Digg.com, a popular social news site, is using their two biggest assets to change how advertising works, and make good money doing it.
Smart Ads Make more Money
The folks at Digg.com are smart. They realized that they have 2 main assets, content and community, and have leveraged both for a new type of Display Advertising, the Digg Content Ad.
Digg’s Two Biggest Assets
1) The community, a group of users who submit, curate and comment on all sorts of stories
2) The Content, a massive amount of content along with usage information about that content.
The Digg Content Ad
According Chas Edward, Digg’s Chief Revenue Officer,
“Digg Ads are the ad units that let marketers promote their own content on Digg’s homepage, and let Digg readers Digg up the ads they like (and bury ones they don’t).
Beyond advertiser money — which, lets be honest, is a huge incentive to guys like me — Content Ads serve another purpose. If 280 people Digg Viceland.com’s interview with Spike Jonze, thousands of other Digg readers are bound to be interested in it too. But if those readers don’t happen to visit Digg during the few hours that story is featured on Digg’s homepage they might never see it. Content Ads give popular stories extended play, a second chance to reach interested readers who missed it the first time. The fact that an advertiser pays to put that story back on the homepage doesn’t diminish the story’s legitimate popularity.
Do they Perform?
The biggest benefit is that community users can price ads out of the market. The more “diggs” an ad gets, the less expensive it becomes. The more “burries” the more expensive it becomes.
This ads incentive to the ad creator to make something that the community will find worthwhile and has led to click through rates (CTR) near 1% ( much higher than the industry average of around 0.1% ). Some companies, like Threadless, Toyota and Amazon, have reported CTR nearing 2%. (source)
Now CTR’s aren’t everything in the Ad game, conversions matter too. Digg Ads are still in beta, but could be coming to a marketing and promotions mix near you, soon.
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