Yesterday, Digg announced the release of “Digg Ads” a new advertising platform that will hopefully pull their finances out of the red. What is different about this form of advertising on Digg, is that it is the first time that they have mixed the content in with the ads.
Ads will look exactly like a normal submission with the exception that no submitter will be present and a small line will appear on the top and bottom of the article with the text “sponsored” above.
A Brief History of Digg Ads
Digg has never really figured out how to really monetize advertisements on the site. They have looked for help in figuring out what users wanted, and tested out different platforms. Digg started up using Google as an ad provider with a mix of Federated Media placements. Then about two years ago Digg moved away from Google AdSense and gave Microsoft a spin at providing ads. This year Digg again tried mixing it up by dropping Microsoft to try slinging their own ads. In addition to going it alone on the ad front, Digg hired away Federated Media’s Sales Chief about a week ago as their Chief revenue Officer.
Why this makes sense for Digg
What Digg has been doing from an ad standpoint simply hasn’t been working. They are losing money year after year, and this is a glimmer of hope that they can successfully monetize ads with site interaction. These ads will not be static messages, as Digg is giving the community the ability to interact with the ads by voting and commenting; eventually setting the price for the ads. While obviously users would prefer an ad-free site, this form of advertising is truly interactive from both the user perspective and the advertiser perspective.
Diggers are very anti-establishment and a good portion of them ad-block the current ads on the site. One reason for this may the fact that Digg hasn’t provided their audience with the most relevant of ads. Digg has even apologized for some highly annoying ads that have upset its users in the past. Seeing that Digg has tried a variety of different ads to no avail, a fresh attempt is needed and this approach looks like it may solve many of the current problems.
Why This Will be Good for Users
If it works, Digg will stick around. As silly as this sounds, making money (or at least breaking even) is an intrinsic aspect of running a service for people. Sure Diggers are used to getting things for free (torrents, software cracks, Digg w/ad block … etc) but at the end of the day a Digg with sponsored listings is better than no Digg at all. Many users are already embracing the system, as long as it isn’t too intrusive:
I think this is great, but please don’t put more than 2 ads in the river at any given time. – Digg User Alancayce
Users will determine how much advertisers have to pay. If an ad sucks, users will be able to speak up about it in a civilized format instead of submitting articles complaining about ads. The worst ads will be footed with a bigger bill, and advertisers may re-consider purchasing again.
They aren’t annoying. Traditionally, ads that have appeared on Digg can play music when hovered over, pop-out or be too flashy (like the current Microsoft ad campaign on Digg). These new ads are clearly marked and look to be stationary and unobtrusive. Users will see a link with a short description and can choose whether to check it out or not, no digital shenanigans involved.
This will help to make ads much more relevant. The majority of complaints about Digg ads have been that they are off-topic and intrusive. Now users can comment on why they dislike an ad to sway negative votes, and bury ads that suck. If it’s a good ad – great! More good ads should begin popping up.
Why This Will be Good for Advertisers
If your content is good, you should be able to pay pennies on the dollar. This should help those non-traditional advertisers who couldn’t afford bloated CPMs a shot at advertising on Digg.
It is a way for advertisers to be a part of the site. Instead of working on captivating creative for banner ads, advertisers can be judged off of their content. In an era of banner blindness, being integrated into the site will undoubtedly drive more clicks and awareness for ads.
A Look at Other Social News & Bookmarking Ads
The two largest Digg competitors are Reddit and StumbleUpon, both with legacy ad systems that are also integrated into the content.
Reddit, currently undergoing user backlash, added ads to the site about 2 years ago, and has also added sponsored listings earlier this year. Also, the side ads have always had the ability to be voted on by using the “Reddit this ad” button beneath each.
StumbleUpon has an advertising system that allows advertisers to purchase views from selected users. These ads directs StumbleUpon user to an advertisers page without notifying them about the nature of the paid stumble. Currently only paid members have the ability to terminate these ads.
Why the Digg Ad System Will be Better
Unlike the StumbleUpon model, the Digg ad model is upfront and doesn’t mislead visitors. Users can see the clearly labeled ad, and choose not to view the page. This doesn’t force unwanted content down a user’s throat and gives them the option of viewing the paid content placed within the site.
The Reddit ads allow for commenting, but no voting functionality exists to let users decide the quality (update: commentor ‘jedberg’ informs us that if an ad recieves a high number of votes it can stick around longer). The new Digg ad system will show the votes and also allow users to bury the ads (traditionally, a buried ad is hidden once buried then grayed out to they user for good). While Reddit did a good job mixing ads with content in a non-obtrusive format, Digg has taken this one step further and will help users dictate the ad pricing, and hopefully the users eventually dictate the ads altogether.
