Social Media is about making money too ! The Digg Example
The big question with social media networks always has been – how do we make money, amidst all the fun and joy, without pissing off our community ?
Because every social network is heavily community focused, the traditional methods of banner ads, were tried but never effective. The community, is the core in any social media network and ads mostly meant “distraction” to them. And since the geeks overtook any other segment of the society on the social networks, it was hard to please them with ads, as they were already aware of them, with severe symptoms of “Ad-Blindedness” even in some cases. Basically, ads never worked for advertisers as well as publishers – so far.
Looks like Digg, one of the largest and hot social networking (probably a wrong term) platform today has struck gold with an ideal, customized Ad serving platform, which is a hit with advertisers as well as the users/community. Well, very close I’d say.
Digg has been testing a new ad-format that they developed on their own, carefully taking into account what users would like and what they would not. Also, they’ve developed a new payment model for the advertisers, so they pay what they get. No burning out ! That must be music to ears for the advertisers.
How Digg Ads satisfies everyone ? (Almost..)
I’m not trying to say that Digg’s ad system is the best out there. Its not at the moment. But its close to what we were hoping to get.
Digg places two types of ads at the moment.
1 – A front page ad that appears as every other story on the homepage, third from top on the front page, with a special marking that says “Sponsored Ad”.
2. Another ad is the inline ad that appears near the description of any ad. It occurs random I guess.
The good thing about these ads are that, they are relevant to the communities interests. Well, if they are not, you can simply bury them like any other story. So the ad that does not get buried much, means that the community likes them and therefore needs to pay less to digg than the ad that got buried more often.
Advertisers need to spend time making relevant and interesting ads that the community won’t bury. Well, if they do, then they pay more for it.
Win-win situation isn’t it ?
I think Digg has come out with an efficient model here, but definitely this is far from the best we could get.
I wonder what revenue model would Twitter come out with ? Will it come with a similar model where it pops ads based on what you would prefer having ? Or would they have something like where we could “like/dislike” ads that goes to everyone ?
What are your thoughts ?
What I think, is that Digg has been really successful in implementing this model. It takes time, effort and lot of research to come up with an innovative ad-serving platform like this. And looking at the community reactions, we know that people have liked this kind of advertising. Though, it can be improved further by location-targeting and being more accurate and display ads according to the user’s interests; which I hope should be implemented in Digg by the end of this year. According to me, I think its far better than the Google Adsense you see on websites or even the Facebook Ads which are usually so unrelated to the user.(Spam links, bidding sites, poker chips, matrimonials, etc.)
Also, as far as Twitter is concerned, it is very difficult to choose a revenue model apart from the regular options like Premium Accounts, Ad Platform, etc. all of which have drawbacks like:
1) Premium Accounts: Even if Twitter rolls out Premium Accounts for Corporate Identities/Celebs/Power Users, it would take time for the audience to accept it. And I think it would just limit its growing user-base. So Twitter should first concentrate on increasing its Users.
2) Ad Platform: If it creates a traditional Ad Platform like Facebook, or even partners with Google Adsense, it would be like any other website on the web. Though it would have more advantages than Facebook, real-time updates of users might get them to the directed ads.
Though Twitter has made enough money with its partnership deals with Google and Bing for real-time results, I’m sure its working on a better revenue-model, and it would hopefully be announced by mid-2011.
I kinda agree to what you said Ankit. I’m really curious to see what Twitter comes up with as a long standing business model, well if at all they’re going to rely on ads as a business model.
Feeling to see your site again & again with this excellent theme…
You’re welcome any time