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.

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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.

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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If you’re not familiar with OpenSocial, it’s a protocol lead by Google to allow widgets and applications to be portable to any social network or website that part of the alliance. If you’re not familiar read “Explaining OpenSocial to your Executives” to get started, I explain it in pure business terms.

I’m conducting research right now for an upcoming report on OpenSocial, I’ve already interviewed David Glazer and Kevin Marks from Google, and have interviewed Joseph Smarr from Plaxo, Nick O’Neill from All Facebook, and will be talking to David Recordon from Six Apart next week.

I just asked my twitter network, (and received about 20 responses) about which white label social networks are open social compliant, and received quite a few responses. I frequently use social media tools for research ‘discovery’ to quickly find out a multitude of answers, but of course, it’s no substitute for analysis. I’d guess that I use social media tools for 10-20% of all my research, asking, reading, linking, or leaving comments.

The reason why I limit this list for 2008, as I’m pretty sure it will be most of the industry that adopts this standard

‘White Label’ (you can rebrand them) social networks that have adopted or agreed to offer the OpenSocial Protocol

KickApps (read more)
Ning (OpenSocial Directory)
Flux (read more)

So why is this significant?
Soon, corporate websites with social networks will start to host popular applications for other websites, this makes the web distributed. Soon, corporate websites will stop being irrelevant. Development time will be reduced, applications can quickly be rehashed and other opportunities that I’ve found will be in the report.

I expect this list to get quite a bit longer by the end of this year, if you know of others, please leave a comment.

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(I’ve shifted back to blogging, as some folks were overwhelmed with my tweet updates, this makes more sense rather than a blow-by-blow tweet report)

What is OpenSocial
First, if you don’t know what OpenSocial is read this: Explaining OpenSocial to your Executives. Forrester will be publishing a report on OpenSocial in the near future (I interviewed David and Kevin Marks last night), I’m on point for that, stay tuned.

“The cloud is about getting the computer out fo the way so that we can be more productive” -David Glazer, Google

Web Strategy Summary
You, a web decision maker are probally considering creating widgets to reach distributed communities. The opportunity to build an application once and let it run everywhere is still underway. I recommend you continue to watch this space, put a key developer or agnecy on point to start creating your applications in compliance, but plan on customizing your apps per the unique demographic for each social network.

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Raw notes from David’s presentation

David of Glazer of Google’s OpenSocial team shares at Graphing Social. He suggests that novice should read Nicholas Carr’s book “the Big Switch” on social computing, there are parallels between open grid electricity and open web.

Why OpenSocial?
It’s fast, easy, open, and everywhere. Move the accidental objects out of the way so we can interact better. People care about other people, not a new idea but the social context, people are the killer app.

This isn’t new
Email, Newspapers, Bookstores, FTP, social used to be called ‘c-o-l-l-a-b-o-r-a-t’

Some problems left to solve
-Fragmented authentication: OpenID is not yet sufficient but a step in the right direction
-Fragmented identity: how many times do we need to add friends?
-Fragmented app development: how many times do we have to build an app?

Step 1: OpenSocial
“If you can build a web app, you can make it social, and reach more than 200 million users”

1) Invent it: Come up with a great idea (app) that you want to do with your friends.

2) Build it: Standard web app (HTML and Javascript), New JS APIs (who i am, who i know

3) I missed the third one

Types of Social Networking
-Classic: Myspace, hi5, bebo, facebook
-Business networking: LinkedIn
-Enterprise Software: Salesforce, oracle:
-Communities (like white Label): Like corporate communities, nings, etc.

OpenSource
A great idea but you’ve got to work at it.
Need to get the following right: Clear mission, Open License, Engaged Community, Real-world use.

Other Resources
Google’s OpenSocial Site
Shindig Incubator

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Live notes as I sit in the front row at Graphing Social Platform.

Web Strategy Summary
MySpace continues to beckon to developers to build widgets and applications on their social networks. They are friendly to industry-wide specs such as OpenSocial and are putting efforts to protect privacy, and uphold security. Despite this welcoming to developers, constraints are set in place to protect the user experience as well as provide incentive for developers to create thriving applications. A balance will need to be found to appease MySpace, Users, Developers, and eventually new marketers. If you’re seeking more on widgets, please visit all posts tagged widgets.

Current Status
Current apps (as of today) are limited to 5 users, and is not full rolled out.

Revenue Opportunities
Developers will be able to create their own self revenue opportunities through canvas pages. The more money the developers can make on their own, or using MySpace’s Hypertargging ad network will be the monetization process.

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Raw Notes from Jim’s Presentation below

EcoSystem History

-My Space users have been using applications for years, such as YouTube, Photobucket, slide, and RockYou for over 3 years.
-This provides creative opportunities
-Encourages self-expression
-and offers customization
-Overall, beneficial to users, develops and the MySpace ecosystem as a whole

MySpace Developer Platform API

-1) OpenSocial API is the first AI, Javascript and Myspace Specific Extentions
-2) REST APIs (server to server) and Oauth authentication (open standard for data portability)
-3) Action Script APIs: Flash support (although silverlight can access it’s REST APIs, they haven’t decided if they want to create a sliverlight app)

OpenSocial

-Why open social?
-Commitment to Open Standards
-Good for the internet as a whole (users to platforms)
-Portability: developers can spend time building apps, rather than rebuidling every social network
-Leverages other existing web technologies, no need to learn proprietary development languages.
-Also by keeping platforms open give opportunity for a larger eco-system from Users, Developers and Platforms

-Working closely with Google to drive the spec, and are currently supporting Version .6 and will move to .7 soon
-Myspace Specific extensions includes: Bulletins, And additional attributes for bands.

