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Digg Plans Social Ads

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NEW YORK Social news site Digg is rolling out its first major ad product, borrowing a page from Facebook by designing units that mimic the site experience itself.

The new Digg Ads will look much the same as other site content: a headline, thumbnail photo and link to another site. They will appear within the stream of headlines on Digg pages and provide the same options for users to "Digg" or "bury" links and leave comments.

Also in keeping with the site's general operations, users will have some say in what gets recommended: ads that accrue Diggs will be shown more often and those consistently buried will appear less frequently.

Digg is setting the ads apart with shading and notes that they are from sponsors. It plans to launch the platform over the next few months after gathering feedback from users and advertisers.
 
The new product is the latest in a series of attempts by popular social media sites to develop advertising that fits with their environments.

Facebook has rolled out engagement ads that appear within users' network updates and come with the same features as other site content, such as voting and sharing. Digg's model also mirrors an ad platform introduced in January by Reddit, a smaller social news rival owned by Wired. Like Digg, Reddit is displaying ads in the form of user-submitted headlines.
 
Digg hopes to differentiate with its pricing model. It will charge advertisers on a cost-per-click basis, adjusted based on how popular the ads become. Ads that draw a higher-than-average click rate and number of Diggs will see their CPC fall. Conversely, ads drawing few clicks and getting buried will see their CPC rise. Ideally, such a system would result in better advertising, rewarding efforts that are appreciated by users and punishing those that aren't.
 
"It's stealing from the logic of [Google] AdWords," said Chas Edwards, the newly appointed chief revenue officer at Digg.

Digg has an audience of over 27 million users, according to Quantcast. To date, its advertising efforts have been modest. Digg originally outsourced ad sales to Federated Media Publishing. Subsequently, much like Facebook, Digg outsourced its network ad inventory to Microsoft. It will continue to work "informally" with FM, according to Edwards, who is in the midst of joining Digg from FM. And Digg will continue to work with Microsoft for remnant ad inventory but plans to sell more of its own banners to pair with Digg Ads.
 
While Digg wants the paid units to mimic the broader site experience, the company is unsure whether to enable commenting on ads from its vocal user base. Digg will begin testing the platform with ads from Electronic Artists and Intel, both of which opted to include comments.
 
"It's going to be based on input from users and advertisers," said Mike Maser, chief strategy officer at Digg.
 
The advantage to the approach is that brands are more likely to be welcomed by the user community, said Edwards. Digg will work with advertisers to craft headlines and descriptions more likely to draw clicks and Diggs from users. In other cases, it suggests brands simply use already existing Diggs from users.
 
"We need to figure out ways for brands to borrow from the grammar of the experience," Edwards said.