Many Forms of Widget Monetization

Categories: Web Advertising, Web Marketing, Widget StrategyPosted on April 4th, 2008

Although there are many forms of Web Monetization (I’ve listed out nearly 15 forms), the newest iteration of web marketing: widgets, haven’t yet fully cashed in.

Widget, Gadgets, Applications, Canvas Pages, Embeds, it goes on and one. One thing is clear, the rate of widgets continues to increase, take for example Facebook’s application platform has over ~~15,000~~, 20,000 applications in just about 9 months. Granted, many of those are slightly tweaked clones of each other, the top 100 widgets clearly has adoption.

In some cases, there are sophisticated companies developing widgets, the RockYou’s and Slides of the world can really zero in and focus, or take the garage developers such as the two Russian developers who created Scrabulouos, or lastly, the big corporations or interactive firms that are getting in on the action –often with limited success.

Yet, how do we monetize widgets? There’s only a few ways, some tied back to traditional methods, and some leaning on the new media.

Many Forms of Monetizing Widgets

Advertising/Sponsorship: CPM models sit nicely here, yet research indicates that users don’t go to social networks for finding products, CTRs are pretty damn low. Why? because people go there to socialize and self-exprsess, not find products, (that’s what Google, eBay, Craigslist is for). Banner ads count too, such as this case study with Vampires and Sony.

Interactive Marketing: Some widget developers are selling their already existing application space to large brands, who can insert this branded engagement into an existing community. Take for example Dell’s regeneration campaign case study.

Branded Entertainment: Somewhat different than advertising and interactive marketing, popular media or widgets can be put forth from funding from large companies, while we’ve yet to see this occur, Intel comes to mind: they sponsored a feature on Digg, and paid for the development, all in the context of their brand.

Cost Per Install: I personally think this is a dangerous way to monetize, although I realize the top widget networks are getting sizable revenues from selling the opportunity for other applications to piggy back off their success, and sell installations. If everyone does this, we’re going to end up with an excess of applications installed, based upon lower value. I somehow imagine successful widgets should grow naturally and organically, not sold from a mercenary application.

Acquisition: No brainer here, but folks like Scrabulous (if they weren’t shut down) could sell of their application to an interactive firm or widget network and all the community members that come with them.

eCommerce: Surprisingly, we’ve not seen any great applications spur forth with adoption in social networks, it just isn’t happening yet, expect to see an existing eCommerce site to create a successful widget by end of year, and likely a new form of social shopping to appear. Update: Rodney is watching this new type of ‘classified’ widget Radical Buy make some traction.

Lead Generation
Techcrunch profiles how some application developers such as OfferPal are able to view ads, collect user information and send them to marketers for lead generation. Specific numbers have yet to be published in public.

Now if I’ve missed any forms of widget monetization, do leave a comment. Also, see the Many Forms of Web Marketing for 2008.

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This entry was posted on Friday, April 4th, 2008 at 12:23 pm and is filed under Web Advertising, Web Marketing, Widget Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

There is an affiliate / partner / influencer layer missing at the content level, I would add. As analytic tools become more sophisticated, widgets can carry logic that say, pulls in content from the top bloggers for a particular topic, the greatest conversationalists. It’s one example.

Posted by Lisa Padilla on April 4th, 2008 at 12:31 pm

A lot of this is applicable to tunnel vision widgets. By “tunnel vision” I mean widgets that are designed for only their specific function.
For example a slideshow widget which only displays the pictures selected from the site. The widget only function is to display your creation. Now if we expand the widget to become not only a viewer of content but also creator of content you widen the capability. To go back to the slideshow example a person sees a slideshow on myspace and clicks on it and has an option to sign up from within the widget and create their own slideshow and embed it on their own blog.

This sort of functionality could open to allowing for a complete social network to be placed in a small real estate portal widget. You could monetize such portal widgets by treating them like full fledged applications. Allow users to pay for features. Pay for access. Pay for embed-ability.

Goofy ideas from a goofy kid. Hope you’re well Jeremiah!

Posted by Mo Kakwan on April 4th, 2008 at 12:41 pm

Jeremiah,
Great article. You have missed some forms of monetization that are being used.

1. Lead Generation: people fill out forms = money
2. Incentives inside of apps/widgets to download something (ie. toolbar) $1-2 bucks per download
3. Virtual goods: animated gifts, animated greeting cards, avatars, custom videos, etc. $1-5
4. Payment to skip levels and attain status or leveling in social games/apps/widgets.