Platform Surfaces

-Profile Surface
-Canvas Surface
-User Homepage Surface: Powerful user specific surface, enables to show specific data to a user that might be relevant on a users profile
-For example: an eBay application that would track your individual bids, would be readily available on homepage.
-For example: or see ‘my’ twitter profiles of my updates, but on my profile page could be visible for everyone
-Summary: This creates a ‘homepage portal’ for users.

Security, Privacy, and Safety

-Have created internal filters and protections (they wont give details) to protect users
-Applications go through safety review process
-Apps will be governed by the same privacy controls that are in place for members
-Apps will never have access to information that cannot be found on any members profile page
-Have 100 employees reviewing code, images, and content being uploaded every day.

Balancing Virility and User Experience.

-Developers are incented to create applications to grow, but creating apps with little levels of utility may not be beneficial to long term eco-system
-Artificial spammy growth is not necessary.
-Initial apps will be able to innitiate the workflow for sending a message on a 1 to 1 basis.

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The four panelists did a great job yesterday handling my barrage of questions in the Widget Strategies and Social Platforms session, Hooman Radfar (Clearspring Technologies, Inc.), Walker Fenton (NewsGator), Pam Webber (Widgetbox), Ben Pashman (Gigya) discussed widgets strategies. I asked each of them to suggest an image or icon that best represents their company (an idea to make the panel more memorable from Pam) and they each suggested the following:

Clearspring was like a cable, as they were a connector

Newsgator was like a kitchen where you come and create

Widgetbox was like a DIY Pottery store where you come in and make your own product

Gigya was like a like a spine, as they were the backbone or infrastructure

While there are many challenges to widgets (and every industry) the panelists did a great job refuting them, demonstrating their expertise in the area, and suggesting how to work around any bumps that we may see. If you want to refute the challenges, I certainly encourage you to leave comments on that post or leave a link demonstrating how you can overcome those. It’s all part of a healthy dialog.

The challenge questions? on the difficulties of measurement, lack of brand control, the hurdles of distribution, and how to monetize the space. I also asked them to share how they help clients develop strategies, and to provide clarity around the most common misconceptions. Each of them shined in their own right.

To hear what the rest of the panel said, Alex Nesbit did a great job live blogging the session. Beth Kanter (who did a great job presenting with passion yesterday) shares her notes from the session. And Peter Kaminski, CTO of SocialText writes on his wiki the high level notes. It makes sense if everyone updated the wiki, rather than having several blog posts it could centralize and make the effort more collaborative and efficient.

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[It’s a perfect day here in San Diego at Graphing Social Patterns, we’re right on the waterfront, but us geeks, well we tweeted, blogged, and talked in a dark room]

Most of the presentations this morning have been very developer focused, I’m covering Graphing Social from the Web Strategists’ perspective: Web decision makers in corporate.

Rodney Rumford gave a Facebook Marketing 101 presentations and explains how businesses can use widgets to reach customers. Facebook gives you multiple ways to reach customers, and with them spending 20 minutes per day, the attention is there.

In the presentation from BJ Fogg who co-ran the Facebook class at Stanford, they developed applications, that they estimated totaled $500,000 in revenue from the students efforts in advertising. They give out a list of learnings on what made them successful, often it included being flexible, quickly iterating, not listening to individual opinions or getting approvals, just launching them, and experimentation. It was very clear to me that that behavior is the opposite of large brands, who want safety, low risk, and pre-written plans.

[Successful applications were experimental, embraced risk, and quickly iterated –everything big brands will struggle with]

Rodney gave the example of the where I’ve been map, and suggested that brand managers should consider sponsoring existing successful apps, rather than create their own. Rodney suggested that advertising rates were disappointing yet, suggested that interactive marketing and social ads gave more opportunity. First, define success, lay out metrics, use a multi-pronged approach (there are many different tools to use).

Rodney suggests that one of the key challenges is with the decision making process:

“Most of the people (at big corporations) who are making the decisions for Facebook are 45 or older, and are not immersed in Facebook”

For success, one should consider: 1) Outsourcing development to those that get it, such as an a successful widget development company, or 2) lean on someone in your own team who really understands this space. While strategy remains, social networking marketing requires a different mindset, approach, and use of tools.

Various pics from the event

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Before you invest time and money in a widget strategy, you better know the challenges. This applies to VCs, Web Strategists, Developers, and even Social network companies

An Objective View
In this blog, I strive to provide a balanced viewpoint of both the benefits and challenges of a web strategy, it’s easy for us to become over-hyped and then fall right into the pit of over exuberance. (See other posts tagged Challenge)

I’m moderating quite a few panels with widget developers (last week at Stanford, next week at Graphing Social, and in a few weeks at Ad:Tech) so I’ll be using many of these challenges to hold the vendors to their claims.

