Building a Brand with Widgets

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But there are even more examples of branded Facebook applications from household names such as Blockbuster, Hallmark, and Verizon (VZ) that have fallen flat. The market for ad-related widgets is still in its infancy, as evidenced by eMarketer projection that U.S. Web widget and application ad spending in 2008 will amount to $40 million, just 2.5% of the $1.6 billion in U.S. online social network ad spending. The verdict is out on whether widgets will become an integral part of social networking marketing and ad campaigns or whether they are, as some critics say, a passing fad.

The potential audience is vast. MySpace has some 110 million active users worldwide, and Facebook has a little more than 66 million. Yet of the nearly 17,000 applications on Facebook, only 138 had more than 1 million installations on Feb. 25, according to Adonomics, a firm that tracks Facebook statistics.

A Short Shelf Life for Many Widgets

To do well, branded widgets typically must engage users often, piggyback on existing popular applications, and be aimed at the right audience. "It's very challenging to maintain someone's interest over a long period of time," says Debra Aho Williamson, a senior analyst at eMarketer. "Applications and widgets have a pretty short shelf life."

In fact, the adoption rate of many applications on social networking sites looks something like a steep bell curve, typically with rapid adoption at the outset and a quick drop when the enthusiasm ebbs. Depending on the application, that lifespan can be days, weeks, or months. The applications with the longest life tend to be those where developers constantly add new features to get users to come back.

Another recipe for success is joining forces with an already popular application. Independent widget makers Slide and RockYou have mastered the art of building applications that hook users and get passed liberally from one person to the next. One of Slide's most popular Facebook applications is SuperPoke, a communication tool that lets people do everything from send virtual hugs to throw virtual objects at friends. At one point, Samsung Electronics (SSNGY) sponsored a tool that lets users throw a picture of an HDTV at pals.

Reaching Out to a Younger Audience

Many adults may not immediately see the appeal of throwing a sheep or an HDTV at a friend. Then again, they're probably not the target demographic. RockYou, for instance, designs applications that appeal to teen girls. "Our goal is maximum reach, and teen girls are the most viral people on the planet," RockYou's Tokuda says.

In creating applications for Facebook, TripAdvisor wanted to reach a younger audience than its traditional 35-44 demographic. It has tried a mix of buying advertising on other applications and creating its own. "You can spend a lot of money buying installs if your application is not viral," says Christine Petersen, the company's senior vice-president for marketing.

Petersen would rather create her own applications and hope for organic growth. In-house application building is less expensive. It's also a better way to build a brand, she says. The efforts don't always pan out, but the stakes are sufficiently low that it can afford some flops. TripAdvisor's Cities I've Visited, a map where people can show where they've traveled, has been very successful. At its peak, Cities I've Visited was installed by 7.8 million people. It took two people about three days to build that application. Another app, a quiz called What Obnoxious Traveler Are You?, launched on Jan. 29, fared considerably worse, and has garnered only 500 installations as of Feb. 26. "It's been a dud," says Petersen.