Digg is putting an end to its exclusive ad selling relationship with Microsoft after two years, which is one year earlier than the deal was originally set to expire. Starting this Summer, the social news service will begin to rely heavily on its own internal sales force, which will be responsible for selling the majority of its ad inventory, reports Clickz.
Microsoft gets the leftovers, i.e. remnant inventory.
The partnership between Digg and Microsoft was initially supposed to last until mid-2010, but according to Mike Maser, Digg’s chief revenue and strategy officer, the two always had an understanding that Digg would at some point start selling the majority of its own ads. He added that the company’s internal sales efforts will focus on custom, non-IAB inventory combined with standardized banner ads.
This is not necessarily a sign that Microsoft was underperforming, although it’s clear Digg stands to make more money from advertising running its own sales. The move is not a surprise in that regard, and this type of switch happens regularly when websites grow enough to build their own internal sales teams.
In January, Digg hired former Yahoo sales exec Thomas Shin, its first ad sales executive, and is currently recruiting a nation-wide sales force. By the end of the year the company hopes to hire a total of five to seven reps in San Francisco, the Los Angeles area, Chicago and New York.
Ironically, Digg CEO Jay Adelson put the two following bullet points together in a blog post published earlier this year in which he highlighted what Digg’s focus in 2009 would be on its path to profitability:
- Building on our advertising infrastructure
- Building on our successful partnership with Microsoft
I guess we can now stop calling that last one a priority for this year.
I bet Microsoft is happy to get rid of this mostly useless ad inventory!
I agree.
Title could actually be “Microsoft Dumps Digg”
Everyone is developing ad platform. Good, more employment during recession.
Do you think Digg has serious shot of making decent money? People have been writing that most of the stories in Digg are written by like 200 people constantly (regular users). I don’t know, but do you think Digg can make profit, etc. etc.?
only if they work with Spotrunner:)
Interesting but I think they’re building an ad platform than using microsoft to fill the leftover inventory that they haven’t sold.
By doing that they can avoid having to pay a penalty, usually contracts are signed and they have to wait out the end before they can do this – but if they do want to break out earlier than they have to pay a penalty.
But if they build the platform, fill it with their own ads, and then use microsoft to fill up what’s left – they can still obey the contract and not have to pay that penalty.
No. Most of the users on digg are smart enough to use an ad blocker, so we never see any ads.
Agreed. I doubt Digg reaches its advertising potential due to ad blocking.
very interesting, i bet they will do well selling on their own direct… working in some custom deals, etc.
You can’t make profit on worthless sites.
I’d take 36 million uniques a month any day buddy.
Just ONE $10 CPM ad on that site can make over 350k a month. I bet they can sell campaigns well over a $10 CPM. And they have plenty of spots there, all targetable to each content section, you guys have no clue what you’re talking about or you’re just envious.
Digg will do well selling direct. Profitable magazines and local TV stations do well on less inventory because they sell direct to media buyers in major media markets. The ad network model makes little sense once you hit critical mass.
Digg will want to control head count in all areas and grow the sales team on a commission basis + health care. They should easily be able to ride the storm with direct ad sales to Hollywood, video games, fast food and tech which are all doing well in this recession. It’s nice that these map well to their mostly male demographic. They’re more than fine.
I’ve love to see the percentage of Digg users that use Adblock (or some variant thereof). I suspect that, catering to what is (against all appearances to the contrary) a technically sophisticated readership, it must be very high.
If I were Digg I’d stop people with ad blockers from seeing the pages, or make them pay a subscription. Simple choice – Digg charges people a subscription or they pay their bills via advertising. Anyone who’s not willing to accept one of these methods of stopping Digg from going bankrupt is just a leecher scumbag and should be blocked.
The day Digg starts to sell its services another business without that model will open up for free.
I am thinking about publishing where Digg gets 95% of the articles anyway….why bother with the conversations at Digg, just go to the sites, it is far more fun. I gave up on socialist Digg many moons ago.
For the most part now, the users are immature, liberal, socialists and Marxist. Currently the countries of Cuba, and Venezuela and far left sites and blogs target Digg users, whether they know it or not. Take a look at the materials being posted to Digg since before the run up to the election. KOS, KOSTV, Huffington Post, etc….stories about legalizing gay marriage and smoking pot.
I love Digg.
However, Digg’s obnoxious ads are the reason I have installed Adblock Plus. I hope they actually try to target their users with ads that their users want to see.
Agreed. How relevant is US Tivo to me in Australia.
It was bad when their ads were served from Microsoft. I’m in europe and used to get ads and MSN content assuming I was in New Zealand.
Title correction: Microsoft Ditches Digg Due to Poor Performing Ads; Digg Now On Their Own.
I love how TC has worded the title of this post to make it sound like it was Microsoft who got dumped.
Good luck doing direct ad sales. It’s not as easy as it seems. And with a company like Digg, which is the poster-child for Web 2.0 non-profitability, I’m sure they’ll manage to screw that up.
it doesn’t matter who ditched who but lets face it if MS was making a good return or saw potentional they would of just bought digg.
MS know the quality of the traffic and I think if it is prepared to walk away from the deal then digg investors should be waiting for a call some time soon for some more cash
I think it’s a very smart move by Digg. Stop bashing them just because they want to control the way they make money.
Eh…In this ad economy, I don’t see them doing better on their own, though with their traffic, they may do nearly as well. It’s a risk, either way.
Running the ads on their own Digg-servers/domain makes blocking the ads near impossible, since this is mostly based on a url-blocking scheme. They could also use a system where every other ad is followed by an interface item or something along those lines. This would leave blocking based on ad resolution (120×600 for a skyscraper) although the use of custom non-IAB inventory could mean something like pop-in interstitials (hope not).
Jeez, how complicated is it to make money? Just follow the Fark.com example. He’s doing rather well.
The problem is you get all these non-business types trying to come up with business models.
I was about to snap if I saw DIGG is slowly getting into affiliate marketing..LOL
I’ve been seeing Adbrite ads on Digg for a few weeks now.
Hi All,
I’m a little guy, run Linux, open source everything, I do blogs, web sites, forums, etc.
By my very nature Microsoft is not on my radar screen. I do Google Ads, but have been toying with Affiliate Ads programs – I have a Commission Junction account.
What the better Affiliate Program ready blogware? I’m also – in my small, small universe looking also to change. BTW, I get about 100+ hits a day.
Thanks in advance for constructive responses.
under such an bad financial and economic environment. many people is careful to spend money.
they need cheap, high quality product. as you know, during the past 30 years,Made-in-China spead in the world,China main land became the world manufactoy.
almost all famous brand Footwear,Apparel, Fashions if producted in China. the product export from China is
cheap, high quality.
B2C is very popluar in current world. buy product from B2C web site will save many money.
and post company,like UPS,FedEx,DHL,EMS,they can shippment product world wide very quickly and in an acceptable price.
Air Max 95 Spring / Summer 2009 preview
Wow, Digg is getting mighty ballsy arent they?
RT
http://www.privacy.pro.tc
Hi All,
I see content – and ownership – as king. There are better ad generators out there than Microsoft and Google.
Hey, let’s see what happens. I’m old enough to remember the idea of a “Portal”. LOL!
this really kinda sucks as google is going to end up being their backfill