First, a few parameters:
Update: This list of challenges mainly applies to widgets within Social Networks, although many of the challenges afflict mobile, desktop and blog widgets.

Widgets are ‘mini-applications’ that can be embedded on other containers (such as social networks like Facebook, MySpace, Bebo, LinkedIn, and whoever decides to join the movement) The thing is, desktop widgets have been around for some time, so this really isn’t anything new, but for the purpose of this post, I’m just going to keep those on social networks in scope.

In regards to terminology, I’m just going to use widgets as a blanket term to also include “applications” and “canvas pages” terms that developers user on Facebook’s F8 platform. I’ll clarify that on another post in the future.

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The Many Challenges of Widgets:
Each of the following hurdles can be overcome, but first, let’s identify them.

Difficult to Monetize
First and foremost, this has been the biggest challenge. For some widget developers, the money has come from investors or VCs on Sand Hill road. Secondly, I’m hearing that the CPI plague (see below) is becoming more common, and then lastly, advertising is not an effective way to monetize in social networks (read this for more).

Immature Market
Widget developers are mostly experimental, they are throwing gangly Spaghetti, Pasta, Rigatoni, and Jeremici (I just made that up) against the wall to see what will stick. In most cases, most of the half cooked pasta falls down from low users adoption, leaving a sticky residue of messy profile pages.

Overcrowding profile page
Have you seen my profile page on Facebook? It’s a mess, and with so much noise, who can compete? With there being thousands of widgets, only a few can survive on my profile page (I know there is tabbed segmentation) but really, how many do we need?

Low Barriers to Entry
A challenge for every web market, is that there are few ways to differentiate, and it’s easy for a young Russian developer or a Stanford student, or a team of Chinese engineers to quickly get in the game.

Metrics and Analytics Inconsistencies
Hardly anyone is measuring the success of their widgets in the same way, do we measure on install, activity, views, traffic, or clicks? As a result, other than Appsaholic, there’s very few industry ways to measure success.

Spammy
Sadly, I learned from a panel I managed that some of the most successful apps were the one that leaned on the social graph, no not the one that we all dream about, but in the context of email spam. Many containers are clamping down on this, as it’s best to preserve the user experience, but this could continue to be an issue.

Bastardization: Cost per Installation (CPI)
To me, this looks like one of the worst in our industry, to me, this is like ‘printing money’. Did you know some of the top developer companies sell to other developers the chance to let new widgets piggy back off successful ones by promoting them. The developer can then charge for cost per install.

Disposable and low value
Rodney Rumford first mentioned this term to me, he was describing that many widgets are simply not used more than once. These glamor widgets provide one time entertainment, or are used once and never reused –except for removing from ones profile page.

Recycled clones offer little uniqueness
Perhaps the worst plague is the “attack of the clones” in many cases, the code from widgets are created by one developer, stolen (I mean crowdsourced or collaborated) slightly modified or rebranded and then republished.

Low Utility
I’m trying to think of a widget that provides business utility, or one that improves my life other than casual communications or entertainment. Reminiscent of the web in the mid 90s, we’ve yet to see the business value.

Hard to build successfully
Specialized skill set are common among the developers, most traditional interactive firms, and most companies don’t have the skills or experience to create a widget. It’s a different game with a different mindset, the same strategies often don’t apply.

Multiple APIs strain developers
Most platforms or containers are offering their own API, although most are touting they are OpenSocial compliant (as I write this, OpenSocial is not public, it is but in beta but should be soon) yet we’ve got to wonder is it too late for there to be a common industry API if it’s already fragmented? I spoke to the Evangelist of MindKey last night and he suggested that each platform has unique APIs (like news feed APIs) that the other doesn’t share –it’s already fragmented.

Ever changing platform APIs requires attentive team
When I hosted the widget roundtable, it became very clear that the APIs on platforms are quickly changing, and sometimes without notice. For the agile developer company, they’ll be able to quickly morph with their full time resources, but for the Interactive Firm or corporate web team, they’ll likely be too slow.

Pricing may vary, lack of standards
I have the privilege of being one of the few people in the world that gets to talk to the widget developers and find out what they are charging. In many cases they don’t know what to charge (as they have strong technical skills, but are just ramping up on the business side, and they are undercharging) This will clean up this year, and we’ll start to see some benchmarks.

Poor User Experience
Dennis McDonald (via comments) suggests that the usability for widgets is often poor. With there being little standardization on the inteaction design, I’ll agree, he states: “It’s hard enough to keep track of multiple incoming data streams representing different people, sources, relationships, keywords, etc. When you try to cram too much though a widget you have a real usability problem because of the variety.”

