WidgetWebExpo — A Year Later

My over-arching reaction as I looked around one year later was “what a difference a year makes.” The conference a year ago was packed, and had a whole Gen-Y, very edgy feeling — held in an old movie theatre in SoHo; most of the attendees were very young, many dressed in shorts, t-shirts and baseball hats. There was a lot of energy, with a feeling that was closer to a frat party than a conference. On my panel, the speaker next to me proclaimed “the thing about widgets is…if you’re over 30, you just don’t get them.” Ahem. I am indeed well over 30. (Of course I took that to mean I must look very young :))

But to me, there were red flags. There was a lot of fun, cool applications, with no clear value proposition, and for most, no path to monetization. The general thinking was “get distribution, then we’ll worry about that.” I remember one talk where the CEO and founder of a company showed a very fun widget that allowed you to animate an image of yourself, and the audience loved it. Then, he asked the audience (rather somberly): “But who will pay me for this?” No one answered.

This was the state of the widget world at the time: lots of cool technology, and our numbers clearly showed that audiences were gobbling them up — not just in the US, but also abroad. People clearly liked the idea of distributed content — a little nugget they could grab and place in their space that delivered information, content, fun, or a combo of the three. However, with a few exceptions, that pesky little topic of how to actually make money in the space remained unanswered.

That is in stark contrast to this year’s conference. I recognized very few faces from last year. The attendees were fully clad in the usual business casual attire – but, not one baseball cap to be seen. The organizer/sponsor of last year’s conference is no longer in the widget business, and their executives have moved on to other companies. The community has also aged quite a bit — almost everyone in attendance was now over 30, many over 40. There were also many fewer attendees. Overall, the conference was ….. well, let’s just say there was nothing edgy about it.

Although they have changed the way many use the web, widgets clearly have not lived up to the hype they created a year ago. There are a lot of reasons why, including that pesky little problem of having to eventually make money, which has caused more than one of these companies to either fold or pivot and change direction. I learned that Facebook is moving all the widgets to a separate tab so that they don’t show up on the profile page. The term “de-widgetization’ was mentioned more than once. Even Fred Wilson, a big early supporter of widgets both as a user and an investor who spoke at the conference, discussed this in his blog, culminating in his proclamation that ‘widgets suck.’

And yet, VC money continues to flow into the space. According to an article in MarketWatch by Scott Austin, who is an assistant managing editor at VentureWire: “At least 12 start-ups that build or distribute widgets have raised $191 million so far this year, including RockYou, which earlier this week announced a $35 million round of funding.” Feels very circa 1999 to me.

Yet as I see it, something very important is being missed here, or at least not broadly understood. As marketers, it’s not often that we see an environment as we do with both search and distributed content, where we literally have people waving their arms, saying “Hey, over here! I’m interested in this subject/function/content/type of game, etc.” Talk about the opportunity to target!

It’s clear that widgets have demonstrated the potential to do three key things:

1. deliver a very coveted target to advertisers — people who skew younger (both male and female) as well as slightly older groups
2. reach an audience of global proportions, often in a very short timeframe
3. reach people at the time of engagement—capitalizing on the interest levels, emotional availability, etc.

Those are three very powerful characteristics. So my question is: why aren’t more of these widgets delivering advertising in some form?

Some of them are. I know that Slide, for example, includes advertising, although I have not seen it personally. A notable exception is Splashcast. They develop widgets for the likes of Nike that, based on IP address, will deliver localized widgets with in-language branding and content. That’s a great example, I think, of how to use this medium to reach and build a global audience that widgets can deliver. But I haven’t seen a lot of that.

Being with a measurement company, my bias is of course, that measurement could make an important contribution here. So here’s the project I’d love to do: an ad effectiveness study to quantify the difference in impact between ads delivered in widgets to those same ads delivered to that same target, using traditional placement strategies. For example, I’d like to compare the branding impact/clickthrough/engagement/conversion rates (pick any metric) for a photo-printing ad for Kodak, delivered via a photo-sharing widget as compared to that same ad delivered via a normal campaign. Would the effectiveness of the ads be greater when a young mom is looking at recent pictures of her kids than they would if she saw those ads on other sites while she was, for example, reading the news? What about Nike — will kids be more likely to click on the Nike ad and view the newest cool sneaks when they are engaging with the NCAA widget that delivers the most recent scores than they would on other sites?

I’m betting yes. And while it wouldn’t be a silver bullet for the widget industry, it would be a strong point of quantified value and differentiation that would allow widgets to plant their flag in the busy landscape of the media mix. Perhaps it would even bring back some of those young developers with big ideas in shorts and baseball caps. I miss them.