14 Comments

Summary:

Brand and comparison advertising done through ad-focused widgets is emerging as a viable way of using the ubiquitous applications. Widgets’ interactive features, their ability to be virally distributed and potentially be placed on a target’s own page makes the creations appealing to advertisers.

Selling advertising on entertainment-focused widgets such as Scrabulous or Zombies is about as easy as spinning straw into gold, yet there are plenty of people trying. And there are ways of generating revenue through specially focused widgets designed solely to sell rather than toss sheep. Brand and comparison advertising done through ad-focused widgets is emerging as a viable way of using the ubiquitous applications. Widgets’ interactive features, their ability to be virally distributed and potentially be placed on a target’s own page makes the creations appealing to advertisers.

Where that leaves startups such as RockYou and Slide, which develop entertainment widgets, and the ad networks that cater to those applications, is still unclear. I’m waiting to see if enough users buy into ads shown on their fun widgets or click through enough transactional widgets to make a viable business. However, existing online ad networks and possibly a few new widget creation and advertising firms are already proving that widgets aren’t just fun and games.

WidgetBucks is one such widget-creation/ad network company making money with this approach. CEO and Chairman Matt Hulett says the company sees click-through rates of 0.5 percent to 1 percent with its ads, which resemble interactive, dynamic banner ads. The company expects to pull in $10 million in sales this year. The company’s approach, however, has come with its share of drama, as some publishers have complained about WidgetBucks’ rates and practices.

When it comes to making his widgets a success for advertisers, Hulett based his design on the theory that people using widgets for fun aren’t expecting to be engaged in commerce, but people in other venues (such as those reading a product blog, for example) might welcome widget advertising that shows the latest deals on a device.

“It’s kind of like pre-roll advertising,” Hulett said. “It’s really hard when the context is around having fun. People do not like monetization in front of those platforms and the CPMs are awful.”

A similar approach to using a widget as a more interactive ad rather than entertainment is Toyota’s new campaign for its Scion vehicles, which launched on Tuesday. This is an example of widgets as brand advertisement, which can be spread virally around the Internet. The idea is that consumers use the widgets on social media sites as an identification of their aspirations, much like one might wear a Nike shirt.

Adrian Si, an interactive marketing manager for Scion, says the firm is using widgets as an extension of the rich media banner ads it runs through Interpolls. Si is hoping to achieve the same 1 percent to 2 percent click-through rate Scion sees using Interpolls’ rich media banners. That translates to a 4 percent to 5 percent engagement rate. Scion will measure both click-throughs as well as the number of times the widget is installed on someone’s site.

“This could be more valuable [than banner ads],” says Si. “Obviously, it shows they have a lot of interest in the brand. On their MySpace pages they can put a whole bunch of stuff, so it must have meaning to them. It’s also an opportunity to get our brand in front of them every day.”

Listening to these two companies I realized that widgets aren’t a new business, but rather a new form of advertising and entertainment. Those focused on advertising are making money; the question is, will the ones focused on entertainment do so, too?

  1. There seem to be several different concepts being lumped into one, over-generalized “are widgets worthwhile” discussion here. There are widgets that are games (a medium that is always hard to monetize with advertising), widgets that are essentially rich, interactive product info providers (much like the various rich media micro-site style ads), and widgets that are some combo of the two, similar to “advergames” or branded entertainment. I think Toyota has their particular widget strategy right when they said “For our brand we’re not just after the youth demographic, but the trendsetting youth. We’re looking for them to spread the gospel about our brand,” Si said. “Part of our job is to investigate new ideas and non-traditional media, and pass those learning on to our sister companies.” They aren’t trying to use widgets to drive clicks and car purchases. They are using widgets to entertain and engage their target demographic, with the long term view that they may drive brand interest and affinity (and eventually auto purchases). As the Director of Advertising Strategy at WhitePages.com (what I like to call “the original social networking site”) I am personally a little tired of online ad industry pundits constantly grappling with new technologies as if they are, in and of themselves, new marketing strategies and tactics. Widgets aren’t a new marketing vehicle, they are a new technology that allows what was always a marketing vehicle (games, banner ads, etc.) to be a bit more portable and more closely associated with an individual’s personal tastes and personal online space (social network profiles, e.g.)

    Share
  2. Widgets are brand extensions and advertising rolled up into one. Content publishers who are using widgets to drive impressions are effectively monetizing by enhancing their site statistics. Impressions and clickthroughs in widgets count just like they do on your site.

    Furthermore, widgets that incorporate video, sponsored content, and traditional ad payloads are presenting multiple revenue opportunities in pre/post-roll on the video, widget sponsorship, and clickthrough ads. For example, a NASCAR widget sponsored by Home Depot with video from ESPN.

    The holy grail for widgets is high interaction rates and a social component that drives viral spread. This is effectively turning your audience into re-advertisers for you.

    Share
  3. [...] Companies can make money with Widget Ads [...]

    Share
  4. [...] Scribd takes on a much more user-friendly community approach to its use of S3. It markets itself as the ‘Youtube of documents’. Users can upload documents, with unlimited storage, and they share these documents. This free consumer community side will prove to be a very useful tool for education and I look forward to watching this grow. It’s had excellent press so far, and they’ve done the most sensible thing in creating a platform including API so that it can take on a much more commercial business market. I’ve already signed myself and a couple of friends up to the API, who each have very specialised knowledge in certain fields and have been looking for a straightforward way to publish their work while being able to monetise in a controlled fashion. Scribd will embed ads into your documents and then the ad revenue is split between them and you. Obviously with this business model, they can quickly jump to the absolute front of the race, provide a collection of widget options, and with this embedded ads system pioneer the use of widget ads. [...]

    Share
  5. [...] Companies Can Make Money With Widget Ads – Yes they can and it makes a heck of a lot of sense to be thinking about this from a content perspective [...]

    Share
  6. Widgetbucks is just like Adsense but pays even worse. I don’t think it’s much more useful than the “fun and games” widgets.

    Share
  7. [...] February 28, 2008 in Uncategorized Tags: facebook, myspace, rockyou, slide, widgets A couple of recent posts discuss the new world of Web widgets, which are small programs which can be installed on a web page, and run independent of that web page. Jeremiah Owyang writes about The Many Challenges of Widgets, while GigaOm believes that Companies Can Money with Widgets. [...]

    Share
  8. Hi Stacey,

    This is a great post and have kept it in my bookmarks. Will continue to read it as i’m very new to a lot of the points you mention!

    Thanks though, i’m glad some people share good stuff like this!

    Share
  9. Does anybody make real money from WidgetBucks these days? I thought they are kind of slowing down…

    Ajith

    Share

Comments have been disabled for this post