Performance Issues
Pravda (via comments) suggests that some widgets have poor performance, and thereby causes a disrupted experience. Since widgets are hosted on third party servers, some laggards can hinder the rest of the social network experience, he states: “This is because they require additional HTTP request, and in some cases, this request delays the rest of the page. This is the reason that I am not using Meebo widget in my blog”

Lack of Brand Control
Len Kendall (via comments) suggests that some brands may be concerned where their sponsored widget may appear. In many traditional advertising deals, Coke will never want it’s advertisement near Pepsi, but with widgets, that’s unavoidable.

Add your own in comments
What other challenges of widgets did I miss? Please leave a comment and credit and link to you.

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Caveat: While I’m highlighting the challenges, it doesn’t mean they can’t be overcome, and it most cases, the value is higher than the challenge. I’m just suggesting, we shouldn’t only look at the beautiful side, but set yourself up for success by knowing what you’re in store for.

I could write a solution or a fix for all of these challenges, but that’s a post for another time, or one I’d be happy to answer for clients.

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Click To Play

In my role, I get briefed by companies that I cover in my space (social networks, widgets, and related products). If I feel the speaker is strong, and can deliver a succinct message that’s helpful to my audience, I’ll do a video. Ro Choy of RockYou (warning: auto playing music) clearly meets these requirements.

If you’re not familiar, RockYou is one of the leaders in what I call the widget network category. They create hundreds of widgets that were initially launched on blogs, then moved to Facebook, and will now be deployed on other social networks that allow development (Bebo, MySpace, etc). Between RockYou and their competitor Slide, they account for 8/10 top applications on Facebook (as I learned from Ren last night)

In this video, you’ll learn about his methodology (which I even discussed last night at the panel as a best practice). He discusses how web strategists should approach widget creation.

How the Web Strategist should approach Widgets

Level 1: Branding: Applications, like Microsites
Level 2: Interaction: Include the brand as part of the experience
Level 3: Custom: Build your own application
Pitfalls to watch out for

They’ve an office location that I’m familiar with, in downtown San Mateo across from central park where I used to play as a very young web strategist. (map)

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(Left: I met and interviewed MySpace’s team Will and Jim)

I just got back from the brand spanking new SF MySpace office, an event tonight that was catered to the new developer platform which they announced today. This post isn’t aimed at developers, but at the Web Strategist (web decision maker) here’s what you need to know:

MySpace opens third party developer platform
MySpace announced a developer platform so third party developers can create applications on top of their existing commmunity. This is released on time, and is a competitive move to Facebook’s application platform. I’ve published stats and demographics about MySpace (and Facebook here). Over the next 30 days, developers will get to play in the ‘Sandbox’ (the theme for tonight’s party).

Here’s what to expect:
After watching this space, talking to MySpace techical staff, and talking to many developers at the event, here’s my predictions and insights.

1) MySpace builds strategic relationship with widget developer community
MySpace’s new SF office is a great foothold into Silicon Valley, in particular, to the widget developer community. Most of the widget network developers are located in this area, and by buidling relationships with them, there’s an opportunity they’ll launch their widgets on their container, fueling the next generation of MySpace. The schwag (pics below) really catered to the developer: a backpack full of shirts, flip video player, and a few toys for the beach. (for the sandbox)

2) Unlike Facebook, Developer and MySpace will partner and monetize
Unlike Facebook, it’s expected that developers will have direct access to monetize utilizing MySpace’s advertising tools. Although it wasn’t formally announced, expect hyper targeting, and other monetization opportunities to be available to developers.

3) MySpace respects Privacy
MySpace, a later adopter to this movement, let Facebook make it’s mistakes (newspage and Beacon) and will not suffer from the same issues. Expect Myspace to play it safe, and play it right, leaning on the mistakes from Facebook.

4) While not fully developed, expect platform to slowly evolve
It was very clear (I talked to many developers in the room) and they were all waiting to see what the platform was like, as very little was released, miany documentation. I asked during the Q&A session when all the APIs will be available, and they said “tonight…(looking over at colleagues) right?” Laughter from crowd erupted. There will be three APIs released each with different abilities. Also, applications can display in 5 different locations within MySpace, including a private area for the user to see the application without anyone else seeing it.

5) Widgets on MySpace react different than other Social Networks
Even if widgets can be easily ported over from Facebook to Myspace don’t expect them to work the same. Demographics (who they are), Psyhographics (their emotional drivers), and Technographics (how they use technology) will all be different. Expect very few of the successful applications in Facebook to perform the same way in MySpace.

6) MySpace, Facebook, and Bebo coexist
I can’t tell you how many times I’m asked “is Facebook a Myspace killer?” the answer is no, they are different tools from different audiences. They will coexist.

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What it means:

Predictions
Expect a lot of trial and error development to occur, this is really and experimentation stage for the next 3 months. The platform will ilkely have a lot of tweaking and expect a lot of experimentation from the developer community. In the long run, MySpace will be able to successfully monetize, developers will profit, and brands will start to get involved. Hopefully, the user experience will respect the wishes of the users, and it will be a win for all.

Recommendations to the Web Strategist
Unless you’re already a successful widget developer you should not engage, instead you should Wait and Watch, and see what applications work, and what won’t. Then, consider contacting those developer networks to rebrand successful applications, or go a step further and create interactive of social campaigns partnering with them, and lastly, developing your own widget.