What Advertisers Should Know
Even though you think you can buy your way onto the popular page of Digg, it is a MUCH different venue than creating quality content that users naturally promote to the homepage. Even though the ads will be featured on the homepage, Diggers traditionally pass on paid messages. Additionally, if an ad is sent to a strictly commercial page that is of no interest to the Digg community, they will face a high level of criticism. While this seems like an easy way to “get popular” on Digg, the traffic, links and visibility from a natural community driven story will be exponentially larger and more productive than a sponsored message.
What Ads Will Work
The Digg community is a highly technical community that is stereo-typed as enjoying video games, gadgets, Democrats. Companies that are tech related or have products that have a positive reputation on Digg should fare well. These advertisers could successfully leverage product launches, updates and exclusives by using the new Digg ads.  To see what will work, simply visit the site regularly and see what is gathering the most votes and responses- these will be the successful ads down the road.
Examples: Microsoft leaks a release date around the Zune HD through a Digg ad or Warner Bros. buys an Ad for an upcoming Batman trailer
What Ads Won’t Work
As much as the community likes technology and politics, they despise ads. With that said, nearly all of the Digg banner ads would be a massive failure if they purchased this new form of advertising. Anything that is corporate, sales-y or not interesting will be victimized. If your product isn’t targeting tech-savvy opinionated 16-30 year old males, you won’t have success with these ads. I feel that the majority of the early ads will flop miserably and hurt mismatched companies more than it will help.
Examples: Freecreditreport buys an ad that sends users to their homepage or Hummer buys an ad that features their newest gas guzzler
How the System Could Backfire
While voting and commenting on ads mixed in to normal Digg content sounds like a great idea, Diggers have been known to be a very harsh crowd, and excessively negative comments are common ground on Digg. If an ad is terrible, not only will the price be higher, but it could feel the wrath of the Digg community who are notorious for being brutal commenters. Many major brands may shy away from this form of advertising if their reputation is dragged through the mud.
Additionally, if the quality of the sponsored ads is lacking, or the ads seriously degrade the content on the site, users could be isolated and may leave Digg completely.
Conclusion
This ad system is a well needed change for Digg, as it brings much needed revenue potential that will deliver a much bigger bang for advertisers. However, advertisers may shy away from an ad that hangs them out to dry in front of the nefarious Digg community. It is a risky move, but has the early potential to be the hands down leader in social news advertising … only time will tell.
What do YOU think?
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30 Responses to “Why the Digg Ad System Will Help Digg (and Digg Users)”
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Excellent points Greg. I think the ads will work well for certain things (tech product launches, events that the Digg crowd might be interested in, etc) but won't work for a lot of other things (trying to push content, trying to cram a certain view down their throats, etc).
You hit the nail on the head here:
"While this seems like an easy way to “get popular” on Digg, the traffic, links and visibility from a natural community driven story will be exponentially larger and more productive than a sponsored message."
Awesome write up, I agree, exciting for a certain group of people and sites. Also I think it is good for Digg itself as a business. Way better than the old model.
There is an error in your analysis of the reddit ads. Reddit does indeed allow voting on the sponsored links, and the votes do have an effect. If the sponsored links gets enough votes, it will stay up longer by appearing in the main listing, effectively giving good ads free exposure beyond what they have paid for, reducing their CPM.
Thanks for the info that the sponsored ads can stick around longer if they do receive a good deal of votes. I updated the section and credited your comment
Still the two systems are quite different, and I hands down think that the Digg concept is more favorable than Reddit's.
popurls.com // popular today…
story has entered the popular today section on popurls.com…
Speaking as a guy who makes ads, Digg may also find itself a good neiche market for the products you mentioned in your article but nothing more. General interest websites such as portals tend to attract the more random/general ads because they are talking to a wide range of people. Media buyers are not always so savvy that they will highlight interest-specific sites and many game developers and the like know that if they do something cools it's likely to end up on Digg anyway. The Diablo 3 promotion is a good example, rather tahn farm out banners they changed the graphics on their website and waited for a Digg user to post it.
I believe many people who understand how Digg works are already using it to their advantage, which – as you point out – means that the people who understand Digg won't need to buy ad placements and the people who don't understand Digg will find their ads perform poorly. I love Digg, but it'll be interesting to see if this venture works out for them.
I wonder if Sony will veto the site for broadcasting that BluRay code too?
This is a tried and tested method of annoying users. I don't agree with this new ad system. It'll affect usability.
I think this will annoy users; even users will start to notice these ads and avoid them causing major problems to Digg.
I think Digg users must be a bit thoughtful and help the Digg system by giving a click on those ads to help them earn something. Otherwise we will loose the Digg soon.
Hey, if it helps Digg then it must be good!
RT
http://www.real-anonymity.pro.tc
[...] on Digg, is that it is the first time that they have mixed the content in with the ads.Source:http://www.10e20.com/blog/2009/06/04/digg-ads/ Jun [...]
Yawn.
The only thing "special" about social media's situation with ads is they have some brain damaged concept that people hate ads and they have to molly coddle their users or they will revolt. Poppycock! Numbers and the entire history of the web prove that ad supported content is not only bearable, but a viable business model. So when I hear these social media site whine that they are having trouble being profitable and they don't even have IAB standard placements (which are standard because of extensive data and testing) and trying to get a hold of a sales rep and give them cash is an exhaustive exercise, I say Poppycock!
