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Summary:

The comments you leave on a website — are they garbage or a gold mine? Disqus says comments are more popular than you might think and has big plans to make money off them.

Disqus, a company that provides comment tools to websites, claims 42% of internet users read the comments after a story or contribute one of their own. The figure, which Disqus shared with paidContent, is gleaned from the company’s more than 2 million clients and provides new grist for the debate over how much reader comments add value to a website.

At one end of the debate are skeptics who think comment sections are cesspools of trolls and cretins. At the other end are publishers like Gawker’s Nick Denton and New York magazine who believe reader contributions should be a core part of their editorial strategy.

Are readers who look at comments worth more than regular readers?

It’s no surprise that Disqus is in the “reader comments are great” camp — after all, the company not only sells commenting tools but is also building up a second line of business dedicated to turning comments into a forum for advertisers . The service, called “Promoted Discovery,” does this by perching links to paid-for content right next to reader comments. It’s already appearing in the comment sections of sites like Mens Health and the Observer and it looks like this:

Disqus screenshot

As you can see above, the tool lets a website surface its own content on the left side while selling space in the right hand “recommended for you” box. In trying to tap this market, Disqus is competing with market leader Outbrain which also helps publishers and advertisers buy and sell web traffic.

Disqus’s big pitch to advertisers is that someone who takes the time to read the reader comments of a story is likely to be passionate about the topic — and more likely to click on, buy or otherwise engage with the proposed content. In its December “report card,” Disqus claimed readers who dwell in comments are more likely to visit other pages and spend more than twice as much time on the site. Meanwhile, reader comments overall are being treated with a new seriousness due to recent studies that suggest they shape perceptions more than we thought.

Big money from “native advertising?”

Disqus is also betting its promoted content will gain traction as a form of “native advertising.” The concept, hailed by some as a magic bullet to solve falling online ad prices, involves selling ads that mimic the content around it — for instance, sponsored tweets on Twitter. In the case of Disqus, the American Express story in the above graphic is a “native” ad. The company is so confident of the concept that it’s betting that the advertising scheme will soon become the bulk of its business.

“We expect advertising revenue to grow from less than 5% in Q4 of 2012 to over 60% of our revenue by the end of this year,” said the company’s CEO, Daniel Ha, by email.

It’s an ambitious goal but can Disqus pull this off? It has a number of factors in its favor, including the presence of veteran VC and native advertising champion Fred Wilson as one of its investors. The company is also in a good position to sign up clients due to the fact that it already has access to millions of websites.

On the other hand, the company’s quest to turn reader comments into gold faces some obstacles. One is Disqus’s capacity to find relevant content. When I visited several sites using “Promoted Discovery,” the suggested stories it proposed often had nothing to do with the article I was reading. A Disqus spokesman responded by saying the product is brand new and that its capacity to propose content will improve rapidly with use and as inventory grows. This seems a fair response — it’s likely Disqus will improve with scale.

The longer term challenge to making money from content is likely to hinge on publishers’ willingness to offer a service that will take readers away from their own website. For now, though, the websites are likely to simply welcome the extra money they receive from Promoted Discovery; Disqus says the first batch of checks is going out this quarter. It will be interesting to see what type of revenue-share arrangement Disqus and other middlemen will ask going forward — a Disqus spokesman wouldn’t disclose any specifics, saying the firm’s take is “industry average.”

And, finally, Disqus’s bet that comments will be an advertising gold mine could also be affected by competition from much larger players such as Tumblr; its founder, David Karp (who is speaking at our paidContent 2013 media conference in New York on April 17), recently said the site downplayed comments in favor of “a beautiful design and no jerks.”

(Image by ollyy via Shutterstock)

  1. Interesting info-thank’s for sharing:)

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  2. Myriad O'Truble Monday, January 14, 2013

    Disqus comments are good business for whom? For businesses who like to track comments and sell them for political and other questionable purposes. Disqus should scare us all. It’s just another way they are tracking everything about you. Disqus is like a plague. An infection that’s spreading anti-privacy disease all over the internet. Discus is fungus. Take Discus off your sites before it turns your readers to stone.

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  3. Disqus is a fine commenting product evidenced by their huge following. However describing their customer base as “clients” belies a finer point: one can call 2 million bloggers “clients” no more than one can call 60,000 followers “friends.” I think that Disqus, Livefyre and Facebook all fail to respond to the needs of publishers (i.e actual clients) in the following areas:

    1. Who owns the data?
    2. Who owns the user’s account?

    If the answers to those questions are not either the user or the publisher (ideally both), then they’re giving the farm away. While initially revenue sharing on promoted content may seem like a good deal, over the long-term what publishers can do with their own data and what their users will increasingly demand for their own.

    The WSJ recently exposed whom the top 50 web sites share user data with. Not surprisingly, companies like Disqus are in the mix. http://online.wsj.com/article/SB10001424127887324640104578165651354042798.html

    Alternatively, choose Realtidbits or Echo for your social layer. They are the only true white-label providers intent on protecting information for both the consumer and the publisher.

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  4. are they sharing the revenue with the content providers?

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    1. @jim yes, that’s what they claim.

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  5. Did anyone mention that disqus just turned this on without even asking their users? Terrible and unethical – sad what some companies do for quick money.

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  6. So, are they going to share the revenue with the content owners? ie. the people who post the comments.

    Another case of content stealing (see the story about the Washington Post swiping Twitter photos).

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  7. Hi.

    I head marketing and PR for Disqus. I just want to answer a few questions here.

    To confirm, we are sharing advertising revenue with publishers. Publishers can turn off or adjust the discovery features any time they choose.

    On the privacy front, we enable commenters to use pseudonyms. It’s a very common way that people choose to use Disqus. Using Disqus requires an email address, username and password. It’s a very low barrier to participation for those who choose to do so.

    If anyone has more specific questions, send me an email: sroy@disqus.com

    Thanks,
    Steve

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    1. So we readers are at the mercy of the publisher’s discretion- or naivete?

      And Steve, what you are really saying when you offer your assurance that commenters can use a pseudonym, is that commenters had better use a pseudonym unless they don’t mind Disqus mining their words for profit.

      When commenting on a site that maintains ownership of its content instead of handing it over to a carpet-bagging comment system, we readers feel like we’re part of a community, which is why we often don’t mind using our names or offering a link to our own site. But how do we know, when commenting on a site that uses Disqus, whether or not the site has sold us out? Do we now avoid all Disqus commenting or do we have a separate identity that we use on a site using Disqus, just so we can keep Disqus from selling our identity along with our words?

      While it’s true that we’re being sold out at almost every turn, I’d really rather comment on a site’s content without my own words being used for Disqus’ profit.

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  8. Disqus comments can be good for people who are posting only if they get noticed from that comment.

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  9. This is BS!. Straight up BS!!! I’ll be looking elsewhere for my commenting system.

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