Digg’s Lack of Ad Targeting is Hurting Revenue
By Trisha Lyn Fawver
Will they or won’t they sell social news site Digg? It’s been on the rumor mill for years, whether it’ll sell to Yahoo or Google, no one can tell. But I can tell you one thing – you can’t sell a sinking ship, and with Digg’s Miserable Business as reported at Silicon Alley Insider – they might need to launch a life boat or two.
I’d hope a site with the advantage of having over 20 million unique visitors each month would be apt enough to monetize the site wisely, but it seems with their recent losses in the millions of dollars, they’re certainly not making themselves attractive for any acquisition offers. Here are the numbers BusinessWeek got a hold of:
- Last year the company lost $2.8 million on $4.8 million of revenue
- In the first three quarters of 2008, Digg lost $4 million on $6.4 million of revenue.
- Digg wanted to sell for $300 million last year, but took funding this fall to set its valuation at $167 million
There’s a glaring problem with the site that can be fixed in no time that even Silicon Alley Insider points out – their failure to target their display advertisements, which I have to imagine is the vast majority of any income brought in by Digg.
A quick glance around different categories of the site makes it painfully obvious that they don’t display relevant ads to the visitors on very clearly categorized areas of the site. I clicked on Sports and a tragically MySpace-esq CPA ad asking me to correctly identify a photo of a young Angelina Jolie displayed, where a sports merchandise ad could easily have jumped at me and caught my interest as a person interested in the Sports category. Later, I went to Food & Drink and instead of an ad for a gourmet delivery service or restaurant finder, another CPA ad–this time asking me to correctly identify a photo of a young President-Elect Obama, flashed in my face.
It’s clear with almost all the deals made by Digg in the last year that they’re interested in selling the site while the selling is good. But being able to deliver good social content to users doesn’t keep the lights on, so they need to hire a marketing firm that knows what they’re doing or get some good savvy Internet marketers in there to shape up their advertising and remember that the site is a business and needs to be run accordingly.
Trisha Lyn Fawver manages affiliate programs, blogs, and explores the world of social media, all at TrishaLyn.com.