The Widget revolution
The question of how best to generate advertising on social networks is a tough one. Social networking presents a unique environment, where a user’s space is personal place and the intrusion of advertising is not welcome. Getting the balance right is the big question. Banner ads, pop-ups and sponsorship have traditionally been viewed as the way to connect to these audiences, but recent issues of privacy have once again brought into doubt the effectiveness of advertising on social networks. However, there is new kid in town which is set to revolution online advertising and benefit users, advertisers and publishers alike – the widget. Yann Motte, CEO and Co-founder of Webjam explains more.
So what is a widget? Widgets are mini applications that can be embedded into webpages, and provide a useful service to the user. From providing newsfeeds, to generating words of wisdom on Facebook pages, widgets have quietly worked their way into the culture of online social networking. Not only are they tolerated by users, but they actively seek them and most important of all - trust them. Advertisers are beginning to realise the huge opportunity this presents. By their nature widgets are viral, making them the ideal vehicle for online advertising and brand building. Their interactivity takes the static banner ad to a new level, giving brands an opportunity to interact with their audience within a comfortable and familiar environment.
We are already witnessing the commoditisation of widgets, driven through mass-market platforms like facebook or emerging standards like OpenSocial which allows applications to be interoperable with any social network. What makes widgets different is that the power stays with the consumers. Widgets were initially created by developers for fun, but more and more they are appearing on behalf of brands. How they get discovered is now linked to their reputation, whether quantitatively (most used widget) or qualitatively (best rated widget). Their popularity is not based on the brand but how many times they are sent virally to other users, in other words through word-of-mouth. Finally, consumer themselves, not even developers or web-savvy users, will be more and more able to take over widget creation from each other. There are already websites which offer replication features allowing users to copy and paste, then amend widgets, modules or even entire pages. This opens new ways for brands to let their potential audience digest and maybe repackage the message as they recommend it to their network of friends.
Banner Ad
Today, the widget economy is driven by the industry using widgets as a medium to support advertising, either by sponsoring them, or serving ads within their message. This is just the first step for the widget economy to take-off and test the effectiveness of viral marketing before consumers really understand the power they have in rating, recommending or even creating their own widgets, and developers realize that there might be a willingness to pay for some of their coolest applications.
Big players are testing various strategies, from controlling all ads within widgets like on MySpace - to letting developers try out different types of monetization such as Facebook, or simply giving tools to all players like Google did with the OpenSocial Standard. Under the cover of offering applications to the masses, Google is making a shrewd move : if widgets are the future of Ad format, influencing if not controlling their format is actually about building the next Ad delivery system. By building OpenSocial on top of Google gadget and offering to host applications, Google is simply letting developers upload their applications on a serving mechanism, like it does today with advertisers uploading Ads in Adwords. The same can be said about Facebooks apps: it is first and foremost a tool given to developers to reach an audience which brands will pay heavily to reach.
In the internet industry, where competition is fierce, we are already seeing the major players trying out various options to nurture and harness the power of the widget. As the industry manoeuvres itself, the good news is that for the first time it is consumers that will be benefit directly from the ads, sorry widgets, served to them. By either choosing them or receiving them from people they trust, consumers will get relevant advertising in exchange for useful applications. I predict the future of social networking will move away from having as many irrelevant friends as possible to a few networks of trusted contacts. This is when the true power of the widget will finally be realised, and the widget economy begins.
