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Social news site Digg is introducing a new “social advertising platform” this week that will allow users to vote advertisements up and down the way that Digg users currently curate news content. The approach may not be new – companies like Facebook and RazorFish have created similar ads — but the Digg community offers a lot of potential for the strategy.
For starters, Digg users are already in the business of rating content.
Digg is a social news site where users curate content by voting and commenting on submitted links and stories. The new ads will be marked as sponsored content, but will otherwise have the same "look and feel" as the news stories, according to Mike Maser, Digg's chief strategy officer.
Popular ads will be cheaper for advertisers, which should encourage companies to improve their content. But users can also "bury" ads they don't like, and the lower the rating of an ad, the more the advertiser will be charged, which will eventually price poorly targeted ads out of the system.
Digg CEO Jay Adelson says: “Like everything else about Digg, we want to bring users into the conversation and let the advertising be content in ways that will allow for a much richer experience and will really amplify the effectiveness of ads for media buyers.”
The main flaw in the theory of approval ads is the assumption that users are actually looking at advertising in the first place. On social networks like Facebook, users may be very engaged with the content, but they skip over advertising completely.
The strength that Digg brings to the game is the way that Digg users are already heavlly engaged with voting on content they see on the site. In addition, voting on ads will have an immediate effect on their value and relevance, while a site like Facebook will only “take this feedback into account" with its future strategy.
"The notion of ads on Facebook has been fraught with problems from the beginning," says eMarketer senior analyst Paul Verna. "These ads are more geared toward what Digg naturally does."
Digg's 36 million unique visitors are already voting thumbs up or down on content all day long, which will help to encourage feedback into Digg's ad system. One problem that could arise is a user revolt against advertising. If users are consistantly voting down ad content on the site, it could produce a prohibitively high barrier to entry for advertisers.
But Digg is planning to vigilantly check for such aberrations. Anderson tells The New York Times: “The bottom line is, we are going to launch this, we are going to iterate, we are going to listen to what users say and if they have concerns we have ways and plans to deal with it.”
Social advertising may be particularly well suited to Digg, but the real question that remains is if it will be effective enough to help with the problem of monetizing user generated content. Like YouTube, MySpace, and Facebook, that is the main hurdle that Digg is trying to overcome in turning a profit.
Says Verna: "At the end of the day, I don't know if this is really going to make a difference in terms of whether Digg can make user generated content work as an advertising vehicle."