Muhammad Saleem is a social media consultant and a top-ranked community member on multiple social news sites. You can follow him on Twitter
By now you have probably read the countless articles about how flawed the contextual advertising system is on Digg. The system at Digg is certainly flawed, but not just in terms of contextual advertising. And one site - StumbleUpon - it seems, plans to capitalize on those flaws (and very well might be successful in doing so).
If you’re a successful online publisher, service provider or Internet marketer then you’re probably well aware of the advantages of using (not exploiting) social news sites. If your site or service falls in a niche that matches nicely with the vertical (and demographics) of a particular popular social news site then you stand to gain hundreds of thousands of visitors by creating content for the audience of that particular site. The problem, of course, is as people realize the importance (or viability) of social news sites as marketing platforms, many of these people try to exploit them with poor content and then pushing it via brute force promotion, buying votes, using multiple accounts, and other terms of service and use violations.
To prevent such people from ‘gaming’ the system by inflating votes, the social news sites increase the sophistication of their promotion algorithms by making the ‘gaming detection’ more robust and demanding a higher degree of diversity in votes on a story before it can be promoted and get the traffic (which at that point the algorithm deems deserved).
It seems, however, that this increased sophistication doesn’t always work as planned and often penalizes certain users and sites more than it should, and in many cases overzealous moderators (on social news sites) end up banning users and sites for spamming activity or other terms of use violations. Because of this, these social news sites incur the ire of many users in the social news community, independent publishers, as well as marketers, and often rightfully so.
A different approach
Ultimately, these sites have established terms of use and service and they are well within their rights to make the decisions, however detrimental they may be to the community and the long-term profitability of the sites. On one end we have Digg, that has long raged a war against marketers and often the very people that helped build the community and is quite often criticized for it very vocally. At the same time, the site that was once a beacon of hope for the independent publishers, now seems resolutely aligned with the mainstream.
But on the other end, we have StumbleUpon which has decided on a markedly different approach to solving its problems. StumbleUpon bans users that are seen to artificially inflate votes on content because of the terms of use violation, but then offers a viable alternative to those who want to legitimately use the service to cash in.
A look at revenue
StumbleUpon’s 2008 expected revenues are approximated at $5-7.5 million. At the same time, Businessweek estimates that in the first three quarters of 2008, Digg lost $4 million on $6.4 million in revenue. While I don’t know the costs to run StumbleUpon, it’s fair to assume that they are far less than running Digg, not only because StumbleUpon is substantially smaller in terms of users and monthly traffic, but also because the service doesn’t require the same number of servers or have to deal with the bandwidth costs that destination sites like Digg do.
So how does StumbleUpon manage to make comparable revenues to Digg with far less traffic (as a destination) and a substantially lower number of users, while not alienating marketers and publishers? It’s quite simple actually, and considering that it’s no secret and nothing new, it’s surprising that no other social news site has been able to do something similar. StumbleUpon uses a two tiered approach to making money while keeping the community, the marketers, and the publishers happy.
1. Sponsored Users - while a free, basic StumbleUpon account has everything that most users will ever need, the service allows you to upgrade to a sponsored account for a modest fee.
2. Sponsored Stumbles - to resolve issues with marketers and publishers, StumbleUpon allows them to buy traffic from the service. Before you start thinking that paid traffic pollutes the integrity of a trust-based social news site, consider their justification: the whole purpose of the site is to determine the preferences of a user based on his or her habits (thumbs up or down) on the site and then continue to send the user targeted sites. If the service performs its functions well, then it shouldn’t matter if the content is sponsored or not, because in either case the content is relevant to your interests based on StumbleUpon’s recommendation engine.
Rather than outright banning users for violating the terms of service, StumbleUpon sends them the following email while putting their accounts under review.
Our Terms of Service prohibits members from creating multiple accounts without permission or using a StumbleUpon membership to promote a specific site, business or product. If you’d like to advertise on StumbleUpon, please visit this page for more information: http://www.stumbleupon.com/ads
Why hasn’t Digg been able to monetize?
Going back to the original point for a moment, the reason why Digg hasn’t been able to monetize the site is partially because over half the users don’t actually view the ads (on Digg or the sites they click out to) and the ones that are able to see ads aren’t clicking on them because the ads just aren’t relevant to them, but just as important, it’s because they haven’t been able to leverage the audience with the publishers the way StumbleUpon has managed to.
