I was checking out the expanded Digg, and was intrigued by some of the numbers in a thread about Digg users based on a profile at Federated Media, which manages Digg's advertising. In addition to highlighting the all-male geekiness of Digg's user base, it also included the ad rates for each size display ad, along with an estimate that Digg receives 5 million unique visitors a month - with each visitor viewing 4 pages on average, for a total of 20 million page views. (NOTE: The original post didn't account for the 4 page views per user, so we have updated our math).
So how much will Digg 3.0 be making on ad revenue? It's speculative math, to be sure, but let's take a whack at it. The CPM (cost per thousand displays) rates for Digg's new design are $16 for 728x90 leaderboards, $14 for 120x600 skyscraper positions, and $9 for 125x125 blocks. The 125x125 slots often seem to be filled by Google AdSense ads, which will probably monetize at a slightly lower rate than $9 per thousand displays - but not much lower, given Digg's tech-related topics. So let's say $6 CPM for the 125x125 spots.
That works out to $36 per 1,000 page views for pages with all three ad positions. Here's what that works out to based on the percentage of those 5 million monthly page view bearing ads:
100 percent: $720,000 a month
80 percent: $576,000 a month
50 percent: $360,000 a month
Keep in mind that this doesn't include the $800 a week for text ads on comment pages, since the Federated Media profile doesn't provide enough information to make a reasonable guesstimate. So at current traffic levels, the top end could be reasonably estimated at a little north of $800K a month, which works out to $9.6 million a year.
That assumes the existing 5 million unique users, of course. Based on the number of diggs on stories today, it appears the redesign and expansion has attracted a surge in traffic. The additional categories will bring more users, which means that these guesstimates - to the extent that they're even close to real-world numbers - may represent the floor, rather than the ceiling. Of course, it all depends on how many ads Federated is selling, and whether the demand can fill those additional page views and ... sorry. My head will explode if I speculate any more. Anybody else got better math? If so, let's see it.
The Digg-obsessed Jason Calcanis, head honcho of AOL's new Netscape, takes note of the shift to three ads above the fold in the new Digg, as well as the fact that the home page and subject indices stick to a single 728x90. "Smart move... go light on top level ads, make it back on the second level," Jason writes. "We're doing something similar (this is the Google School of Design btw)."