Practice Lead, Social MediaIPG Emerging Media Lab

Executive Summary

Web widgets are small modules o content that users can addor install to any Web page including social network prolesand blogs. Brands use widgets to extend their brands beyondtheir Websites, and to engage their customers in conversation.Sixty-ve percent o Internet users have interacted with awidget, and U.S. companies will spend $40 million in 2008 tocreate and distribute online widgets.But are widgets the uture o advertising,or just an Internet ad?

Widgets Are theNew Ad Units

2 | Widgets: The New Ad Units

Why Care About the Widget?

Empowering consumers has become an important theme on theInternet. The power o the online ad market has shited rom the sellerto the buyer—who has more choices than ever beore. Widgets giveconsumers ultimate control o what they see and interact with becausethey are sel-selected. comScore reports a total o 604 million people,or 65% o global Internet users, viewed or engaged with a widget inMarch 2008. Widgets have multiplied as users o social networkingsites and personalized portals have increased. According to theInteractive Advertising Bureau (IAB), UGC sites are projected to attract101 million users in the U.S. and earn $4.3 billion in ad revenue by2011; Advertisers are working to leverage this tremendous reach. AWeb page today can consist o content rom multiple widgets. (YouTubepopularized the rst major use o widget technology—all o the site’sembeddable videos are actually widgets). Ad serving companies andad networks are adding the ability to support ads which consumers cantake with them, making advertising a portable widget.“A consumer who downloads a widget is a hand-raiser andthus extremely valuable to marketers. But the viral part o theequation is a huge challenge.”—Debra Aho Williamson, eMarketer

Watz a Widget?

Web widgets are small modules o content that users can add or install to any Webpage including social network proles and blogs. Applications are widgets designedor a specic platorm, such as Facebook. Web widgets oten use DHTML, JavaScript,or Flash. Widgets give Internet users a new way to experience the Web, and to interactwith content. Brands use widgets to extend their brands beyond their Websites, and toengage their customers in conversation. Widgets also live on computer desktops andmobile phones, but the ocus o this paper is on Web widgets.“These mini-applications—also called“gadgets”—are simple bits o code,easily dragged onto a desktop or pastedinto a personal page, where they areconstantly updated with whateverinormation you want.”—By Brian Braiker,Newsweek/MSNBC

Aiding content syndication

Consumers are likely to be ound in niche Web destinations, makingit more important to reach consumers where they “hang out”—ratherthan orcing them to click through to a site. Widgets move brandsbeyond the single Website model and turn the entire Web into a content-distribution system, allowing companies to distribute their content tomultiple locations.

Potential viral advertising

An attractive eature o the widget is their ability to spread virally. Viral-widget distribution turns customers into brand advertisers. Accordingto JupiterResearch, users between 18 and 24 were six times more likelyto get their widgets rom riends than rom a company. Widgets spreadrapidly because they can be easily shared and installed on a page;when someone adds an application to their prole on Facebook, theyare asked to share the application with their riends and a noticationo the install appears in their riends’ News Feed. But going viral is arrom a guarantee—there is vigorous competition or attention. A recentAdonomics report cites that o 13,000 Facebook apps in January 08,only 52 had more than 100,000 active users, and just 141 reached onemillion installations. It’s important to keep in mind the possiblity thatyour widget may go nowhere. It shouldn’t be the sole campaign ocusand should be included in a wider Internet program.

Microsot launched the OfcePoke! application allowing users to interact with their colleagues. User can throw a stapler, report to HR, swap chairs, etc. In just a ew months, 250K users have sent over 2 million pokes generating tens o millions o branded impressions.

3 | Widgets: The New Ad UnitsBrand an existing widget or application:There are opportunities or brands to sponsor orintegrate within popular existing applications.

Custom designed greeting cards or the movie “Step Brother” were integrated on Rock You’s SuperWall, resulting in 8M impressions on application pages and 6M cards sent.

Buy ad space within a popular widget or application.

Forbes.com advertised right inside the CNN widget.

“Ad widgets” are simply widgets that are built tothe standards o online advertisements, and canbe deployed through an advertising network ordistribution and advertising placement. The ad unit isthe application, and the media is in the unit.

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“App”-vertising

Widgets and apps allow brands to communicate directly withconsumers and engage users in the social Web. Successul applicationshave shown to create more engagement with the brand. However, socialnetworks are dicult marketing environments: Traditional banners,buttons, and interstitials haven’t worked well in social spaces. On theother hand, widgets are being turned into advertising delivery systems.

Here’s how:

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 rom $3K–10Ka month, or as long as the application is live.“Advertisers and consumers have played a game o cat andmouse or years. As we’ve learned rom the ongoing upheavalin the entertainment industry, online advertisers have toadapt their approach to match consumer behavior, or riskirrelevance. They need to move beyond gloried billboards anddeliver useul, engaging applications people will want to useand share.”—Peter Yared, Business Week