In fact, Digg doesn’t even seem to have a plan in place to do so. According to statement from Jay Adelson from last month, here’s the monetization plan for Digg:
The company recently started to sell ads on its RSS feeds. It is on the verge of launching a revamped version of its homegrown search engine that the company hopes will produce more relevant and profitable search advertisements. And it is within a month of closing a deal with a mobile ad provider to sell more ads on cell phones.
The answer is pretty straightforward, Facebook figured it out with Beacon (though they butchered the implementation) and StumbleUpon figured it out a long time ago. Leverage the demographic goldmine you have to understand your target audience, then use your collaborative filtering and recommendation engines to nail down the exact preferences of your patrons, and finally give them what they want, but charge the people whose content you’re delivering. Targeted traffic (and audience/community building) doesn’t get better than that.
Also noteworthy, StumbleUpon, which has recently unveiled a new design, has upped its efforts to increase revenue, and in a surprising but very intelligent move, has started to market its paid traffic service to the Digg audience.
Keep in mind, eBay has done virtually nothing with StumbleUpon so far but has plenty of options to explore. Perhaps Om is right, maybe Digg should buy StumbleUpon (or the other way around considering the underdog is profitable).
Interested in Digg and StumbleUpon Resources?
- HOW TO: Get the Most Out of StumbleUpon
- Diggs Recent Bans and the Limits of Crowdsourcing
- Digg Toolbox: 50+ Digg Tools and Resources
Image courtesy of iStockphoto, SteveChristensen
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What it does
Online ad revenue is going down the drain. Everyone is feeling the crunch. In times like this, innovation is sure to spring up, and ToonieAds.com is a great example of this. Through the site’s service, you’ll be able to hire advertising in monitors placed in different places. For example, if you have a pharmacy, the site’s service will let you place an ad in an affiliated doctor’s office. This allows you to target the right audience, letting you do more business. This is a creative alternative to advertising online. By signing up to the network, you’ll be able to have your ads reach thousands of people in the right place, all by placing just one ad. Prices are as low as $2 a day.
This means that in a month, you could invest as little as $60 dollars and still get advertising that is more likely to give you results. Overall, this is a great service that should be looked into by anyone looking to get more out of their advertising campaigns.
In their own words
“Our mission is to provide a network by which individuals and businesses can advertise economically, have control over their target market and have access to starting and stopping their advertising campaign as they choose.”
Why it might be a killer
This could allow smaller companies to have more effective advertising campaigns. It should be interesting to see how this grows.
Some questions
Will companies like this kind of advertising? Will it be effective in the long run?
Link: http://www.toonieads.com
Our Review: http://www.killerstartups.com/Marketing/toonieads-com-an-advertising-alternative
In their own words
“Business Services UK are established Internet marketing consultants, providing low cost promotional services to the small business community. Our methods have improved the ranking of all the websites we have worked on. Our low cost solution is very popular with the small business community especially in the current financial climate.”
Why it might be a killer
Consolidating a presence on the World Wide Web is made possible by the provided services, and these services are rendered in a cost-effective fashion.
Some questions
How can I have my company listed on the provided business directory?
What it does
A provider of Internet marketing services that is based in the United Kingdom, Business Services UK can be reached online at www.businessservicesuk.com. The company specializes in depth consultation sessions (provided either 1-1, or via telephone), along with web development and design, keyword research and link building services.
Business Services UK is renowned for the services it renders to small companies, as the featured low cost solutions are specially suited to the current financial situation we are all learning to cope with.
The site also offers free services by way of free classified ads, a bookmarking service and a free business directory. Moreover, a collection of well-researched articles can be easily accessed through the main navigation menu. This menu will also enable you to browse through testimonials, in order to have an even better representation of the company and how it can help your site achieve a better ranking.
Establishing a presence on the World Wide Web is not necessarily an easy task, and it is always convenient to have professionals handling the tricky stuff for you. If you are looking for a solution that will accommodate your budget and let your site truly go live, this site is a good starting point.
Link: http://www.businessservicesuk.com
Our Review: http://www.killerstartups.com/Marketing/businessservicesuk-com-search-engine-optimization
Some questions
How will this project evolve as time goes by?
In their own words
“We are a small team of developers trying to bring together the best advertising platform on the market.”
Why it might be a killer
The provided advertising platform is suitable for all bloggers and webmasters, as the ability to offer promotional codes gives advertisers the chance to see how valuable their ad slots could be.
