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The next phase of widgets: content syndication

Posted by Mort Greenberg on March 26, 2008


Ad-supported content syndication is the latest game-changing application for widgets, packing these little tools with punch.

There have been a lot of stories in the news lately about the economic struggles of the newspaper and magazine industries and how they are trying to adapt their businesses to compete online. In fact, four large newspaper companies — Tribune, Gannett, Hearst and New York Times Company — recently formed a joint venture called quadrantONE to encourage large advertisers to spend more ad dollars on their internet properties.

Syndicating their content through ad-supported widgets is a viable solution for publishers looking for innovative digital advertising strategies to grow their businesses.

Why widgets
Marketers traditionally have used widgets as business-to-consumer applications; however, publishers can also benefit from widgets’ distribution capabilities by using them to syndicate their content for consumption on other websites and better market their brands.

Widgets — small pieces of code that reside on a website — have become all the rage since Facebook opened up to third-party applications. According to eMarketer, since opening its platform to third-party developers in May 2007, Facebook has seen nearly 15,000 different widgets downloaded close to 765 million times on its site. The code brings in dynamically updated content — text, images, interactive games, video and advertising — from a third party, without the site owners having to update it.

One of the reasons widgets have grown so fast in popularity is that web audiences have become more fragmented — consumers are spending more time on niche websites rather than portals — and marketers realize the need to distribute their content more broadly. Current research from JP Morgan shows that consumers are only spending 29 percent of their online time on portals, down from 42 percent in August 2002.

Widgets could transform traditional online advertising
eMarketer estimates that U.S. companies will spend $40 million in 2008 to create, promote and distribute widgets, up from $15 million in 2007. Despite the expected industry growth, there are legitimate questions that remain about the future development of the widget advertising market. There are currently no standards for widget advertising, and the industry is still trying to figure out the best ways to track ad performance and ROI. However, the potential benefits in the publishing world are very appealing.

Advertisers constantly are looking for the most effective way of engaging targeted audiences with their brands’ messages, while publishers are looking for a fresh way to monetize their content and market their brands. By pairing advertising with high quality syndicated content in a widget application, advertisers are able to reach an audience that is very relevant and involved with contextual content.

Widgets may transform publishing, too
Publishers of all stripes can benefit from a widget strategy. Publishers looking to acquire content to expand their offering and increase page views have been faced with an outdated model for licensing and syndicating content that is no longer viable. High costs and legacy technology are prohibitive, and publishers are required to negotiate individual licensing agreements with a variety of content providers.

In addition, the traditional media model for content creators who attempt to build relevant audience on their sites to drive advertising revenue is eroding. By using widgets as a distribution channel for ad-supported syndication, publishers can efficiently send their content to where relevant audiences are spending their time — both through a viral widget or one that sits on a different website — in a way that’s packaged and reinforces their brand.

The website republishing the content distributed by the widget will benefit from the additional page views that result, creating more ad inventory, and providing greater depth and value for its readers. For the original content provider, syndication provides enhanced brand extension across the web, enabling it to reach and engage untapped audiences and increased monetization for its existing content through greater ad revenue. So for the advertiser, content provider and publisher, ad-supported widgets are a three-way win.

How it can work
While some traditional publishers may have a fear of letting their content get released beyond the confines of their website due to loss of traffic or control of their CPM, others realize the changing world of publishing dynamics that the web and particularly widgets have established. Those innovative publishers and advertisers will embrace the marketing and revenue potential that syndication and “widgetizing of content” allows.

By utilizing widgets as a marketing and distribution channel in a syndicated publishing environment, advertisers are aligning their brand with contextual editorial, resulting in higher consumer engagement with a brand’s message. Pharmaceutical companies, for example, can advertise within a widget that is focused on condition-related content, which is distributed across the internet to niche healthcare sites and major media companies looking to supplement their existing healthcare coverage.

Widget advertising remains an emerging concept within the publishing world and provides brands with several formats with which to deliver their messages. Advertisers can sponsor entire topical widgets focused on healthcare or entertainment news where the ad is served adjacent to the content. In an ad-network model, advertisers can purchase dedicated positions within the widget or allow their ads to rotate across widgets within the network. Widgets offer advertisers a unique channel to buy media that efficiently leverages trusted editorial context, quality audiences and network distribution.

Everyone benefits
As publishers continue to find new ways to innovate, new channels of opportunity have emerged for advertisers. Widgets first began as little icons that sat in your taskbar and gave you the weather forecast. Today, they are a much more powerful application and a critical tool for advertisers looking to deliver their message to a relevant audience in a saturated online environment.

Carolyn Bekkedahl is chief development officer of Mochila, Inc. and founding member of the Internet Content Syndication Council. Read full bio.


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