Reddit Figured Out How to Monetize Social News. Will Digg Listen?
by
on January 03, 2009,
Of course now that the major question for many online companies is that of monetizing the resources they have, we will see new innovative approaches to making money off traffic and users everywhere. The recent example that definitely deserves noting as it offers a direct road to the bright future for quite a number of our favorite web projects is that of Reddit, the social news website.
Reddit is well-known for its intellectual audience that is usually supposed to be more grown-up than that of Digg - hence one can often find stories here that will be more thought-provoking that anything one can ever see on Digg. And while Digg is still struggling with its advertising trying to monetize the huge traffic, Reddit has figured out a totally new model that will probably turn into a success for the site.
The new idea introduced by Reddit is to offer sponsored links in addition to regular user-submitted links and offering them some extra exposure. Such paid-for links appear among the regular links in the New Links box right at the home page of Reddit but are distinguished by the blue background and also by the “sponsored link” text in the corner. The most interesting part is that users can vote such links up or down, comment on them or hide them same as they do with regular links - so if a sponsored link is good enough to attract attention from Reddit users, it will also be featured prominently on the home page among popular links.
Of course it is no surprise that the Reddit team had to offer some explanation that sounded more like an excuse to its users trying to persuade them that advertising is “a fact of life on the web”. I have seen quite a number of animated discussions on Reddit about online advertising and my opinion is that the Reddit community is totally unwilling to accept advertising so it is pretty logical that there are already tips on how exactly one should configure the ad blocking browser plugins to avoid such sponsored links as well. But at the same time there are also users who seem to understand the reasons behind this decision pretty well and realize that there favorite online community needs to make money to support its operations. You can watch (or join) animated discussions both on the announcement post at the Reddit blog and on its sponsored submission to Reddit as well.
I have not found any information on how much it is to buy a link on Reddit: advertising on Reddit requires initial inquiry to the site’s team so it’s not like submitting a link and paying with your PayPal balance right away. I myself think that this new model with sponsored links will work much better if it offers something more automatic to buy links. If it is possible to go and buy a link to any new website you launch or a blog post you really want to be seen (and are prepared to pay for it to be seen), I have a feeling that the demand here will be pretty good. A similar approach has been practiced for some time by StumbleUpon and I think Reddit joining the trend is a good sign as it will probably be the example of how social news websites can be monetized instead of pushing meaningless ads to the community that can’t even say anything about these ads.