Update: Thanks Steve Ames for the assistance, he spotted a few errors in text, more from Justin Smith.

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A Widget Case Study
Yesterday, I gave a teleconference on Facebook as a ready-made marketing program. I gave a few examples of success, and the audience was hungry for success metrics and numbers. One of the case examples was about rebranding an application/widget in this case, Rock You’s vampire application.

Sony rebrands popular Vampires Widget with 30 Days Night, upcoming Vampire movie
Vampires, which you may already know as the RPG where members bite each other to receive points (and duel) was already popular with over 3 million installs in Facebook.

Sony pictures, the parent company of the very scary 30 Days Night vampire horror film rebranded the existing application, and launched a sweepstakes contest to generate registrations and glean intelligence. The grand prizes? 4 wheel ATVs and $1500.

Specifically, they placed banner ads on the rebranded vampire applications which promoted the movie (one could assume that those who opt-in for the vampires application would also like a vampire movie) promoting the sweekstakes.

The measurable results?
The campaign was only live for 3 weeks, and there were 59,100 sweepstakes entries. (success was deemed at 10k, this clearly moved beyond that)
The visits (I don’t know if they were unique or repeated) were 11,642,051 for the bite page, and 17,652,567 for the stats page (I believe these are part of the interactive experience of the game.
Sony was happy, it exceeded expectations, and users of the application weren’t over branded.

RockYou asked me to keep the price confidential, but based upon the results they told me, I suggested they double the rates, this is despite what Mashable reports on.

What worked?

Fishing where the fish are: Sony figured out where the already existing community was (remember to fish where the fish are) and rather than trying to rebuild something completely by scratch, they leveraged an existing successful application.

Rely on specialists for new arenas: In my many briefings with vendors and clients, specialized firms often provide something a general interactive firm or corporate web marketing team can’t. They have experience, know their area, and in this case, they knew to rely on someone that already knew Facebook.

Compliment the existing user experience: Sony didn’t beat the 3 million existing users with heavy advertising (and I’m sure RockYou wouldn’t have let them) over the head, instead offered value by giving away prizes, and tied in a movie that already existed.

What could have been better?
In my opinion, it would be great if:

The campaign lasted longer than 3 weeks.

Rather than simply embedded, Sony could sponsor elements from the movie and integrate within the game. (vampires could fight at different scenes from the movie, key characters from the movie could become non-player characters, etc). They already have a multi-player game that could have tied in.

A spin off game could have emerged just around the game, where members could give virtual gifts to each relating to the movie, then cross-selling other sony products and merchandise.

Also realize there are very few applications in Facebook that are this popular, don’t expect these type of results to occur every time.

Widget Network Developers
Looking bigger, RockYou isn’t the only vendor doing this type of work, also see Slide, Clearspring, Gigya, and a bunch of others. If you’re in the space, feel free to leave a comment below adding to the conversation.

For those Forrester clients who attended the webinar, I hope that clears up the question (as I promised to find the answer), and thanks to Ro Choy and team of Rock You for the details. If you need to know more, read this weekly digest of the social network industry, or see all posts tagged Facebook.

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Why Web Strategists should consider widgets
Expect widgets to act like a network, the span over many different containers like social networks, websites, and blogs. Since widgets are opt-in by the publisher or social network member, it’s a great way to track who’s actually interested in the content. As a result, the opportunity for more sophisticated marketing and advertising moves from carpet bombing to opt-in nearly GPS radar-like accuracy.

First, understand the distributed web strategy
Need to get up to speed on this, start with my primer on web marketing is distributed, not on two domains alone, followed up by a former CMOs perspective on the distributed web. Getting users to come to your corporate website is not the only goal, savvy fisherman fish where the fish are.

New players as widget networks emerge
I’m closely watching the widget industry with colleague Charlene Li. This time last year, there were no widgets in Facebook, and now there are over 13,000. I recognize that this is a growth market Widget ad revenue was estimated at about $20 million in 2007, or about one-thousandth of Internet advertising as a whole. According to the new comScore data for November, Slide claimed almost 144 million unique viewers, for a 16% market share, and RockYou claimed a 11.7% share, with 104 million individual viewers. In July, Slide had 130 million individual users, or a 15% share, while RockYou boasted 96 million users, or 11.1% of the total. (stats via MSNBC)

Spending low, but expect growth
According to the data (from Comscore) that 6% of internet advertising dollars were being spent on social networks, and only a fraction currently is spent on widgets. Expect that to grow in both camps. Widget networks aren’t limited to social networks alone, in many cases, they can be repurposed for mobile devices as well as standalone embeds on websites and blogs.

Measurement key as dollars shift
The article states that some of the growth is capped due to lack of measurement (a good reason why I created this list of widget measurement companies). You’ll need to measure to show success, as well as make in-flight course corrections in near real time.

Expectations in 2008
So, expect widget networks like Slide, Rockyou, Widgetbox, Watercooler, and many many others, to become like syndicated networks, offer self-serve advertising, begin to offer metrics, and offer unique co-branded, and co-sponsored marketing campaigns to brands. Two of these networks will likely be acquired by large media or internet companies in the next 11 months.

