• by Jodi McDermott , January 11, 2008

This week Business Week ran an article called "What's a Widget Worth?" The article focused on the fact that social networks are exploding in growth, but that the software development community contributing to fuel this growth is not getting a piece of the revenue that their applications and widgets are helping to support. At the forefront of the article was the announcement that comScore is revamping its widget usage data report to offer more comprehensive coverage. They will begin to account for widgets built with JavaScript (in addition to Flash), which will open up the capability to measure widgets on one of the hottest social networks on the Web, Facebook.

 

ComScore's attention to tracking Web widgets is a big step towards the adoption of widget monetization. Advertisers relying on third-party audience measurement firms to validate audience and engagement have been waiting for the inclusion of widgets to provide justification to their social network marketing strategies. While some advertisers have already been testing the market with widget monetization, the validation of this market by a firm like comScore will help boost its growth and the maturation of the measurement tools and platforms needed to support these business models.

The advertising channels that have recently emerged to support the monetization of widgets boil down to two areas:

1. Widgets as ads - Content creators can ad-serve their widget where the entire widget is the ad. We've seen large media companies and movie studios ad-serve widgets to promote their offerings. Based on the ad buy, ad-served widgets can accelerate the spread of the widget from the ad position to a more permanent placement on the visitor's social network site, blog or start page. This permanence associated with a person or an organization builds brand affinity and extends the audience reach beyond the impression.

2. In-widget ad networks - Advertising within widgets where the ad is adjacent to the content is where in-widget networks fit in. Advertisers can purchase dedicated positions within the widget or allow their ads to rotate across widgets within the network. Current examples include: Fox TV's "Futurama" widget running an ad from Virgin Mobile and a celebrity gossip widget on X17online.com that includes an ad to promote TLC's Miss America reality show.

Both types of advertising have just emerged and are starting to gain ground as advertisers enter the world of social networking. Brands with large ad budgets utilize audience measurement tools to build their media plans -- publishers build their widget inventory and advertisers evaluate that inventory through these third-party reports.

But what does this mean for the developer community that is creating games and content widgets that are not associated with well-known brands? In-widget ad networks will allow independent developers to get in the game, too, by monetizing their widgets from advertisers who opt into in-widget ad networks. For example, a developer launching an application as a widget that gains critical mass across the Web could create an ad position into which other advertisers could buy. We've seen this with Google AdSense, where advertisers can opt into content networks and publishers can incorporate search listings into their site for a share of the revenue.

Just as Web analytics allows the deep dive of how specific online campaigns or Web sites are performing, widget analytics follows in lock step, but adds the next layer of analysis, showing how your content is spreading from site to site. ComScore started reporting on widgets last June in its first Widget Metrix Report. It is exciting to see its evolution of refining its data analysis methodology to account for the technology hurdles that challenge the measurement of distributed content. The combination of widget analytics for the practitioner and the strong entrance from syndicated research illustrates a maturation of the Web 2.0 space with respect to measurement and monetization.

How are you handling widget analytics and audience measurement? I would be very interested to read your comments on how your organization is managing measurement in the wild.