Posted 10/14/09 at 05:54:23 PM by Jason Barry

The New York Times got a chance to sit down with Chief Strategy Officer at Digg, Mike Maser, to discuss the overall success of the special ad-serving engine it integrated into its web service earlier this summer.

They worked on integrating their “social voting” mechanism into sponsored ad placement to provide sponsors and users with a better advertising experience. The users can digg specific ads allowing them to travel up the flow of diggs. Each ad’s cost-per-click is adjusted based upon its number of diggs—higher cost for lesser (buried) diggs. The idea is to encourage advertisers to create ads that are worthwhile to the user, if the ad gets buried, it gets expensive, urging the sponsor to pull the ad down.

Maser boasted that the new platform proved effective, “so far we’ve already tripled our revenue forecast from this initiative.” An Intel sponsored blog earned a 2.2 percent click-through-rate, others earning close to 3 percent, compared with the average regular display ad on Digg earning about .08 percent.

Have you noticed the ads? Have you clicked on any, or Dugg any? Considering the web will likely always have ad sponsorship, what do you think of the new model?

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Posted 10/12/09 at 10:15:24 AM by Pulkit Chandna

Online display ads account for around a third of the $40 billion online ad market. Advertisers mainly commission display ads to apprise internet users of their presence and not necessarily in the hope of immediate results. But click-through rates for display advertising have slumped to such abject levels that it is just too optimistic to expect immediate results with banner ads. 

According to market research firm comScore, American internet users are increasingly becoming immune to display advertising. A recent comScore study found that the number of American internet users that click on a display ad at least once every month fell by 50% over a 20-month period. But according to Andrew Lipsman, director of industry analysis at comScore, it is not always correct to measure the success of online ads with number of clicks as the yardstick.

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