Social news site, Digg, faces two big challenges going forward. How to expand its user-base (and therefore content) beyond its geeky roots, and in turn, how to increase ad revenue.
Speaking at the Future of Web Apps conference in London earlier today, Digg co-founder Kevin Rose spent considerable time addressing the first issue -- how "to expand beyond the geek set and get some real-world relevance", reports CNet's Caroline McCarthy -- but also revealed that the site is contemplating a new potential revenue stream: "Diggable ads".
Exactly how this new type of advertisement would work isn't clear, but as the name implies they'll likely introduce a degree of interactivity similar in spirit to Facebook's recently introduced "Engagement ads". In Facebook's new ad unit, users can interact by leaving comments, sharing virtual gifts, or becoming a ‘fan’. Any interaction then shows up in a user’s news feed. In Digg's case, it may be that an ad gets promoted to the homepage by receiving enough diggs (votes) from users.
Whatever form a "diggable" ad ends up taking, it's almost inevitable that the site's traditional user-base won't take to them kindly. A constant topic of active Digg users is their disdain for online advertising and this is backed up by reports from publishers who note that site visitors sent from Digg are far more likely to have installed an ad blocker for their browser and are far less likely to click on ads.
All of which would explain why Rose is so keen to find ways of growing Digg's user-base beyond its traditional demographic.
Rose explained, Digg's strategy going forward--one of the reasons why it raised $28.7 million in a Series C round last month--is to make the service more relevant to the average user. Digg has started to experiment with personalization and recommendation, something that Rose frequently discusses in his town hall Webcasts with the company's CEO, Jay Adelson. Introducing a "similar users" feature on the "upcoming" page of Digg increased friend adding fourfold and Digging by 40 percent.
Rose also revealed that Digg has a lot of data that it's yet to expose, data which will help the site target users in order to provide more relevant content, and of course be potentially useful for advertisers too.
Pooling users into "dynamic" groups by interest is paramount, as is customizing the site for people who might not want all those stories about iPhones and Barack Obama. Beyond that, there's more: Digg has used internal algorithms to identify what Rose calls "prescient users," or tastemakers who have a high probability of Digging something early on that will eventually become very popular.
Of course we've known of the existence of an internal algorithm to identify "prescient users" for a long time, although most people just call them "top diggers". They are a group of users, often early adopters of the site, who routinely get stories they've submitted onto Digg's front page. What's new is to hear Rose talk up this group of users as an asset to the site - although it makes a lot of sense in terms of brands wanting to learn how to leverage social media - as, from the outside at least, it seems that in recent times Digg has gone out of its way to penalize their submissions.