Case Study: Forbes Widgets
Here’s a case of a company letting go to the distributed web, I just ran into the Forbes site, and saw they had a full page devoted to widgets, that let it’s content, and brand spread of it’s site. Interesting that it’s sponsor, in this case Visa, goes with it.

What you should do
First, determine if your community and marketplace is using widgets, do research. If so, seek one of those widget networks, and trail an advertising campaign that will match to your right community. Don’t try to recreate a widget, leave it to the experts, and likely, your interactive firm won’t do it well, these are very specialized products. Rather than have the widget network vendor recreate a new widget, leverage an existing one by sponsorship, rebranding, or integrating with a unique marketing campaign.

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I’m watching more closely the movement within the widget industry, it’s growing quickly, and we expect 2008 to have some serious growth from this market. Expect widget advertising networks to appear this year, and as a result, the need to measure and watch this distributed industry is important. Here’s a list of companies that measure widget network growth.

How is widget measurement different than traditional web analytics? Widgets spread (velocity = distance/time) over networks, and are distributed. Users will embed them, interact with them and share with them with others. Also, you can identify unique nodes where applications have spread, these are influencer nodes, and should be treated with extra care. When deploying your widget, since it’s managed by a host, demand that you’ve access to metrics so you can see how it performs, and more importantly, who it works well with.

List of companies that provide widget measurement or metrics

Appsaholic from Social Media
“SocialMedia developed Appsaholic, an analytics suite that allows you to track the success of your application and see how it compares to others”

Clearspring
“Clearspring is the leading provider of cross-platform widget services. Our goal is to make it easy to use content and services from across the Internet to weave personalized experiences. With our flagship service, digital content and service providers can easily package, distribute, and analyze the performance of widgets via a single platform. Clearspring is a privately funded company based in McLean, Virginia.”

Gigya
“Gigya serves the world’s largest brands with a full-service widget advertising model covering design, development, hosting, distribution, viral promotion and tracking.”

Widgetbox’s Syndication Metrics
“Widgetbox’s Widget Syndication Metrics is an analytics dashboard for widget developers. It is free and comes with every widget on Widgetbox.”

Mixercast
“A Multimedia Player With A Revenue Model ”

MuseStorm
“MuseStorm’s breakthrough analytics give publishers and marketers previously unattainable precise distribution and audience interaction metrics, including impressions, video playback, rollovers, and clickthroughs. With this intelligence, companies can optimize their content and delivery in real time to maximize the engagement of their audience.”

If you want to learn more about widget strategy, this podcast with Clearspring is very helpful.

Know of others? Please leave a comment.

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Dave McClure (who helps teach the Stanford Facebook class, and runs the Graphing Social Patterns conference), Justin Smith (of Inside Facebook), Rodney Rumford (of FaceReviews), and myself brainstormed last night trying to understand the current state and direction of the emerging widget industry.

The widget universe is vast with a lot of variation. So although the initial goals was to try to categorize the widgets into clean buckets, and we found that to be an impossible task. Widgets can often have multiple attributes, so instead we focused on attributes and characteristics, rather than groupings. We developed a couple of models, (none that are perfected) but noticed a few ways to look at the attributes:

Levels of Data Interaction
Highest | Application uses data from your social network | iLike
High | Application uses data from your preferences | Pandora
Low | Application pulls data from source | Audio stream (like a radio station)
None | Static widget, display badge | Widget links to other website

We also explored a model of self-expression/vanity/entertainment vs utility and communication. And also found that some apps have different lifecycles from simple one time users (disposable widgets) or to those that got more value over time as network usage increased.

Later, Ro Choy from RockYou came by and presented me with a very clear definition of the differences between widgets and applications. Essentially (and I have a video of him to come) widgets are limited in functionality (due to limitations in size), usually resulting in the widget creator trying to get the user to go another website, vs an application that has full functionality, is on multiple pages, and therefore the widget creator doesn’t need to lead the user off the application.

So in summary, this was one of the first cracks at trying to segment the landscape, we’ll have to have subsequent meetings to drill down even farther. I’ll be mulling this whole thing over for the next few days/weeks to try to make sense of all the learnings. It’s a much larger universe (over 13,000 widgets exist, which will likely double this year) developing a taxonomy will be challenging and fun.

I was planning to live stream the event, but had issues with my wireless, although Rodney was taping and I’m sure he’ll post it. Chances are, you’ll find it very boring and dry, as we weren’t playing to the camera, we just had it on from the other side of the room as we discussed.

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[Viral Marketing doesn’t work, tell everyone you know]

Left: Dave McClure is being Ironic. According to Flickr, this is my MOST popular photograph, even more popular than my photo that got on digg and received 200,000 views.

Problems
Currently, there are over 13,000 widgets on Facebook, and we should expect that number to increase exponentially as companies like MySpace, Bebo, Friendster, LinkedIn, and all other networks become containers for widgets to grow on top of them.

Goals
Help users, marketers, developers, and the industry better understand the widget industry. Help define where widgets are heading, what are trends, and what to plan for next.

