'Widgetising the web: Evaluating the widget ecosystem' provides an analysis of the social apps that are transforming content access across social media platforms. The report captures the rise of social apps; an overview of key players; how social apps are being monetised and varying business; the challenges that widget players face in entering the market and securing revenues; drivers of growth in the sector, and what we can expect for widget players in the future. The research is derived from deal analysis of transactional information processed by StrategyEye's proprietary TMT business intelligence platform, third-party research papers and interviews with companies in the sector.

Executive summary:

• Widgets are playing a crucial role in the development of the social media market. It's a disruptive technology that is changing user behaviour, content distribution and the direction of revenues. This is evident from the exponential growth in user adoption rates, a domino effect among platforms rolling out APIs (application programmer interface), the achievements of user-distributed content and mounting investment into key players.
• Widgets are key supporters of the online advertising business model. Widgets provide content portals, social media platforms and advertisers with a huge commercial opportunity. Widgets are being recognised for their potential as drivers of web traffic, as a method of cross-platform content distribution and as an additional off-portal online revenue source. However, currently the foundations of widget players' business models remain fragile.
• Key early entrant developers have come to dominate the social network app market and are diversifying into third-party ad networks. Developer-led ad networks are coming up against independent widget-focused ad networks (which are beginning to gain ground) and it is debatable which group will profit in the long term. While the developer-led ad networks currently benefit from their position in the market, the increasing transparency that comes with market growth suggests that they may not survive as the widget leaders of tomorrow.
• The widget economy, while vast and growing at a phenomenal rate, is still nascent. Despite some widget players experiencing early successes, the majority are still experimenting with business models and face significant challenges in stabilising their revenue streams, securing advertisers and e-commerce partners, and negotiating favourable revenue-sharing agreements. The huge disparity that currently exists in the market, in terms of app performance indicators, is likely to give way as the market matures and standardisation emerges from experimentalism for both developers and ad networks.
• Despite facing challenges, a widgetised web is fundamentally in demand by online users and widgets are here to stay. Key to driving growth in the widget economy is the evolution in content access in online and mobile arenas which is spurred by user adoption, the movement to open platforms and the growth of widgetised mobile content. Furthermore, in order to secure revenue streams, widget players need to gain the confidence of advertisers who still have misgivings about social media advertising. More commercially driven app development, honing advertising solutions and standardising widget evaluation are necessary to realise opportunities in the long term.

Table of contents

1. Key messages

2. Setting the scene: the emergence of social apps

• The ascendency of social apps
• Why are social apps a disruptive technology?

3. Widget players

4. Business models: monetising social apps / Widgets

5. Challenges for widget players

• Business model
• Advertisers and e-commerce partners
• Low barriers to entry

6. Key drivers of growth in the widget market

• Facilitating output and scaling user adopting across platform and devices
• Gaining the confidence of advertisers

7. Future outlook for widget players

Appendix 1: Notable VC and M&A activity in the widget sector

Appendix 2: Difference between active and total user rates for Slide's Apps

Appendix 3: Strategic positioning of key developers and ad networks

Table of figures

• Figure 2: Investment trends in widget companies
• Figure 3: Overview of a range of widget developers
• Figure 4: Widget players in the advertising value chain and advertising revenue share models

Back to reports