deciding what to call the Facebook page; it's limited to 75 characters.
It's time to shut up and multiply. I will match the first $250 donated towards the advertising budget for this, more next month depending on my personal finances. If anyone independently wealthy is reading this, $20,000 is probably enough to get the critical mass of users this week.
I welcome all of your criticism, especially as far as the mechanics of actually making this happen. As far as how to optimally distribute money to charity, that is very much an unsolved problem, but I think it's one that we can mostly worry about when we get that far. I also expect Craig and Jim to take a leadership roll as far as the distribution of the money goes.
Also see previous discussion.