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Widgets, Banner Ads Are Out: E-Commerce, Branded Entertainment Are In

As start-ups come to grips with the reality that the usual online advertising tools of banner ads and widgets won’t keep the lights on even if the economy gets better, a few companies are significantly altering their business models. The WSJ profiles a few, like Slide, RockYou and Meez, which don’t want to be identified as widget companies anymore and are trying to reposition themselves as e-commerce plays.

Although eMarketer has said that spending on widgets and apps is expected to grow 75 percent this year over last, a projected ad market of $70 million is a pretty flimsy foundation on which to build a business. evidenced Veronis Suhler Stevenson, meanwhile, in its latest media report found that last year for the first time, consumers spent more time with paid media, like books or cable TV, than with ad-supported media, like newspapers and magazines.

The changing revenue landscape is pushing Slide from a widget and app marketing purveyor to a “branded entertainment” firm, while RockYou is moving into virtual goods, away from primarily being ad-supported. Some other media companies have ridden out the recession nicely thanks to e-commerce. Linden Lab, the maker of Second Life, has forecast that users will complete roughly $450 million dollars of virtual transactions in Second Life this year, up 28 percent from last year. Now, companies like Slide and RockYou are looking to e-commerce to help them as well. If they can pull off the transition, they have a much better chance of a creating stable companies than if they try to hang on to ad-support as their primary means of income.

2 Responses to “Widgets, Banner Ads Are Out: E-Commerce, Branded Entertainment Are In”

  1. James Wood

    I have focused on the Content Branded and Ad Funded media market, due to the growth, brand relationship building and audience reach and development aspect.

    The price per dollar/pound investment for online video is more cost effective than print, radio or broadcast channels.

    Yours,

    James Wood
    HD Productions
    Online web video production and marketing
    http://www.hd-productions.biz

  2. ed dunn

    I have outlined this trend at our web site preshow.fookyinc.com in a video series discussing marketing versus advertising.

    I believe more and more corporate firms who used to spend $100 million campaigns in mass media are finding value in branded iPhone apps, microsites and contextual marketing science – value and data they cannot get from mass media ad placement.