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Back when Digg started letting its users vote on ads in August, there was concern that users would vote down each ad they saw, rendering advertising on the site obsolete. But just two months later, Digg is seeing returns on its new system.

And the company is so pleased with its new policy that it's planning to expand its advertising platform into a network for other publishers. That sounds intriguing. Will it work?

The new ad model ties into the system already in place at Digg, letting users vote ads up or down according to their preference. The ads are then sold at a higher or lower rate according to their popularity with the group.

The company now hopes to famr out its ads to other publishers, helping them to capitalize on the aggressive (but unpredictable) traffic that Digg sends their way. When Digg users like a particular story or piece of content online, they send users to the site where it originated. In the case of a particularly hot story on Digg, that could mean thousands of new readers.

But there's really no way to tell when Digg users will take to a story. And its hard for publishers to capitalize on the random traffic spikes coming from Digg. Digg is hoping to change that with its new offerings.

Its customizable banners let advertisers populate ads with feeds of user-submitted stories around particular subjects, which could be in theme with the popular subject that brought users to the site. Next in line are the user voted ads that Digg has been testing out for the last few months.

Much like regular content on Digg, users can now vote on the advertising. More “diggs” (or votes) earn a lower cost-per-click rate for the ad, and likely earn the ad a position on the site longer. If users vote down an ad (known as “burying” it) the cost-per-click rate will go up and the ad is more likely to be removed from the site.

Mike Maser, the company's chief strategy officer, calls Digg "the world's largest focus group," and tells The New York Times that the new format has tripled revenue expectations for the initiative.

The average click-through rate on Digg is .8%, but ads voted up by viewers have had anywhere between 2.2 to 3% click-through rates. Meanwhile, the average click-through rate for ads across the web hovers around .1%, meaning many advertisers could be open to purchasing Digg approved ads.

The network is slated to rollout in 2010. If ads succeed on Digg, they can then be farmed out to other sites.

Chas Edwards, chief revenue officer of Digg tells AdWeek that he sees this method as a way for publishers to make more money.

Will ads voted up by the Digg network be able to scale across platforms? Serving ads with information related to the surrounding content is a good step, but Digg isn't the only company offering that. User sanctioned ads could be a useful marketing tool. Knowing that an active community of users have preapproved an ad could work as a vote of confidence, justifying a higher price point for a specific ad across the web.

The bigger reach is expecting that Digg's base of users will be able to predict ad acceptance on other sites. The company has cultivated a very dedicated but niche demographic with behavior that can be predicted well on its site. But elsewhere, it's a different story. There isn't that much evidence that ads Digg users like wil be successful on other websites.

In the end, it's all about context. Take this example from AdWeek:

"Movie studio Fox Atomic found a higher interaction rate for its ads that drove traffic to a Jennifer's Body video snippet posted on Facebook than the same content on the official movie site."

Meghan Keane

Published 14 October, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

721 more posts from this author

Comments (4)

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Hi Meghan

That's interesting - I know nothing about Digg's advertising model so that is useful knowledge.

Can you clarify how Digg's advertising network works? Is it behavioural/contextual targeted content served dynamically? Or is it basic ad placement based on content?

Thanks

james

almost 7 years ago

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webmaster@gervaisgroupllc.com

There’s so much misinformation out there that people don’t really know what is and is not. It’s refreshing to see people that know what they’re talking about. You have an Informed commentary seems to be a rare commodity these days. Keep it coming. Internet Marketing Company

almost 7 years ago

Meghan Keane

Meghan Keane, US Editor at Econsultancy

Hi James. A lot of the details are still unclear, so we won't know until it launches in 2010, but it looks like it would mostly be placing Digg's preexisting system of ads (complete with contextual links and voting capabilities) on other sites.

almost 7 years ago

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website design

Thanks for bringing this to my notice.Hope Digg is able to bring in desirable changes.Like one of the above commenter,i too believe that some facts are still unclear.Look forward to hearing from you soon again.

almost 7 years ago

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