What we’re going to do
Sadly, there’s no way to accurately describe widgets, measure them consistently, or categorize them. As a result, tonight, I’ll be hosting Dave McClure (who helps teach the Stanford Facebook class, and runs the Graphing Social Patterns conference), Justin Smith (of Inside Facebook), Rodney Rumford (of FaceReviews), and colleague Charlene Li over to Forrester in Foster City (picture of building) to have a discussion about the widget industry. We’re going to do a landscape segmentation of this growing industry, map it out, so we can better understand the market, and thereby help support/analyze it.

Success for this widget industry mapping exercise looks like:

Be completely self-containable with no overlap with each other

Succinct and descriptive

Every widget will cleanly fall into one of those (or more than)

The labels will stand the test of time

Be vendor agnostic, and think of the bigger industry

I’ve been very transparent in my research process (while still maintaining value for my clients), I’ve recorded a few videos of folks I’ve interviewed for upcoming reports, and plan to live stream this discussion (providing it works, technically), and Rodney is going to film it and publish it. Watch my tweets around 4pm PST today for details.

In the future, I’ll be hosting other events for this social networking and social media industry, but my only requirement is that actual work get done and actual deliverables are created for my clients and the marketplace. It’s easy to be all talk, but let’s focus on deliverables.

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I met up with CEO Jennifer Cooper of Mixercast (Widget mashup platform) last week in San Mateo (where several new startups are starting to call home, one was YouTube). We chatted over wine about the different phases of the web, and she broke it down to three succinct levels. We both agreed that the future of web strategy is distributed, and brands will need to create small applications that can travel the web to wherever communities form. Keep in mind that widgets are only one component of your web marketing strategy, the full list is here.

[As we evolve to each new phase on the web, one group gains prominance while the other becomes irrelevant, which side are you on?]

In each of the phases one group becomes irrelevant, the first phase, ‘Analog content’, the second phase, newspapers and mainstream media who didn’t adopt, and finally, the portals and aggregators and curators become irrelevant.

Like a smart fisherman (or fisherwoman) you should ‘fish where the fish are’, rather than constantly baiting your customers to return to your static website. Communities have formed elsewhere on the web where trusted decisions are being made by affinities and groups.

As a result, widgets are the new cell: it will travel, spread, and grow on different sites, and be a way for brands to ‘let go’ and let them proliferate.

Related Resources

Video of Marcia Kadanoff “The Future of the Web is Distributed” (2:42)

The Beginnings of a Distributed Web Strategy

The Four Pillars of a Distributed Web Strategy

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As I travel around, I do quick interviews with interesting folks, some of them are speakers, thought leaders, or people I interview for my reports. Marcia immediately impressed me as she was asking very key questions during my keynote, and we furthered the conversation over lunch.

Marcia Kadanoff, who I met at the Web Community Forum up in Seattle, gives her insight on the future of the web. Search will be the common interface, yet the future is distributed, and people will be communicating in many different locations. She suggests that we stop focus on interruption marketing, focus on engagement marketing, and look at widgets.

So what do you think? Is her predictions for 2008 right? I’m in complete agreement, the distributed web is a concept I’ve been discussing for some time.

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Rodney Rumford, of FaceReviews, one of the speakers at the Web Community Forum shared his expertise with Widgets, which are mini-applications that can be deployed on top of existing communities –like Facebook.

Rodney shares some of the pitfalls to watch out for, as well as gives some specific actionable steps to overcome these issues. Measurement is key in adjusting a product in mid-flight.

According to Rodney, two attributes that make a successful widget are engagement and viral growth. Instead of the term engagement, I prefer attributes like attention or interaction or both.

It was great to catch a beautiful view of Seattle, rare this time of year due to the rain.

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(Video: Mario Sundar, LinkedIn’s community evangelist interviews Adam Nash, Sr. Director of Product, via official blog)

LinkedIn recently briefed us for their announcement today, (I’m making a few updates as news releases) here’s my take:

Summary: What you need to know
Already a business networking utility with minor community features, LinkedIn launches improved homepage with aggregated news and customized features. In addition, LinkedIn’s launching an API (so third party developers can create applications) starting with BusinessWeek’s “social bookmarks” feature. Expect more business valued applications to surface, increasing the value of LinkedIn, I see this as a success as this becomes less of a part-time utility to more of a full-time business platform.

Features Launched
There are three major homepage feature improvements include

1. Company News: Five related articles will be displayed
2. Customizable modules: Three options to choose from People, Jobs, and Answers
3. Network Updates: A newsfeed that shares your contacts changes

API yields platform for 3rd party development
The most important story (for some reason the other press members aren’t focusing in on it as much is that combining this with LinkedIn’s API so select third party developers can build business apps for the LinkedIn network can yield a business destination that we can start using on a daily basis.

But there’s an opportunity for LinkedIn to become a perma-tab in our web experience, take for example the partnership with Businessweek, much like a nod to the social ads that Facebook has deployed (but this time opt-in only) users of LinkedIn that are visiting Businessweek can choose to share a story with their network on LinkedIn. A sort of ‘delicious for your network’. LinkedIn is discussing the API opportunities from their official blog (and video)

Utility to Platform
LinkedIn already boasts some community features, such as LinkedIn answers, network like sharing tools, all lead by the official LinkedIn blog. I expect to see calendar, event, collaboration, knowledge sharing, and profile matching type of widgets and applications on LinkedIn’s community platform.

