The Simple Truth About Digg’s Lack of Profits

It was hard.  For as long as I can remember, I have not been one who clicks on banner ads.  Heck, in most cases, I don’t even see them (thank you FF).

A friend of mine who is an avid reader turned me onto Audible.com to download audio books.  With recent articles in BusinessWeek and TechCrunch about the financial woe’s they’re having at Digg, I remembered seeing an Audible ad on Digg and thought, why not?

Audible Ad on Digg

I’m going to be signing up for the service anyway.  Why not throw a bone to the site that consumes a ton of my time?

The results weren’t good:

Bad URL

These things happen.  I sent an email to Digg pointing out the issue and waited.  It is now 4 days later.  I surfed Digg, doing my thing, checking every time I went to a new page to see if my target ad had found me.  It eventually did, but still, it didn’t work.

Digg Ad 1Another thing I noticed was the quality and targeting on the ads.  There has to be a reason why the estimates (well over $100,000,000 through 3 years) of the Microsoft ad deal were so far above the reality (less than $10,000,000 per year).  After looking at the ads, there were more problems than just my audible ad not working.

As you can see by the ads to the left, there are concerns.  In one, you appeal to the male demographic with a pretty girl and cleavage offering images of local singles.  I would venture a guess that these ads are among the most clicked.  Still, with social media being populated by people on the “cutting edge” of Internet technology, one would think that paying for images of local singles was, well, below the curve for Diggers.

The other image points to a diet plan. It is Maria’s diet, to be specific.  While there are, I’m sure, men for whom this would appeal (I could use a few dozen pounds off after Christmas), it is clearly targeted towards women. Women are becoming a stronger force on Digg, but it’s still probably around 20% of the total demographic.

Was this all part of the original plan?  When Digg signed a 3-year plan (which is extremely long for any advertising platform, even one with a name like Microsoft) were they aware that the ads would be either off-target or lacking of the most remote chances for a paid conversion?

Here are some others that don’t really need an explanation.  Take a peek and ask, “Are these targeting me?”

Digg Ads 2

These aren’t terrible.  It could be worse.  Actually, it is worse.  Look below at a pair of ads that are clearly not designed with Digg users in mind.  First, you see the Hyundai ad.  Digg users are pretty good at noticing mistakes in images.  It comes with the territory.  For some reason, the Hyundai ad wasn’t sized right and cuts off.  That mistake is nothing compared to having a Comcast ad on the page.  This is Digg.  The community is one of the most outspoken about Comcast.  The conversion rates are most likely next to nothing for this ad.

Digg Ads 3

For those of us who are in the market to build new social media sites, it hurts us when the numbers at one of the top social media sites is so dismal.  Hopefully, potential investors will see that it’s not that these sites can’t make money.  For some reason, they simply choose not to.  With that said, here’s one last image to leave you with:

Digg Ad 4

Read more about social news sites at Social News Watch.

JD Rucker

+JD Rucker is Editor at Soshable, a Social Media Marketing Blog. He is a Christian, a husband, a father, and founder of Dealer Authority. He drinks a lot of coffee, usually in the form of a 5-shot espresso over ice. Find him on Twitter, Facebook, and Pinterest.

18 thoughts on “The Simple Truth About Digg’s Lack of Profits

  1. It seems pretty rare that I see an ad on Digg that would be of interest. Are they really selling that many snorg tees? It reminds me of when a small town newspaper can’t sell their ad space — they just find ads to run for free to fill the space.

    What’s happening on Digg is not an indictment of social media sites, it’s an indictment of handing a ton of venture money to a group of 20-somethings without business experience. They’ve made just about every rookie mistake you can think of.

    Nobody has talked about it, but you can see that their traffic, revenue, and quality went down significantly after the great scripting purge of September 2008. I’m sure they’re blaming it on the economy, but wouldn’t unemployed people have more time for useless surfing? By trying to push out the “business people” they’re getting down to the users that tend to filter ads anyway.

  2. The problem is that they’re getting paid to poor advertising on their site. They made a poor deal except in the little money for putting these ads on their site and then they don’t even work. It is pathetic.

