Attack of the Advertising Widgets
Widgets are being turned into advertising delivery systems. Their nature - rich media applicatons that are easy to build, customize and add to a site - also make them an attractive way to add advertising to small sites.
Context & Ripple Effects
The groundwork was laid two months earlier, when TechCrunch noted that the AddThis widget was gathering lots of interesting data as it spread across sites — evidence that embeddable widgets were already working as passive data-collection nodes well beyond their nominal function. This piece marks the logical next step: those same rich-media applications being repurposed as advertising delivery systems.
What makes the move notable is that the properties driving widget adoption — cheap to build, easy to customize, trivially added to any page — are exactly what small sites need in an ad format. Publishers too small to interest major display networks or without any direct advertiser relationships can simply paste a widget and carry someone else's ad.
First-order effects
- Small-site publishers get a plug-and-play ad unit they can deploy without joining an ad network or selling inventory themselves — the widget carries the advertising wherever it is embedded.
- Widget developers acquire a revenue model: the distribution footprint accumulated through free embedding becomes sellable ad inventory.
Second-order effects
- Platforms already harvesting usage data through widgets, like AddThis did per its March 2007 coverage, hold exactly the behavioral signals needed to target ads inside embeddable applications — turning widget analytics into a targeting asset.
- Display ad networks face new competition at the bottom of the market, where widget distributors can reach long-tail pages that traditional sales channels never touch.
Third-order effects
- If advertising rides inside widgets rather than on pages, inventory control shifts from the publisher to whoever operates the widget network — a fragmentation of the ad market from site-level placements to embedded-application level.
- Sustained, the pattern points toward widget distribution platforms consolidating into de facto ad networks for the long tail of the web, with measurement and targeting concentrated in a handful of intermediaries.
The trend: Embeddable web widgets are shifting from free viral-distribution tools into an advertising layer serving the long tail of sites too small for conventional display networks.