Application that could be developed

Shared bookmarks with my business network (Delicious integration)

Additional business media ties (Reuters, BBC, NYT, Forbes, Nasdaq, NYSE)

Shared calender and event tracker with my business network (Upcoming.org integration)

Collaboration of office docs (Open Office, Google docs integration)

Presentation sharing (slideshare integration)

Map mashups: find people with similiar jobs in your area

Social recommendation engines for jobs (SimplyHired integration)

SecondLife profile and community sharing, esp for business events (take it to the next level, the sky is the limit!)

Challenges
No platform or product is perfect, here’s a few challenges I see along the way

The API will take some time for developers to get used to.

The sub set of Businessweek readers and LinkedIn users that will share the bookmark is low, expect adoption for this feature to be low, but a good start for what’s to come.

With Google’s Open Social API underway (as well as Facebook) developers are going to have to build multiple APIs, in the long run this will cause confusion.

Many users get news information about their company and industry from other sources, I don’t expect the LinkedIn homepage to be a daily visit –expect the applications to be the lead in first for real utility.

Innovation not fully unleasged as only select partners are allowed to develop on LinkedIn’s platform, an ‘open market’ type of development process could bring many iterations of products, let the users decide which apps should be used.

Facebook: While business folks are connecting within Facebook, (such as within my web strategy group of 4000 professionals) there’s been no notable business apps that have been deployed. Expect developers for LinkedIn to also deploy on Facebook and other OpenSocial partners. Facebook is a “lifestyle” network, that includes both personal and work –much like our next generation of workers.

My Take
A business platform for business people. More applications of actual utility (unlike the entertainment and media apps in Facebook and MySpace). Actual productivity from a connected workforce. Increase in attention (time on site) and viral spread of new users that will join. Anyone trying to reach business people should consider deploying in LinkedIn’s community and platform. If things go according to plan, this is a win for LinkedIn.

(Similar to the video above, this one focuses on the APIs with Mario and Lucian Beebe Director of Product Management)

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Before you click play: Do you know what Widgets, Applications, and Canvas Pages are? Can you articulate the differences? Leave a comment below and tell me if you passed this self-quiz.

Thinking of deploying a widget in Facebook or other online community? Rodney Rumford shares with us the difference between Widgets, applications, and canvas pages. I was glad to meet Rodney yesterday at Seattle’s Web Community forum.

I also asked Rodney, what should marketers do before deploying widgets, he shares his strategic viewpoint that aligns very well with the POST methodology.

Find out how widgets can be used for interactive social games –engaging communities.

Tags: wcf07

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Above: For those using a feedreader or email subscription, See video interview with Shankar Iyer, VP of Strategic Initiatives at WebEx

The trend for companies to use Gadgets and Widgets is not uncommon, Google and CapGemini are in partnership to reach the enterprise market as CapGemini has links to Microsoft’s Vista’s product.

I had morning coffee with Shankar Iyer, Vice President, Strategic Initiatives of WebEx, they use PodTech (where I’m employed for another week) for Audio and Video podcasting solutions. A few years ago, Webex purchased intranets.com an internal collaboration tool they’ve started to fold into their platform. A few years ago, they released a secure IM tool, which a scaled down version has been used by AOl’s AIM product.

Most recently, WebEx has been putting resources into it’s WebEx Connect platform, which Shankar described as a “Business mashup collaboration platform”. Think widgets on top of a communication platform for extranet and intranet. There’s two major elements of this platform, one is a server side platform and the second is a client based widget platform. Inside of the client platform is a web based and desktop based program, each will quickly integrate widgets from third parties.

A practical use case of their platform could be for internal sales teams to collaborate build documents, proposals and plans, they could then work with prospects, sharing data, bringing the process to the close, then pass on to delivery and fulfillment teams. The toolset could comprise of video, IM, synchronous tools like persistent chat, document sharing, and even the dreaded email. Existing CRMs could create widgets that could deploy, making the process seamless. I’m somehow reminded of the portal movement in the late 90s which I was deploying at Exodus.

I asked Shankar a few other questions, and found out that this is part of the overall corporate strategy of WebEx, and also their recently new parent company, Cisco. In the future they will align with Cisco’s “Unified Communications” strategy, and integrate other products. I asked about Five Across, Tribes, and other acquistions, but he didn’t give me any hard answers. The Widget framework should be able to support widgets from other platforms, like NetVibes, Google Desktop and Google Widgets, Facebook and Microsoft Gadgets. “Do you have Live Video?” Shankar responded that they have partners like Veodia who are building a widget.

Web Strategy Recommendations
For companies wanting to reach the enterprise web space, I highly recommend you take a closer look at the WebEx Connect platform, they may already have the install base, corporate footprint in SMB, and may offer yet another distribution platform for your web service.

On a personal note, anything we can do to make meetings less painful or time consuming, let’s do it.

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