I suspect that many more ways to monetize or show expanded ROI will emerge once brands become more aware of how they can engage and determine the value of a new customer/user.

When facebook launches it’s fully integrated payment plan I would suspect that commerce will rise as people will no longer have to worry about trust of financial purchase transactions. much in the same way that people all think paypal is safe. Facebook facilitating seamless secure transactions will increase the value of apps. and open a whole new way to monetize.

Users will soon be able to purchase & download music, movies, videos, PDF, etc.

Cheers!

Rodney Rumford
http://www.twitter.com/rumford

Posted by Rodney Rumford on April 4th, 2008 at 12:43 pm

@Rodney very nice adds.

I play Triumph (facebook game) by Zynga. Users are forced to buy power package or invite their friend to use Triumph or other games by Zynga on daily basis, just to earn more (virtual) Triumph Money.

Posted by pico seno on April 4th, 2008 at 1:08 pm

Pico,
Yup. Zynga makes some nice money with people buying power up packages. I did a video interview with their CEO Mark Pincus here where we touch on that.

http://facereviews.com/2008/03/11/zynga-interview-with-ceo/

Posted by Rodney Rumford on April 4th, 2008 at 1:44 pm

I was wondering in the Advertising/Sponsorship section if you were referring to branded widgets and what legal implications would there be with those on sites like Myspace, Facebook, etc.?

Posted by BJ on April 4th, 2008 at 3:19 pm

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Posted by Brush up your thinking : Movie Marketing Madness on April 6th, 2008 at 7:27 pm

Very good post. I would however argue that “acquisition” is not a form of monetization, since the acquirer still has to monetize the widgets in one of the other ways you mentioned.

BTW isn’t Scrabulous still around? And aren’t the developers two Indian brothers (not Russian - see http://www.scrabulous.com/about_scrabulous.php) ?

Posted by rs550 on April 7th, 2008 at 8:32 am

rs550

We agree, acquisition is an exit strategy for the founders, but not long term monetization.

Posted by jeremiah_owyang on April 7th, 2008 at 9:27 am

The PC centric view is difficult to monetise at the present time and there aren’t many good examples of it. Certainly widgets can kick-start traffic that lead to the buy process but buying or consuming spend within a widget is not overground as yet. Perhaps the broadband providers should get into this - I can imagine a British Telecom widget providing info and config across their product set being of use.

Widgets on handsets on the other hand are gaining increasing ground and the customer expectation is different from the web in that we are more disposed to pay for mobile services - even in a wireless world.

For widget developers that could mean free distribution with advertising models/share, standard consumption of the users data plan and a deal with Telcos on the traffic revenue OR premium service based models.

Personally I’d like to see services that deploy complementary widgets on different channels i.e. my mobile widget complements the PC and Nintendo widget - I would then be more disposed to paying for a rounded ’service’.

One of the +ve and -ve aspects of widgets is that they are simplistic and discrete.

Enjoy your hols Jeremiah!

Posted by Anthony Mullen on April 11th, 2008 at 4:57 am

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Posted by MKTG2032 Links Post 19: The Money Edition « Mktg2032’s Weblog on April 24th, 2008 at 4:36 pm

One key question that someone can further explain is the lifespan of Widgets. I am wondering if the lifespan of a typical widget is less than 6 months. I ask this because as new widgets come out, I would suspect that consumers will abandon their existing one for the next cool one.

I would be curious to find out if there are any stats on this?

Posted by Emilio on May 8th, 2008 at 11:56 am

There’s also selling enterprise widgets — widgets that add advanced functionality to somebody else’s existing enterprise application, rather than ones targeted at social networks.

I think it’s potentially a huge market, but considering I’m working for one of the few companies pursuing it right now, I guess I’m glad it’s off the mainstream radar…

Posted by casey on June 16th, 2008 at 6:44 pm

[...] Many Forms of Widget Monetization [...]

Posted by An Overview of Facebook’s F8 Developers Community on July 28th, 2008 at 4:01 am

Hi Jeremiah

We haven’t met [but we have quite a few mutual friends - both in US and Ireland]

Anyway- i’ve just done a post on the subject “Widgets and Sell-side advertising” - http://www.nooked.com/2008/9/5/widgets-and-sell-side-advertising

Appreciate your thoughts - and feedback - and hopefully we can connect sometime soon

Best Regards
Fergus
twitter.com/fergusb

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