Digg’s Rose shares insight on monetizing UGC: ad:tech SF

Kevin Rose, founder and chief architect of community content-ranking site Digg, shared his thoughts on how user-generated content can be monetized and used to engage consumers during this morning’s ad:tech San Francisco keynote. Evan Hansen, editor-in-chief of Wired.com, interviewed the entrepreneur.

Rose said that his site, which was largely founded to democratize content online, was now seeking to create a way for consumers to respond directly to advertisers about products and promotions.

“I’d love to see a world where if an ad is really crappy it gets thrown off the site – or we charge more for really crappy ads,” Rose said. The lack of direct dialogue with consumers, he said, was due to conservatism among advertisers and limited tools to constructively facilitate a conversation. He alluded to an upcoming release that would attempt to change the latter.

Digg, which launched in 2004, has 35 million unique visitors per month. Despite its large audience, the site reported a net loss of $4 million at the end of 2008. Rose, the company’s largest shareholder, said the site was currently building out its ad sales team in order to better monetize activity on the site. Digg is looking to add seven to 12 sales people to the current three staff members by the end of the year, according to Rose.

“I would be worried if it was just banner ads that we were trying to sell,” Rose said. While currently banner ads are the majority of the advertising that he has on the site, Rose said Digg would be pursuing custom sponsorships with advertisers and data mining of its audience.

“We’re looking at ways to expose data [from our site] in various ways in the future, [particularly] who are the most engaged users and what they are interested in.”

While Rose endorsed the use of audience demographics and behavior patterns as the best way to provide value to advertisers from social media activity that happens on his site and others, he was hesitant to guarantee results.    

“[The success of a new ad model] is still largely unknown, we are going to be experimenting just like everyone else,” he said. “However, the level of engagement with the ads is something that we are absolutely going to change.”

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