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Digg Users Determine Ad Rates by Relevance

Social news giant Digg announced a new ad platform called Digg Ads, which will let users control what ads appear on the website by voting up or "burying" ads, much the way they can "bury" stories.

Digg has struggled to generate a positive cash flow, and the company is seeking ways to bring ad revenue up: from hiring a top Yahoo sales chief, to ending its advertising relationship with Microsoft in favor of an in-house solution.

The "popular vote" model for Digg Ads is also beneficial to sponsors: the more positive votes an ad receives, the less costly it is for the advertiser, while too many "buries" will drive the cost up to the point that the ad is removed. This should encourage marketers to make their ads more appealing to Digg's audience, which will likely result in higher conversion rates.

Digg Ads will also appear within the stream – meaning they will be mixed with content, between news stories and pictures.

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In February '08, Yahoo launched a Digg competitor, Yahoo Buzz. It identifies top news and blog posts from around the web, based on user votes and search patterns. A "BuzzScore" rates news, video, images, or blog posts around the web. Both Facebook and Google added similar Digg-like functions to their newsfeeds and search results in 2007.

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