These sites struggle not because of some unique situation with their users feelings, or some special nature of their type of content, it's flat out because they don't know what they are doing when it comes to monetizing traffic.eeking advertisers, creating placements, targeting and analytics.
Digg needs to grow up. Their "altruistic hobby for the betterment of their own personal opinions" isn't flying. The user-base does not skew tech and left. It's all over the board, in spite of Digg's attempts to control the message and participation as they seem fit.
The nail in the coffin for Digg, besides acting like jilted high schoolers who pull accounts for not following their hilarious and immature rules, is pulling all shouts. Shouts are the engine that help and innagurate the newcomers and users in general to get traction on Digg and become interwoven into the Digg community.
As far as the ads, they won't work because their are few that will suit Digg's opinionated opinion, which means they themselves will stifle the content.
The internet is a democracy. As hard as it is to create an utopia image in your mind, see it come to fruition and then have all the schlubs in the world show up and use your tool too, it is the reality of any business model that is successful.
If Digg wants out of the Red, they will have to be something they despise, capitalists.
Wake up, grow up and move on. You've built a good tool. Quit trying to control the users and everything else will fall into place. If you don't, your product will be bought for pennies on the dollars by Barry Diller and respun as an extension tool in a network that generates substantial revenue from the same schlubs Digg founders begrudge, hassle and try to control. Which means all their hard work will be for not.
Good luck Digg!
Apologies for typos above running fast and don't have time to edit.
Good points but I really think it'll backfire – especially if they allow comments. What happens if diggers get agitated and begin down voting all the ads. People start paying a lot more. Also if they allow comments – people could start raising all sorts of slanderous attacks.
In the Sims 3 example, imagine if someone posted a torrent link to the downloadable game (which was leaked days in advance of the actual release date). It would be quite bad, and again raise issues over free speech – is an ad on digg subject to the level of free speech they allow in regular comments?
[...] on Digg, is that it is the first time that they have mixed the content in with the ads.Source:http://www.10e20.com/blog/2009/06/04/digg-ads/ Posted by Andy B at [...]
What Ads Will Work:
Having been a Digg user for three years, sometimes frequenting the site for 40 hours per week or more I know exactly what ads will work.
Include anything that directs users to Apple, Barack Obama, marijuana, gay sex, Jon Stewart, Red Bud, Huffington Post, Green Bud, OSX, Daily Kos, bong, KosTV, rolling papers, FiredogLake, cleaning rod, the Democratic party, THC, iPhone, pro socialism, Michelle Obama, pro free health care, Malia Obama, Marxism, Sasha Obama, Comedy Central, pro Lenin, Bo Obama, anti Republican, Portuguese Water Dogs, Bush sucks, skate board, iPod, queer.
[...] Das neue Digg Ad System – sehr spannend! [...]
I just hope the Digg ad system doesn't become as annoying as the Ads on Myspace!
Last minute airfare deals….
Airfare. Cheap airfare….
I really doubt the sucess of this new ad program for digg. I think its going to be a failure. They have to find some other alternative to come out of red.
NIce bloging Sie
I have to say that I'm new to the social marketing thing and I'm a bit nonplussed by the whole thing. At first I thought it would be a good way for me to market my business. What I'm starting to understand now is that it's really about making friends and getting along in a community. That's all good and I don't have a problem with that, aside from the fact that that's not for me right now.
Anyway, I guess my thought on the matter is that here is Digg, FaceBook, StubleUpon and I imagine all or most of the others just lookin' for another way to make money. There is no market for these companies to get into other than advertising, and the more money they make the more advertising they have to shove down our throats. I guess I wouldn't mind a seeing a certain amount of advertising, but they're after the millions of dollars and in the end, these sights are going to try to shove advertising down people's throats.
There are a couple of good business models out there, though, in relationship to social-type sites. Craigslist has a pretty good business model and so does backpage (although I'm not certain that backpage has forums). They both charge for certain types of ads, and if people look at ads, that's what they do. Another social-type site that advertises in not too obtrusive of a way is meebo.
Mike
I would bury most of the ads. Simply because ads in general have become so annoying these days.
Ads should be within normal limits, otherwise they can be too annoying.
Very true Zookii, If the ad is too long, its going to deteriorate your brand image and going to cause you more damages then the profits.
Digg’s ad standpoint really hasn’t worked so far. Losing money year after year, and having a glimmer of hope that they can successfully monetize ads. They can just follow the points made out in this post. I think they will work.
http://www.softlaser.org
I think ads are very important, but they should'nt annoy users!
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Ads are usually annoying now-a-days and people really despise and hate them!
This also means that advertisers have huge incentives to create ads that people like, not just tolerate. The more people who like the ad, the more exposure advertisers get, without spending a penny more.