What it does
Acrux Ads is an Ohio-based company which offers an advertising platform to take control of your self-service advertising needs. With the provided marketplace and promo codes, selling advertisement space on any website becomes a supple task indeed.
This marketplace features a shopping cart for purchasing large ad campaigns, search functions to target any audience, and an advertisement tracker feature to track the statistics of any given campaign. Moreover, by searching through the available profiles, advertisers can find free or discounted ad spaces easily.
For publishers, the company offers the ability to sell ads directly from websites and from the marketplace. For instance, if you sell an ad from your site, you keep 95% of the revenue after credit card fees. Transactions are handled via the web commerce company PayPal - after you sell an ad, the money is deposited right into your account. Publishers can then track statistics to see how well their ad slots are performing.
As you can see, all the elements for coming up with a new and viable advertising platform are firmly in place. Visiting the site is definitely an interesting proposition if you are currently looking into ways of consolidating your presence on the World Wide Web, and it is certainly a healthy start towards reaching a bigger audience.
Link: http://www.acruxads.com
Our Review: http://www.killerstartups.com/Marketing/acruxads-com-a-new-advertising-platform
Looking to make the case for why your organization or clients should be using social media marketing? A survey last month, highlighted today in eMarketer, outlines the benefits that marketing executives cite as reasons to embrace the medium:
Not surprisingly, customer engagement takes the top spot, with 85.4% of respondents citing it as a benefit of using social media marketing (perhaps the better question is, who are the 15% of respondents who didn’t see that as a benefit?). More interesting is that direct response – defined as “great lead generation source” in the list of benefits – was only cited by 21% of execs, implying that most execs don’t see the medium as having a direct impact on sales.
Will that make it harder to make the case for social media marketing as a part of leaner ad budgets in 2009? With 51% of respondents also citing “low cost” as a benefit, I think the case can still be made that social media marketing is a viable medium for driving customer growth next year. But, it could be challenging, given the more immediately tangible results you can see (or not see) from more traditional online ad buys like pay-per-click or affiliate marketing.
What are you citing as the main benefits of social media marketing with your company and clients? Are you optimistic for ’09? Share your thoughts in the comments.
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What it does
Wozad is a new service that intends to take contextual advertising to a whole new level altogether, by creating what is termed as behavioral advertisements. According to the site, these result in added clicks because the information reaches the user in a more relevant way. This is because the ads themselves stand unobtrusively and do not get in the way of the site’s visitor.
This platform has launched this week, and for the time being you can test it out and see the way things could turn out and the income you could receive by using a virtual balance that is provided, and set the daily budget and the cost per click. As soon as the beta period finishes, you will be able to start funding an account using real money.
On the other hand, if you are a publisher and decide to give Wozad a try you will eventually receive a 10 % bonus on your real profits from Wozad Ad units as soon as the service launches.
Taking into account the impact that contextual advertising has had in the world of e-business, this new approach stands as an interesting development. Only time will tell the position it can eventually occupy and whether or not it can stand as a truly viable alternative. Consider paying the site a visit in order to start forming your own opinion.
In their own words
“Earn more money with behavioral ads on your website, and reach your ideal customers based on their surfing habits.”
Why it might be a killer
It is an interesting development that has the potential to modify the existing approach to web-based advertising.
Some questions
When is the official launch date?
Link: http://www.wozad.com
Our Review: http://www.killerstartups.com/Marketing/wozad-com-the-evolution-of-contextual-advertisement
In their own words
'Outsource your affiliate marketing and generate revenue from your content easily.'
Why it might be a killer
It offers any publisher added outreach and visibility.
What it does
Skimlinks is a service that is geared towards publishers who are looking into a viable approach to affiliate marketing. Basically, clients focus on their community and the content that they want to get across, while the company takes care of merchant management and tasks such as network synchronization and the addition of links.
In order to use this system, the client has to add the skimlinks plug-in to his site, and content links which are created from that point onwards are automatically turned into affiliate links. If the user ends up making an actual purchase by following any of them, then a commission is paid to the client.
So far, the system is a publisher-only service, and merchants are not offered direct services. They can, however, request to be added to any existing program to become part of the system. It will be quite interesting to see if services geared solely towards merchants are implemented in the future. For the time being, this site stands as an interesting resource for publishers wishing to maximize revenue via affiliate programs which are easy to implement and put into practice.
Some questions
Will support for merchants be eventually introduced?
