Better Living Through Technology: a blog dedicated to emerging
technology trends in hardware, software, webware, marketing and beyond
 
 
 



« New Technology Tuesday - 04/10/2007 | Main | Web 2.0 Wednesday Podcast - 04/11/2007 »

Why Google Loses Sleep Over the Digg Effect
Ed Kohler
If I was Google, this is something that would scare the crap out of me: Digg users don't click ads.

The first graph below shows the page views by day of a site I track which received two trips to the front page of Digg.com. It's pretty easy to tell when those occurred:

digg-pageviews.png

The second graph, shown below, shows the click through rates (CTR) of the same site on a day by day basis. Notice the two corresponding dips well below the average CTR:

digg-ctr.png

When Digg users come flying in, clicks drop. This isn't to say that revenue drops, because some do click, but the percentage who click is significantly less than that of the average visitor. In this case, while traffic increased dramatically (3-5x), the click through rate percentages dropped off as much as 75%.

Digg users don't click ads. Why does this matter? Because Digg users are sophisticated web users.

As more web users become as sophisticated as today's Digg users, click through rates will plummet.

And if you're business is based around making money off clicks, this is something that should be keeping you up at night.

Of course, this isn't only a problem for Google. It's a problem for every site that uses AdSense as their business model.



TrackBack

TrackBack URL for this entry:
http://technologyevangelist.com/cgi-bin/mt-tb.fcgi/893

Comments

1. Posted by: Davis Freeberg on April 11, 2007 9:40 AM:

I would agree that Digg users largely don't click on the Google ads, but I don't think that Google has anything to worry about. I don't have any evidence of this, but I would suspect that most of the readers that click through on an ad word are probably refered to the site by Google (or another search engine) to begin with. Diggers are there for just one reason and it's instant gratification, they aren't already searching for something. If there was a way that you could strip out the search traffic clickthroughs and compare clickthrough rates from Engadget readers or /. with the Digg army, I bet we'd see similar numbers.




2. Posted by: Benjamin Deneen on April 11, 2007 10:08 AM:

Great article. I believe the same can be said for paid search. If your target web audience is more sophisticated, the less you as a business should rely on paid search terms. With the exception of very specific search terms such as a model number.




3. Posted by: Dave Schappell on April 11, 2007 1:31 PM:

Honestly, I don't think Google's losing much sleep over this. Their time is better spent improving the targeted Ads on pages, improving the content type (video, graphic, etc.), and possibly targeting the referrer for the page (maybe different Ad types for users from sites like Digg).

Google and other PPC suppliers can't optimize for every user state (browsers vs. targeted searchers) any more than the website owner can.

While interesting data, I just don't think the conclusion you're drawing is tied directly to it.




4. Posted by: Eric on April 11, 2007 2:48 PM:

I think your basic assumption is wrong - the idea that Digg users represent some level of technological sophistication that the average web user will eventually reach. I'm pretty sure the world will always be divided into "techies" and "non-techies", and I don't expect the ratio will ever change much.

Further, one could say something similar about television advertising. There's always some segment of the population that just doesn't respond to ads - usually the smarter segment. Hence why advertising (and content, to a large extent) is tailored towards the stupider segments.




5. Posted by: Nate Koechley on April 11, 2007 3:34 PM:

Nice graphs, and interesting (if obvious) correlation, but I too think your conclusion is misguided.

As others said, the difference between Digg users and other traffic is in their goals and purpose. Digg users are curious why your link was dug, and want to take a peek. Nothing more. They're rarely doing deep research on the topic. More often, they're just entertaining themselves. Non-digg users are hunting for information. In this use case the ads may very well provide relevant info and therefore they'll click the ad after reading your page. Digg users aren't looking for anything except your content itself.

(Note that Digg and Techmeme and Reddit and many other traffic hoses are the same for our purposes.)

thanks,
nate




6. Posted by: Ed Kohler on April 11, 2007 4:06 PM:

Great points on the motivation of Digg users. That could certainly play a roll here. Of course, in some cases, it could have the opposite effect on CTR since people - after viewing the one thing they came to read - could leave through an ad rather than the back button.

Eric, I think the now infamous Long Tail graph is probably a good way to plot web user sophistication with Digg users at the far left. If the bulge moves to the right, or if the entire line moves up even slightly, there could be significant consequences for CTRs.




7. Posted by: Anne H on April 11, 2007 4:31 PM:

I think Digg users are different than other users, but I don't know if I would equate their behavior to sophistication. I've seem similar observations on my site.

I wasn't tracking AdSense CTR, but I was looking at their average time on my site. From what' I've seen they spend less time on the site than other users. This may go to the earlier post by Nick about them taking a peek. I just figured they were scanners.




8. Posted by: Jeff on April 11, 2007 4:47 PM:

I completely agree with Eric.
As they say the lottery is a "tax on stupid people". According to John Von Neumann's game theory, the best strategy for lottery is not to buy lottery. That maximizes your expected winnings, because it makes them zero, and with any other strategy they will be smaller than zero. Despite these statistical FACTS the lottery is more popular than ever.
Similarly there'll always be a segment of "non-techies" in the population around that will respond to ads. Furthermore history suggests that this ratio is unlikely to decline.




9. Posted by: MeTheGeek on April 11, 2007 4:57 PM:

You make a good point Ed. Your theory looks well funded to me.

