Digg's Disarmingly Direct Approach to Internet Advertising

Ann All

People are suspicious -- and often rightfully so -- of companies trying to sell them stuff. They don't like companies using technology to monitor their online behavior in an effort to perfect their sales pitches, according to a recent University of Pennsylvania/University of California-Berkeley study. That dislike, along with other factors, makes Internet advertising a tricky business.

 

I wrote about this last year, sharing some advice offered by Gartner to companies crafting online advertising strategies. Among the suggestions: "Organize and target online products and services based on a customer's journey toward self-actualization" and "utilize automated, self-learning business intelligence applications called 'persona bots' as a tool of mutual exploration."

 

Sure, that might work, but I like the disarmingly direct approach to Internet advertising employed by Digg.com.

 

Since August, the site has been using an advertising platform that incorporates the same social voting method used elsewhere on the site, with voters "digging" the ads they like and "burying" the ones they don't. As reported by The New York Times, companies pay a lower cost-per-click rate for ads liked by users, meaning they should remain on the site longer. Cost-per-click rates are higher for disliked ads, so advertisers will be more likely to pull them from the site.

 

While it seems counterintuitive to make advertisers pay more for unpopular ads, Digg Chief Strategy Officer Mike Maser says, "it's beneficial for the advertisers to figure out what does and doesn't work." In essence, he says:

Digg is the world's largest focus group.

The voting concept is used to solicit and vet customer ideas for business improvements on sites like My Starbucks Idea.com and Dell's IdeaStorm. Digg's idea certainly seems to be a more effective effort at monetizing its user base than the heretofore clumsy approaches to advertising used by Facebook. Digg's chief revenue officer credits the advertising platform for a tripling of its revenue forecasts, and Digg hopes to syndicate the model for use on other Web sites.



Add Comment      Leave a comment on this blog post
Oct 15, 2009 5:21 AM Paul Grusche Paul Grusche  says:

The voting mechanism may improve the overall ad experience but it still doesn't solve the problem of creating viewer incentive to engage with the ad.  For that you need a value-exchange ad format because the majority of people ignore ads while a select few will think it's novel to vote. 

Additionally, to think that advertisers now have a new tool to gauge the effectiveness of their ad and help them improve creative is a stretch.   A vote up or down doesn't tell me what worked or needs to be changed any more than traditional metrics already used to track the ad.

It seems that most new ad formats are really good at rewarding clients who can afford great creative and might already be popular with consumers (Starbucks and Dell's IdeaStorm).  While the companies trying to make it get voted down (buried) and pay more for the experience.

That being said, I do applaud the effort and think anything that can triple revenue forecasts is brilliant.   

Paul Grusche

Ultramercial 

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