The Real Value of Widgets

The hype that currently surrounds the widget industry is not completely surprising when you consider how some widgets have seen extraordinary viral adoption. The problem with this though is that many of the most popular widgets are gimmicky hit based experiences that people grow tired of quickly. It seems apparent that those who have fueled the insane valuations have seemingly ignored this obvious risk (read Fortune’s and the NY Times’ take). Real value comes from widgets that are fun, entertaining, viral but at their core provide a utility that fosters longevity. This type of utility based widget in our view forms the basis of a new rich media programmable ad unit and a more meaningful proposition for advertisers.

1) “Hit Based Gimmicky Widgets” (Super Poke, etc.)
- Low utility/value and short longevity; characterized by gimmicks and games
- General appeal, currently over-hyped
- Viral, low quality users that are fickle and not loyal—constantly chasing the next fad
- Attempted behavioral targeting here will deliver spotty results at best

Companies like Slide are now attempting to add ad networks to monetize the massive user base they’ve created. The assumption is that their widget network will be valuable to advertisers because of the behavioral information they’re able to garner. This represents a new twist on an old behavioral approach utilized by Tacoda, Revenue Science and others. I’m dubious that this will be as effective as the existing approaches and even the existing approaches require more development to realize the promise they initially presented. The other issue with the approach is it only speaks to call to action and does nothing for brand advertisers.

Vs..

2) “Utilitarian Widget” as an extension of a more robust Social Media experience that delivers quality profile data to be used to deliver relevance for both call to action and brand advertising
- High utility/value with longevity and user loyalty; niche and focused appeal
- Characterized by relevant, useful and compelling content, media and activity, (and yes, still fun)
- Viral with a high quality, loyal audience—loyalty based on utility and relevance
- Business model based on a programmed, viral ad unit and an individualized brand engagement

In this scenario, the widget is a viral ad unit. Online advertising changes dramatically and becomes a tremendous vehicle for brand marketing. Unlike the banner ad, the “WidgeAD(TM)” (as we call it) is defined by its programmability. It has utility in a person’s life by providing compelling, useful and relevant content—this takes the form of content (videos, photos, text, music, etc.) and/or interactive components (fun games, communication, commerce, etc.).This is where the game changes for Madison Ave and publishers – brand messaging takes a completely different form, moving away from poor quality banner ad messaging and the hit-and-miss approach of tracking, to actual brand engagement. The end result is a loyal audience that views the widget and its application as adding value to their lives (usually based on an interest and/or utility that they care about). This engagement then gives brands and publishers the opportunity to establish highly individualized relationships with their audiences.