Widgets: From Hype to Hits

Widgets first appeared as mini-applications for computer desktops. The Web versions, which are derived from HTML, JavaScript, or Flash code, can be copied and placed onto Web pages, blogs, and social-networking profiles. Alternately called gadgets or "blog bling," they offer an easy method for producing viral content.

Facebook accelerated the widget craze by introducing its own platform for developers to create applications, modules similar to widgets except that they operate solely within the social network. As widgets have grown in popularity, galleries as well as development tools have emerged to aid in finding and creating them. Slide and RockYou are among the leading developers for widgets. Companies such as Widgetbox, Clearspring, Gigya, and Musestorm offer services for marketers and developers. Others, including Widgetbox and Google (NASDAQ:GOOG), host directories of widgets for site, blog, and profile owners.

Slide and RockYou quickly gained a large presence by developing multiple apps, many not related to their core multimedia slideshow-building services. Other companies' applications for Facebook, most notably those of Flixster and iLike (for film and music recommendations, respectively), helped their main sites skyrocket in membership and activity. Two weeks after its launch, iLike's Facebook application registered three million users, helping to spur average growth of 300,000 new users per day on iLike's central site.

If the quick growth of Web upstarts hasn't heralded the official arrival of the widget as a credible marketing strategy, the reaction of established corporations certainly has. Universal Studios stepped from viral trailers up to multimedia widget packages, including video, audio, biographies, and plot synopses, for films like American Gangster. Adidas, which had already featured viral video in its "Impossible is Nothing" campaign, launched a Flash-powered Website and widget soliciting testimonials from users to accompany those of athletes such as Reggie Bush.

Even more conservative companies have gotten in on widgets. "When we first started, it was the biggest risk-takers: movie studios, entertainment, apparel," says Chris Cunningham, VP of Advertising and Global Sales at Webs.com, a leading Web page hosting site that also develops widgets for clients. "With companies like Procter & Gamble (NYSE:PG) and Ford (NYSE:F), we thought, 'There's no way they'll do a widget.' But now they are, and Procter & Gamble and Ford are probably the most traditional companies out there."

Widgets are not only changing the way large corporations strategize their advertising campaigns, they're also changing the metrics guiding online advertisng revision of the metrics

Widgets, on the other hand, provide interactivity and viral branding impressions, whereas users may never visit the campaigns site. And it may not matter if they don't.

The still-developing metrics of widget marketing include views, placements (copies of the widget code onto a page), and distribution (by domain and geographical location), but the most significant of all may be engagement. Data such as the percentage of users who click on a particular feature within a widget or the average amount of time spent on a particular widget offer valuable insight into a widget's popularity.

Even if a user never visits the widget's sponsor site, he or she implicitly interacts with the brand by interacting with the widget. Users are also more likely to copy widgets with popular features onto their own pages, thereby becoming instant marketers for the widget's sponsor brand.

In addition to their long reach across the Internet, widgets and applications also hold potential for monetization opportunities. Widgetbox's devShare offers developers 50 percent of advertising revenue from their Facebook applications. Many widget companies, including Slide and RockYou, feature networks that enable widget publishers to place advertising within their widgets. In December, Clearspring announced its in-widget ad network, making it the first full-service widget management company to do so.