Link: http://www.skimlinks.com
Our Review: http://www.killerstartups.com/Marketing/skimlinks-com-outsourcing-affiliate-marketing
What it does
Are you looking into a way of spicing up your venue and increasing the level of engagement of your customers? If that is indeed the case, a visit to this site might just be a good option.
In essence, ScreenScape is a cost-effective way for publishing to an Internet-connected computer screen. Such a tool is suitable for any entrepreneur or person who has to inform or entertain a large group of people at any physical location. In addition to being employed as a computer-driven screen display, this solution easily accommodates marketing and promotional tasks.
Configuring and managing the display is easy, as all you have to do is visit the ScreenScape homepage and accessing your account. ScreenScape has the advantage of being wholly network-based, and you don’t need to incur into software downloads of any kind. All you need is a web-enabled computer with a browser and a display screen to go with.
Of course, the screen itself is fully customizable, and you can choose your logo in order to accompany the contents that are displayed.
As a conclusion, this is a good way of promoting any given business that can complement other forms of advertising, and which is provided at a fair rate. Check it out for yourself at the URL displayed below in order to draw your own conclusions.
In their own words
“ScreenScape is a smarter, simpler, and more cost-effective way for anyone to use screens in their venue. We provide an Internet-based service that allows you to create and share content for publishing to an Internet-connected computer screen.”
Why it might be a killer
It is a convenient way of reaching customers and spicing their interest.
Some questions
What operating systems are supported?
Link: http://www.screenscape.net
Our Review: http://www.killerstartups.com/Marketing/screenscape-net-screen-displays-made-supple
Why it might be a killer
It is a useful marketing tool that can make things more transparent as far as web commerce is concerned.
Some questions
How much do you have to pay for this service?
What it does
To put it in simple words, ReviewScale is a web-based service that will let you improve your online reputation. This is done by letting you capture your customer’s feedback, ratings and testimonials. Upon joining the site, you can create a review form that will eventually list the strengths of your company. This review will let you set down which aspects you want your customers to rate.
Once you have collected enough information, the review can then be published on your site or blog. Besides, the review can be published at the Review Scale website, in a bid to reach a wider audience.
One of the main advantages of featuring a review is that it addresses concerns that new potential customers might have, and maybe it will help them make up their minds about going for your company or not.
Lastly, it is important to stress that you can keep the reviews you collect as private. Such an option can be used to gather feedback, or for garnering several reviews before making them available to the general public. This way, they will have a better representation of your company by sifting through a bigger share of testimonials and related materials.
In their own words
“ReviewScale is an online service which helps in improving your online reputation by providing online tools to capture your customer’s feedback through reviews, ratings, recommendations and testimonial forms. When you join, you can start creating a Review form for free with an easy to use editor. Using the editor you can set weightages to your questions. This will help you highlight the strengths which your customer’s can rate. An automatic score is calculated across your reviews.”
Link: http://www.reviewscale.com
Our Review: http://www.killerstartups.com/Marketing/reviewscale-com-improving-your-online-standing
What it does
Want to spread the word about your favorite items and products over the web, and generate an income in the process? If that is indeed the case, this site might just be what you have been looking for.
Essentially, the Favorite Thingz website enables you to publish your favorite brands, items and people to a badge that can be added to social sites such as MySpace and hi5, as well as the blogs you habitually visit.
This way, you can raise awareness about your best-loved retailers and artists, and whenever someone clicks on the favorite thingz that make up your badge you are paid a small referral sum.
As you can see, this site is a splendid resource for those who are looking into earning some money just be stating their allegiance to artists or products they are fond of. You are advised to follow the provided link if you want to try it out and see whether it clicks with you or not, and if it is the potential source of income you have been looking for.
In their own words
“FavoriteThingz.com provides a simple, fast, and reliable service that enables publishing a badge/ widget of a user's favorite bands, movies, teams, stores, services, and brands. FavoriteThingz.com helps users promote brand awareness and brand loyalty of their FavoriteThingz. The FavoriteThingz.com badge/widget can be directly linked from to any site that accepts our badge/widget, including popular sites like MySpace, LiveJournal, Xanga, Friendster, Tagworld, Typepad, Blogger, and hi5.”
Why it might be a killer
It enables anybody to earn a revenue in an effortless manner, just by showing his support for any given artist or product.
Some questions
Do you have to pay anything in order to register at the site?
Link: http://www.favoritethingz.com
Our Review: http://www.killerstartups.com/Marketing/favoritethingz-com-raising-brand-awareness