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Widgets Are the

New Ad Units

Executive Summary badges


Web widgets are small modules of content that users can add
minis
or install to any Web page including social network profiles blidgets
and blogs. Brands use widgets to extend their brands beyond
their Websites, and to engage their customers in conversation.
modules
desklets flakes
Sixty-five percent of Internet users have interacted with a
widget, and U.S. companies will spend $40 million in 2008 to
create and distribute online widgets.
gadgets
But are widgets the future of advertising,
or just an Internet fad?
snippets

Authored by:
Raquel Krouse
Practice Lead, Social Media
IPG Emerging Media Lab
Watz a Widget?
Web widgets are small modules of content that users can add or install to any Web
page including social network profiles and blogs. Applications are widgets designed “These mini-applications—also called
for a specific platform, such as Facebook. Web widgets often use DHTML, JavaScript, “gadgets”—are simple bits of code,
easily dragged onto a desktop or pasted
or Flash. Widgets give Internet users a new way to experience the Web, and to interact
into a personal page, where they are
with content. Brands use widgets to extend their brands beyond their Websites, and to
constantly updated with whatever
engage their customers in conversation. Widgets also live on computer desktops and
information you want.”
mobile phones, but the focus of this paper is on Web widgets. —By Brian Braiker,
Newsweek/MSNBC
widg•et noun.1. appliance, contraption, contrivance, convenience, gadget, gizmo, gismo
widget noun. a device that is very useful for a particular job

Why Care About the Widget?


Aiding content syndication
Empowering consumers has become an important theme on the Consumers are likely to be found in niche Web destinations, making
Internet. The power of the online ad market has shifted from the seller it more important to reach consumers where they “hang out”—rather
to the buyer—who has more choices than ever before. Widgets give than forcing them to click through to a site. Widgets move brands
consumers ultimate control of what they see and interact with because beyond the single Website model and turn the entire Web into a content-
they are self-selected. comScore reports a total of 604 million people, distribution system, allowing companies to distribute their content to
or 65% of global Internet users, viewed or engaged with a widget in multiple locations.
March 2008. Widgets have multiplied as users of social networking
sites and personalized portals have increased. According to the Potential viral advertising
Interactive Advertising Bureau (IAB), UGC sites are projected to attract An attractive feature of the widget is their ability to spread virally. Viral-
101 million users in the U.S. and earn $4.3 billion in ad revenue by widget distribution turns customers into brand advertisers. According
2011; Advertisers are working to leverage this tremendous reach. A to JupiterResearch, users between 18 and 24 were six times more likely
Web page today can consist of content from multiple widgets. (YouTube to get their widgets from friends than from a company. Widgets spread
popularized the first major use of widget technology—all of the site’s rapidly because they can be easily shared and installed on a page;
embeddable videos are actually widgets). Ad serving companies and when someone adds an application to their profile on Facebook, they
ad networks are adding the ability to support ads which consumers can are asked to share the application with their friends and a notification
take with them, making advertising a portable widget. of the install appears in their friends’ News Feed. But going viral is far
from a guarantee—there is vigorous competition for attention. A recent
Adonomics report cites that of 13,000 Facebook apps in January 08,
only 52 had more than 100,000 active users, and just 141 reached one
million installations. It’s important to keep in mind the possiblity that
your widget may go nowhere. It shouldn’t be the sole campaign focus
and should be included in a wider Internet program.

“A consumer who downloads a widget is a hand-raiser and


thus extremely valuable to marketers. But the viral part of the
equation is a huge challenge.”
—Debra Aho Williamson, eMarketer

2 | Widgets: The New Ad Units


“App”-vertising 2 Brand an existing widget or application:
There are opportunities for brands to sponsor or
Widgets and apps allow brands to communicate directly with integrate within popular existing applications.
consumers and engage users in the social Web. Successful applications
have shown to create more engagement with the brand. However, social
networks are difficult marketing environments: Traditional banners,
buttons, and interstitials haven’t worked well in social spaces. On the
other hand, widgets are being turned into advertising delivery systems.

Here’s how:

1 Advertisers can create their own widgets:


Depending on the complexity, apps can cost $20K-100K to build.
There are typically ongoing hosting costs which range from $3K–10K
Custom designed greeting cards for the movie “Step Brother”
a month, for as long as the application is live.
were integrated on Rock You’s SuperWall, resulting in 8M
impressions on application pages and 6M cards sent.

3 Buy ad space within a popular widget or application.

Forbes.com advertised right inside the CNN widget.

4 “Ad widgets” are simply widgets that are built to


the standards of online advertisements, and can
be deployed through an advertising network for
distribution and advertising placement. The ad unit is
Microsoft launched the OfficePoke! application allowing users to interact with the application, and the media is in the unit.
their colleagues. User can throw a stapler, report to HR, swap chairs, etc. In
just a few months, 250K users have sent over 2 million pokes generating tens of
millions of branded impressions.

