Speaking to the Ad:Tech audience in San Francisco today, Rose talked about Digg's future saying ads need to be more interactive, print can't be saved, online publishers are in an incredible position and the importance of power users may be underestimated.

Update: Digg starts rolliing out its own ads

Digg's advertising needs have changed. At the beginning, "we had lots of servers falling over," Rose explained. The deal with Microsoft saved the day, allowing Digg to outsource ad sales while continuing to work on the product. However, Digg is now four years old, and banner ads are no longer enough. It's ready to build its own sales team, which currently stands at 2-3 and Rose estimates it could grow to 10-15 over the next year.

The site will focus on larger ad campaigns, and according to Rose, turn to its users. "If anything, Digg has users that like voting,' Rose explained, "and I would love to see a world that if something is really crappy, it gets destroyed or thrown off the site." Either that, he said, "or we charge people more for crappy ads," he added with a grin.

While he says he can't "guarantee" this type of social advertising will make it to Digg, it's certainly an attractive ideal. Rose explains that Digg is looking at ways that people can engage with ads, "so the second [an ad] goes up, it's not just about click-throughs; it's more about watching and seeing what [people] think."

Social Advertising?

Rose pointed to the Chevy SUV campaign that invited visitors to create and share their own ad copy on video clips. "It's going to happen," Rose said, and "I'm happy to push it and make it happen sooner."

The caveat, of course, is that Rose doesn't want Digg to be a platform where the only discussion involves comments like "that ad sucks." "I'd hope [conversation] would be deeper," he added.

Although he likes the idea of user involvement when it comes to advertising, Rose noted that there are two problems with these forms of social ads; people are generally conservative and scared to expose their brand in that way, also, the tools aren't there to foster discussion.

But, tools could be coming, and they could be coming to Digg. Last week, in an interview with Mike Arrington, Rose explained that Digg is completely revamping its site and expects it will be seen as a "ballsy move" when unveiled.

Rose on Cool Hunters

Rose, who removed the Top Users list from Digg two years ago, today said that they may soon make a reappearance, but in a different form. "We have these amazing users who have an eye for what the masses will enjoy," Rose said, and "it's important to highlight those people because they are valuable."

"In reality, he said, "they take on what is cool - they're very good at finding high quality content that other people will enjoy - and I don't mind [emphasizing] that"

"I think you'll see us expose that data in the future," Rose added, saying you'll likely get to see who the "tastemakers" turn up to be under specific categories.

Note: If you're interested in seeing Digg top users, Social Blade, which is not affiliated with Digg, maintains a list.

Rose on Dead Tree Media

"Dead tree media is...dead," said Rose, who believes we are entering a world of the personal brand, much like Gary Vaynerchuck described [video link].

The landscape has changed. "It's not necessarily about destination site," Rose continued, like the Wall Street Journal or the New York Times, "it's about the person writing the article." Walt Mossberg, for instance, will continue to grow his audience, regardless of where he is published, and Rose sees that as power. "He can move his fans and readers in any direction."

And with the transformation taking place in the world of media, it's an important distinction.

Asked whether Digg can help save the newspaper industry, Rose gave a quick, but succinct "no." Although Digg can't help save print, Rose believes it can absolutely empower the sites. "We can help them understand where their traffic is coming from and let them know more about their users and what they like." "And if you know what people like, you can serve better quality ads."

Whether you're a blogger working in your basement or a journalist at the New York Times, it makes no difference. If your content is good, it will get noticed by Digg's cool hunters. Yet not every social site can do this. While many have tried, (Reddit, Mixx, Yahoo Buzz etc.), Digg has always been the leader in consistently leveling the media playing field.

Why Digg? Well, we can't quite put our finger on it, but as Rose told Arrington last week, "I just feel that we're heading in a different direction than them." And at ReadWriteWeb, we agree. What do you think?

Update: It appears Digg is already rolling out is own ads, with the ad below appearing tonight, after the site was taken offline for a couple of hours. This comes not 12 hours after Rose gave his keynote at Ad:Tech earlier today.

Photo Credit: Flickr Affiliate

The good news however, is that communities offer the best bang for your buck in this miserable economy and Wales sees return on investment (ROI) as an "incredible steal right now," when it comes to consumer generated media.

Wales, who led the user generated content movement three years before the term Web 2.0 was coined, today told a standing room only audience that people fail to get their corporations off the ground because they don't focus on community. And in a recession, your community could be your saving grace.

"Wikipedia was really born in the depths of the dot com crash," Wales said. "With no investment money available, we had to figure out our own solutions as a community." "If there had been [funds], when problems arose I would likely have hired people to try and solve them," he explained. And according to Wales, this led to innovations in social rules and social institutions.

Wikipedia, the largest encyclopedia in the world with over 2 billion+ words, is the fourth most popular Web site in the world, with 301 million unique visitors monthly according to comScore. Its success is largely due to its passionate community and the content it produces.

Wales pointed to the Marvel community as another great example of a growing consumer generated content phenomenon, with the Marvel Database Project consisting of 49,864 articles and 50,427 images (as of today). Much like Wikipedia, this community of volunteers is passionate and focused on building very high quality content.

Contrary to Popular Belief, Consumer Media is a Great Place for Brand Advertising

Although most brands have been afraid to get involved with user generated content in the past, Wales sees this as a thing of the past because sites like Wikia, Flickr, YouTube etc. are becoming more dominant.

"The modern Web 2.0 space is not about funny cat videos any more or about angry ranting blogs," Wales explained. "If you look at what is happening, you'll see quality content - equal to magazines and television."

But with the plethora of advice being dispensed on the Web it is no wonder brand marketers are confused. "'You need to interact, to blog, to Twitter' is the general advice given today," said Wales. "And for some brands this is absolutely the right thing to do."

The caveat of course, is having a brand that is information dense.

Using Doritos as an example of a brand that won't make it in the consumer generated world (due to the nature of its brand), Wales explained "I don't believe there is ever going to be 50,000 [user generated] articles [written about Doritos]."

Another brand Wales points to is Skittles and its recent campaign, and explains that while it's a good gimmick, it's certainly not the future of Skittles marketing. "Interacting with customers [for brands which are not information dense] is not helpful," Wales explained. "But, if you have a brand that's being talked about online, you need to understand that although you cannot control what is being said, you do need to be there."