how digg can double its revenue (and not piss off it's users)
DESCRIPTION
As seen on Silicon Alley Insider's "How to fix Digg" contest here: http://www.alleyinsider.com/2009/1/five-plans-to-fix-digg----vote-here Explained here: http://innonate.com/2009/01/05/how-to-double-diggs-revenue/TRANSCRIPT
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Digg’s Revenue Problem
Possible SolutionNate Westheimer
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Premise Users come to Digg to
discover new content
Publishers and brands desire high ranking for press releases and articles
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The TechMeme Model Brands and
publishers will pay premium eCPMs to have their “article” (or press release) show up in-line with top stories on Digg.
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In-line Sponsored “News”
Sponsored Article:
Intel Now Has More Inside: http://intel.com/
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Phase 1 All sponsored articles
appear to non-registered / logged-out users.
Only sponsored articles “Dugg Up” appear to logged in users.
Hybrid PPC + CPM model
Targeted per vertical Continue to sell low-
performing banners DIY ad buying
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Phase 2 Sponsored articles
appear to all users Sponsored articles are
more targeted to users
Narrowed to PPC or CPM model
Advertisers can target per user behavior/interest
DIY ad buying & supported by sales staff
Continue to sell low-performing banners
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Business Assume 30M monthly
uniques Assume 90% non-
RUs Assume 2PVs/unique Therefore, assume 54
Million Page Views available inventory
Assuming $10 eCPMs for sponsored articles (higher than banners)
= $540,000 monthly revenue
= …
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Additional Yearly Revenue
$6,480,000 / yr(new revenue)
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Cash Flow Positive
$6,400,000 (existing banners)+ $6,480,000 (new revenue)- $8,480,000 (operating)= $4,400,000 (profit)