Digg is putting a new spin on targeted advertising. It is always the goal of advertisers to target their ads as well as they can, but when you advertise with Digg, it will cost you if they're not relevant enough.
Digg announced earlier this year that it would be introducing ads. It was hard to tell if users would find this to be a good idea or not, but the concept behind the ads seems quite user friendly. The ads are clearly marked as such, and users get to vote them up or down just like regular Digg content. Digg explains how it works to Digg users:
Your Diggs, buries and clicks influence a quality score that determines how often the ad gets displayed, and ultimately how much the advertiser pays per click. The more you Digg an ad, the less the advertiser will have to pay; the more an ad is buried, the more the advertiser is charged, eventually pricing it out of the system. The success of this system depends on your participation and feedback, as it will help advertisers to create the best possible experience for the Digg community. Our goal with Digg Ads is to encourage advertisers to create content as compelling as organic Digg stories, and to give you more control over which ads you see on Digg.
Advertisers pay less, the more popular their ad is. The less popular it is, the more they pay. To be successful with Digg's new advertising program, you're really going to have to offer what Digg users want. That means knowing what Digg users really like. So basically, you have to offer some kind of Digg-related product. After all, Digg stories are usually the ones that get dugg the most. I'm kidding (at least half kidding).
Either way, it will pay to really get to know the Digg community before just going for it and advertising your product. Study what kinds of stories are most popular. Get a feel for the kinds of content Diggers like. Then evaluate your product against that. Is it something that is really going to get votes with this crowd? If not, you're going to be better off spending your advertising dollars elsewhere. The less the Digg community likes your ad (or product), the more you're going to have to pay to advertise it there. There's not a whole lot of point to paying more for less enthusiasm.
Digg has begun rolling out the ads and they will appear in rotation in various places around the site. Right now, they're only testing them, so many users will not see them yet.