Even "the masses" get more "sophisticated". For instance, they browse the Internet now.

So ads will have to get more sophisticated too. Google is working hard on that, but there are things that are going to get harder for Google to control.

The best performing links are the ones written in the article or post text, so smart publishers are doing advertising that way now.

How will Google and the likes deal with that? That is their challenge.




10. Posted by: Devang on April 11, 2007 11:12 PM:

They probably are more sophisticated, and it's entirely possible that they use adblockers more than the average internet user too. I wouldn't mind seeing similar data from a broad variety of sites that end up on the digg frontpage before making up my mind.




11. Posted by: Jim Karter on April 11, 2007 11:26 PM:

Yup. Looks really scary. :) My whole business is around adsense. :D




12. Posted by: blinky on April 12, 2007 12:41 AM:

It's not sophistication, digg users don't click ads because they are mostly children with no money to spend.




13. Posted by: amorson on April 12, 2007 3:13 AM:

And this is exactly the reason why Google are doing now both CPM campaigns and getting into CPA advertising.




14. Posted by: Eliena Andrews on April 12, 2007 5:09 AM:

Its very true that ppl who log into dig just read the article and forgets about other things like ads.. which is bad for adsense publishers..

Best Regards,
Eliena Andrews




15. Posted by: Haf on April 12, 2007 7:44 AM:

Hang on a sec:

Top 8 google adsense (individual) money makers (excluding major network site):

as of 9/26/06 from johnchow.com

1: Markus Frind: PlentyOfFish.com - $300,000 per month
2: Kevin Rose: Digg.com - $250,000 per month
3: Jeremy Schoemaker - $140,000 per month
4: Jason Calacanis: Weblogs, Inc. - $120,000 per month
5: David Miles Jr. & Kato Leonard - $100,000 per month
7: Joel Comm - $24,000 per month
8: Shawn Hogan – DigitalPoint.com $10,000 per month

I think - for now - Google can certainly go to sleep knowing that people do click... a lot.




16. Posted by: Daniel R on April 12, 2007 11:18 AM:

I'm not sure if this really applies to Google. Digg and Facebook have notoriously low CTR rates - people in social media websites are in very intense browsing mode, quickly going through links about their ex-girlfriend from highschool (facebook) or the latest Ubuntu hack (Digg). They are simply uninterested in any ads.




17. Posted by: Rex Dixon on April 16, 2007 11:52 PM:

To be quite honest, I have purposely laid out as many possible ads on my page. Testing a theory, seeing what will get people to click. I have had some pretty decent click numbers on the Google AdSense ads, but now checking out the affiliate things.

I'm getting a pretty good sense of what my users like to see. Yes, I probably am overkilling it, but is anything online really overkill?

Rex




18. Posted by: David Dalka on April 20, 2007 4:20 PM:

Nice quantification of a well known issue!




19. Posted by: Fitz on April 28, 2008 7:51 AM:

Very insightful, but I think the ones who should worry about are the advertisers of Google because this means they would have to find better text / images to use for their campaigns so that they'd get clicked.

I consider myself a sophisticated internet user but I do click on some ads if the headline / text / image interests me.

This study only shows that if your site traffic relies heavily on social networking sites / users, then you should experiment on your site's layout so that these visitors who are just craving for your content will take notice of your ads.

Just my two cents.




20. Posted by: Website Design on June 3, 2008 5:21 AM:

hey, i m calculation the CTR but i m not able to get the right answer, would anybody let me know what is the exact formula to calculate CTR??


i m using this one!

Impression * Click / 100 = ?


is it right??


Please let me know!!!!!

William
http://www.argosinfotech.com




21. Posted by: Japanese whisky on August 8, 2008 8:02 AM:

Nonsense. I know this has been said in a slightly round about fashion earlier in the comments but the difference is that normal visitors to your site are either searching for particular terms relevant to your article or are subscribers. Digg users are just less interested in what you have to say, have already heard what you have to say on the digg link page and have a tagbar full of digg tags to get though before they start their work day.




22. Posted by: Ed Kohler Author Profile Page on August 8, 2008 10:28 AM:

JW, sounds like your theory isn't that different from mine. However, I think the Digg = experienced web users theory I've proposed still holds water over a year later based on info I've seen online regarding the CPM rates on Digg itself. Thanks for sharing.




Post a comment

Required fields marked with: *
Name*:


Email Address*:


URL:
Remember personal info?

Comments*:

HTML Tags you can use in your posts:
<b>Bold</b> = Bold
<i>Italicized</i> = Italicized
<a href="http://www.othersite.com">Link to Other Site</a> = Link to Other Site


Please keep comments on-topic. Contact authors or other commenters
directly for off-topic conversations.

Notify me of future comments via e-mail



Technology Evangelist Digest - Free Newsletter
Sign up for the free Technology Evangelist Digest to receive daily updates, editorials, and practical advice on emerging technology trends in hardware, software, webware, marketing and beyond.

Technology Evangelist Digest will keep you up to date on the technology trends that will help make you more productive and efficient both in business and your personal life.

Let's face it: If you made it to this line, you must have found something valuable on this page, right? Think about how cool it would be to have something free and interesting to read every day from Technology Evangelist by signing up today.

1. Fill in your email below,
2. Then click on the confirmation email you receive.
3. That's it. Your first Technology Evangelist Digest will arrive within 24 hours.




Previous Entries:


Tag Cloud