Web widgets tools startup Gigya launched its ad network on Monday.
Gigya, backed by Benchmark Capital and First Round Capital, provides tools for distributing and tracking widgets. The startup wants to help advertisers and widget publishers make money off the popularity of widgets, or web-based software applications.
“Because of the dynamic of what happens on social networks, user-endorsed advertising makes sense,” said Ben Pashman, Gigya vice president of sales and business development.
Gigya began testing its distribution model about 60 days ago and now counts Kimberly-Clark, Disney, and Zomba Label Group, a division of Sony BMG, among its advertisers. The publisher network includes application developers Blingee and ImageChef.
The Palo Alto, California, startup hopes its new ad network will help it rival competitors Google Gadget Ads and McLean, Virginia-based Clearspring Technologies’ ad widget offerings.
Advertisers see an opportunity on widgets. Why not given their enormous popularity that has supported the proliferation of some 13,000 across Facebook alone. Bebo, Friendster, and LinkedIn have also seen rising widget numbers since opening their platforms to third-party developers. Social-networking giant MySpace keeps a tighter leash on its widgets, but promises to open up with Google’s OpenSocial.
Analysts see 2008 as the year widgets make money. Last year was about “experimenting with widgets,” Forrester Research analyst Jeremiah Owyang said. “Now it’s about trying to figure out how to monetize them.”
Gigya wants get people’s attention while they are updating their social network profile. Its network offers advertisers the chance to serve up branded widgets while people wait for applications to install. It also offers advertisers tracking of widgets, such as the number of installations, impressions, and user engagement.
“When dollars are involved, you have to have a measurement,” Mr. Owyang said.
Advertisers are charged on a cost per install basis and Gigya shares the resulting revenue with its widget publishers. “We’re providing a traditional ad network model for widget publishers,” said Mr. Pashman.
Widget ads are a logical next step in the evolution of online advertising, according to analysts. “The market will weigh traditional banner ads and Google ads against this new form of advertising,” Mr. Owyang said. Because of the viral spread of widgets and their increasing ability to move between social networks, “some might have larger audiences than traditional web sites.”
Gigya hopes to differentiate itself from Clearspring’s widget ad network by serving up branded widgets rather than ads within widgets.