NEW YORK (MainStreet) — When the history of advertising in the 21st century is written, one gimmick from a little-known advertising group named Adzookie will likely come to be viewed as a watershed moment when the traditional notion of ad space was upended in favor of a new form of product placement.

In early April, Adzookie, a small company in Orange, Calif., presented homeowners with an extreme promotion: If they agreed to have a temporary Adzookie advertisement painted on their house, the company would pay the mortgage each month the ad stayed up (and cover the cost of painting the ad and repainting the house afterward). It was a promotion that seemed tailor-made to grab headlines (and it did), but how many homeowners actually could be desperate enough to transform their home-sweet-home into a neighborhood billboard?

The answer, to date, is more than 20,000. Adzookie claims to have received 1,000 applications for the promotion on the first day alone, 10,000 in the first week and 22,000 applications in total, all in less than two months. To put all this in perspective, the company’s initial quota was to paint 10 homes, a number based on their low expectations and low budget, but it has since brought in other advertisers to raise the quota to 100 homes, with the first approved homes scheduled to be announced in the next few weeks.

If these numbers sound like an exaggeration, just take a glimpse at the wall of the company’s Facebook page, where dozens of homeowners from around the country and the world have posted pictures of themselves or their homes along with personal pleas explaining why they're right for the promotion.

Some emphasized the unique perks of their real estate, (“The tree in our front yard is coming down today to give persons an unobstructed view of our beautiful ad. People drive by at all hours of the day and night. What a bargain you guys would get”), while others wrote of dire straits (“My husband and I are desperately trying to hang on, we need you – you are our last hope”).

“When we first launched this, we weren’t sure how people would respond to it,” said Romeo Mendoza, CEO of Adzookie, who estimates that 90% of those who have applied for the offer are likely doing so for financial reasons, while the remaining 10% are just doing it for the experience. “There are some who want us to paint their RVs, their cars, one guy even wants us to paint an ad on the back of his phone because he says he’s an actor and people will see it.”

Adzookie isn’t the first or only company in recent years to effectively turn ordinary consumers into paid brand sponsors. In 2008, Jobing.com, a career site, launched a promotion giving consumers a gas stipend in exchange for advertising the site on the side of their car. More recently, several retailers including Marc Ecko have offered customers a lifetime discount if they were willing to get a tattoo of the company logo. Even schools and communities have found themselves tempted by the idea of partnering with marketers, taking the unprecedented steps of placing ads on school buses and lockers or, in some cases, letting marketers buy the naming rights to public buildings.

Yet the massive response to Adzookie’s promotion shows just how eager many consumers and communities are to embrace the idea of placing advertisements in previously untouched spaces, whether it be on one’s home or body. If this form of nontraditional advertising does catch on, we might one day see the average community as packed with product promotions as New York’s Times Square.

How the Recession Led to a New Wave of Advertising

As with many business developments in recent years, the rise of extreme advertising can be pinned largely on the recession. With millions of Americans losing their homes and jobs, consumers and communities have experienced a newfound desperation to boost their revenue however they can. Suddenly the idea of shilling for a company doesn’t seem quite so bad.

“The poor economy has made consumers, schools and communities more willing to offer themselves up as advertising,” said Jonah Berger, a marketing professor at the Wharton School of the University of Pennsylvania. “When a school is $3 million in debt, letting Coke name the stadium starts to look a lot more attractive.”

But having consumers eager to advertise a product wouldn’t be enough by itself; advertisers had to be willing to experiment with marketing strategies as well. Advertisers may not like to publicize it, but the industry as a whole has been struggling to reach consumers for much of the previous decade, making them more willing to try something new.

“For the last five or 10 years, advertisers have been trying to combat the fragmentation of the medium,” said Ravi Dhar, director of the Center for Consumer Insights at the Yale School of Management. Rather than simply place an ad in high-rated TV shows, marketers must grapple with the fact that more consumers are getting their entertainment online, or using services such as TiVo to fast-forward through commercials when they do watch. Likewise, marketers must reevaluate whether and how to place advertisements in magazines and newspapers as more readers abandon print for digital versions of favorite publications.

The recession exacerbated those issues by tightening the marketing budgets for many companies, choking the advertising industry as a whole and creating the perfect storm for a new kind of advertising model.

“That this phenomenon has increased so much since the most recent recession is not an accident,” said Abram Sauer, a writer at BrandChannel.com. “In a very robust economy, the advertisers might not be willing to do such novel things … but then the doorway opened up.”

This opportunity may provide a much-needed lifeline to some communities, but once one allows advertising into schools or on one’s body, where does that lead?

The End of the Ad-Free Zone

Many students and parents in states such as Arizona and Colorado have likely noticed a not-so-subtle change to the yellow school buses that greet them in the morning. In addition to the bus number and obligatory side-mounted stop sign, a growing number of these buses display advertisements for everything from local dentists to car shops.

“When we first started meeting with school districts in 2008, they said they wouldn’t have done this 10 or 15 years ago,” said Michael T. Beauchamp, the CEO of Alpha Media, which acts as an intermediary for schools looking to secure advertising deals on their buses. “Nowadays, with state and federal funding being inadequate and fuel costs going up, they say they really need to do this.”

To date, Beauchamp’s company has helped broker advertising deals in 30 school districts in three of the six states where such advertising is legal, and he expects more schools will jump on the bandwagon as they see how much money there is to be made.

“A district with 200 buses in the fleet can make as much as $1 million over a four-year period,” he said. “The money can be used to keep teachers on staff, valuable programs intact, fuel in the buses and much more.”

But opponents argue that this advertising strategy – like Adzookie’s model – crosses the line.

“These advertisers are exploiting financial situations, whether it’s in schools in need of funding or with families struggling to pay their mortgages,” said Josh Golin, associate director of the Campaign for a Commercial-Free Childhood. Furthermore, once one takes the step of advertising in these locations, it opens a Pandora’s box of corporate logos. As Golin points out, companies aren’t just advertising on school buses, but on lockers and, in the case of one company, 4 Visual Media Group, on cafeteria table tops, effectively turning the students into a “captive audience” for advertisers.

“I think the disappearance of any kind of ad-free space is a concern for kids and for us all,” Golin said.

The Future of Advertising in America

Even if one accepts that unconventional advertising may be a necessary evil in some cases, practical factors may work to limit the number of ads we see in schools and homes across the country.

All things being equal, advertisers prefer having as much control over their messages as possible, but by definition they lose that control when they allow consumers and communities to act as representatives for their company.

“Advertising in schools and homes comes with the same risks as any other spokesperson or co-branding opportunity,” Berger said. “Having Michael Vick as a spokesperson seems like a great idea until he gets arrested, and the same risks apply here. People will associate the brand with that school or person.”

Consumers might face a different concern about the message they’re sending in this arrangement.

“The idea of advertising on your house or car is dangerous from a social perspective because people don’t usually like to let others know that they are hurting financially in America,” said Sauer from BrandChannel. “This is literally advertising the fact that they need help.”

It was a dire economy that convinced consumers and advertisers to put aside these concerns. “This strategy will fade when the economy starts booming,” Berger said.

At least some advertising opportunities have the potential to stick around, though.

“I think there will be a certain crowd that is really looking to extend its dollar and will be willing to get a tattoo of a company or take advantage of an opportunity like the Adzookie one,” Sauer said. “But the vast majority of people will not.”

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