  3. eye-balling it, 40% of this post is pure ads: http://www.ubuntu-pics.de/bild/7936/screenshot_100_168__Sy94xp.png

  4. I had a similar discussion with a co-worker in marketing. I was trying to figure out what the return was like on Facebook ads. Every time I go to the site, I get some shitty ad directed at me.

    It makes me wonder: All the information they have on me (individually based), and they can’t target relevant ads at me. (Last week, I did get one ad that was relevant to my profile and interests).

    Digg has a mountain of individual information at their disposal. If I digg anti-comcast stories, don’t display comcast ads. There must be some way for them to use digging history to display relevant ads. It would certainly increase clickthroughs and possibly increase the value to advertisers.

  5. @Don Draper – you’ve nailed it. Absolutely getting down to the heart of the matter.

    @BlogExpert – yep, exactly.

    @Mike – That’s the second time this weak I did that. (oops, I mean week) :)

    @quack – if you try to click on most of the “ads” they are screenshots of Digg ads. I have 2 ads on the site that are not examples.

    @Gerard – I think I had almost the exact same discussion. You’re right. The question is, “Why?”

  6. I agree that most of the adverts I see on social networks are not targeted – or rather mis targeted – I like your vision of a bunch of 20 somethings sat there trying to figure out who wants what.

    People tastes vary – so choosing advertising is difficult – they presume young geeky men are looking for chicks (same reason burger king are selling aftershave!) love adverts pay out highest commissions – so they are putting potential funds before people/clicks (surprised ?)

    diets – completely off target! – the rest of them are generic adverts which indicates they don’t yet know who to target so they are just chucking everything at them – they are probably relying too much on keywords and searches and not enough on “the vibe” that is digg.

    Solution to problem is easy:

    1. they need to hire a “vibe finder” /trend spotter of sorts like me :-)

    2. next – they need to balance the keyword searches/ stats with the “social vibe” i.e what people really want – and get some niches sorted out and do “split tests” – like Internet marketer do – to work out the ROI and all that conversion stuff.

    good blog Btw :-)

    Zara

  7. My guess is most people using digg like reddit hae good ad filtering and cookie eliminating software on firefox which guess what? — causes ads to be poorly targeted.

    Truth is unless you don’t want ads at all you should let ad servers make a good profile of your interests with their cookies etc becuase then you actually see ads about things that might actually interest you if you only knew if they existed.
    I like the ads in magazines like popular science becuase they are usually things that interest me. why shouldn’t I allow the same thing on the internet?

  8. Hi geo I’ve never heard that adverts can be made crap by cookies – but the only interest I’ve had in cookies are those that track affiliate commissions, visitors and / or lack of. If merchants didn’t use unethical advertising practices – there would be no need for customers to get paranoid and delete everything.

  9. The thing is: Most advertisers, forget Digg for a second and include Microsoft, continue to struggle with how to advertise with social media.

    The three year deal, I feel, was needed because it would likely take that long to see if:

    1) Digg has a viable future as an ad platform
    2) What sort of advertising and what method of advertising works.

    Remember that Microsoft is so huge that one hand often doesn’t know what the other is doing.

    So, I don’t know what the future holds for Digg, but I wouldn’t be too concerned. If Microsoft decides not to renew their deal, then we’ll have something to discuss.

  10. I think you’re onto something.

    I, too, have noticed how poorly targeted — and sometimes even nonfunctional — are the ads on Digg. It’s a shame, really. I’d hate to see the site go under. But with inept advertising and abysmal relations with its user base, that’s a real possibility at some point.

  11. Aren’t we spending too much time here wondering why the ads are so “mismatched” or “mistargeted”?

    Their business plan calls for that, but if they don’t have ads that target your users, then they’re doing the only thing they can do, and that is show the ads that they do have.

    This article and its related comments makes it seem like its a software/site malfunction issue.

  12. You’re dead on about the fact “that it’s not that these sites can’t make money. For some reason, they simply choose not to”. I really wouldn’t say for some reason… It’s quite obvious, I run my social news site purely out of enjoyment. I love the challenge of attempting to overcome the issue of spam in social bookmarking sites (though with little success so far).

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