“Advertisers and consumers have played a game of cat and


mouse for years. As we’ve learned from the ongoing upheaval
in the entertainment industry, online advertisers have to
adapt their approach to match consumer behavior, or risk
irrelevance. They need to move beyond glorified billboards and
deliver useful, engaging applications people will want to use
and share.”
—Peter Yared, Business Week

3 | Widgets: The New Ad Units


The Widget Industry
Several company types dominate the widget industry,
Widget & Application Advertising Spending
and offer a variety of services including design, Advertising activity in the space is growing, and mainstream brands
development, hosting, distribution, viral promotion, are launching their own widgets and applications. Established Internet
tracking, and optimization. advertising companies such as Advertising.com, PointRoll, and
Viewpoint are adding widget capabilities to their offerings. Additionally,
Widget Production: Custom widget and application
new widget networks are making it easier for marketers to distribute
developers
their widgets to consumers. eMarketer projects US companies will spend
Key Players: RockYou!, Slide, Clearspring,
$40 million in 2008 to create, promote, and distribute widgets and
advertising agencies
applications, up from $15 million in 2007.
Widget Platforms, Distribution, Advertising &
Analytics: Distribute widgets, sell advertising, host
widget ad networks, provide tracking and metrics
Open Platforms Increase Widget Activity
analysis Applications made a big show in 2007. This was, in large part, because
Key Players: Clearspring, Gigya, Slide, Widgetbox Facebook opened their platform to independent developers in May 2007,
with the goal of making the platform more fun and engaging. There
Widget Platforms: Web pages where widgets and are now over 21,000 applications on Facebook, totaling 900 million
applications are ultimately installed including social installations. More than 95% of Facebook users have added at least
networks, blog platforms and bookmarking sites one application to their profile since the May launch. In 2008, there will
Key Players: Facebook, MySpace, iGoogle, Bebo, be increasing activity in the widget space as marketers continue to
Blogger, Netvibes, Live Spaces test formats and distribution, and as other major Internet companies
including Google, Yahoo!, and MySpace open up their platforms and
underlying code. New applications based on Google’s OpenSocial
initiative are spreading the open platform concept: Third-party
developers are building more sophisticated apps, and are constructing
their own (or joining advertising networks) to monetize their users.

Best Practices for Successful Widgets


Thinking about creating a widget or application?
■ Ensure it meets the overall campaign objectives
■ Set expectations - Development can be costly and there is a high
Widgetbox is the world’s largest competition for users’ attention
widget directory. ■ Develop with the user benefit in mind - The advantages to the user
will drive success. Think about who you are trying to reach and
what type of widget you want to create (self-expression or social
interaction). How can you use technology to make someone’s life
better, easier, more productive, or effective? How will you create
sticky content and get users to come back to the experience again
and again?
■ Make it flexible so you can leverage across multiple sites/platforms
(Facebook, OpenSocial, iPhone)
■ Leverage experienced developers
Gigya provides tools to help distribute
and track widgets.

4 | Widgets: The New Ad Units


Measuring Success
Marketers should consider their widget measurement strategy and
define widget metrics which reflect goals and desired outcomes
at the initial stages of development. Tracking within widgets can
be measured using traditional Web analytics tools to capture
Conclusion
interactions, clicks, and engagement time. Firms such as Clearspring Different perspectives on the marketing potential
and Gigya measure widgets to quantify attraction, engagement, of widgets exist. Some believe widgets are
conversions, and distribution. Audience measurement companies such the future of advertising and others insist
as Quantcast and comScore measure the potential advertising value widgets don’t work - that they are a fad and
of widgets. Unfortunately, insight into how widget-use can affect have difficulty reaching the right target. Still,
brand awareness or purchase-intent is not widely available without widgets are providing a new and unique way to
user studies. reach millions of social media users. They allow
companies to use syndication strategically,
and to leverage the Web as a platform for their
Widget Performance Metrics content and services. But it’s not as simple as
creating something cool and hoping it spreads
Attraction virally. It’s about understanding audience habits
■ Viral distribution and determining what they desire, creating
■ Total widget views rich experiences, and engaging users through
■ Unique widget views dialogue and relevant content. Successful
■ Number of downloads social widgets give users tools that allow them
■ Geographic distribution to connect, collaborate, and personalize their
■ Page placement experiences There are thousands of competing
■ Events (e.g., play, pause, click) widgets out there, so the idea is not to rely on a
■ Average impression time single application, but to think of a widget as a
■ Average interaction with widget useful extension of your brand.

Engagement
■ Widget click-through rate
■ Ratio of impressions to clicks To talk more about how widgets are
■ Widgets served per day impacting brands, or to explore project
■ Ratio of views to conversions possibilities, contact Raquel Krouse at
■ Ratio of impressions to site visits raquel.krouse@ipglab.com

Conversion
■ Direct sales lift from widgets
■ Referral sales from widgets
(JupiterResearch 02/08)

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