I think it’s hard to find folks who will argue with the premise that advertisers are funding (or soon will be funding) the bulk of consumer software development on the planet. And when it comes to brand advertising, those sponsors are finding that the higher they go up the software evolutionary chain, the better results they’re getting.

Right now, the craze is widgets. Business Week had this to say:

“Interest in widgets is rising as marketers become disaffected by other methods of online advertising, especially on social networks.”

Here at JFM, we believe that as advertisers see the benefits of engaging an audience through widgets they will naturally move up to their older siblings – full-scale web applications (each with their own suite of widgets to reach out to other sites). This of course is where we’ve been focusing our time, building a portfolio (is two a portfolio? :) ) of brandable web applications that are ready for brand advertisers to integrate into their marketing campaigns.

More on this direction from the New York Times:

“…Behind the shift is a fundamental change in Nike’s view of the role of advertising. No longer are ads primarily meant to grab a person’s attention while they’re trying to do something else — like reading an article. Nike executives say that much of the company’s future advertising spending will take the form of services for consumers, like workout advice, online communities and local sports competitions.”

And even more from Umair Haque (who I find super insightful):

“See what Nike just realized? Like Google, the Nike guys have come to the conclusion that new sources of advantage must be built on finding ways to invest in consumers – on communications that benefit consumers, not impose costs on them. In turn, these new modes of communication will let Nike talk less – and listen more.”

I wish I had said it that well. But, luckily, Umair has done it for me.

We believe the advantages of sponsoring full blown web apps vs. widgets alone are as follows:

• Engagement — while often the widgets are nothing more than a distraction, even the best executed widgets can hold the user’s attention for only so long. The room that a full app gives you to engage the user can result in many more minutes or hours spent in the app, experiencing the brand messaging and values.
• Product placement — while product placement has its spot in the toolkit, it’s (in our opinion) often used in a heavy-handed fashion. Getting deep engagement with an audience where they start to use your branded app on their own without encouragement can relieve the pressure on advertisers to get their product into every pixel on the screen. In fact, with loyalty and commitment on the part of the user, the advertiser can take a back seat and just be “along for the ride” accruing value with the user as the app meets the user’s needs.
• Shelf-life — while the widgets are often tied to a campaign or a specific event, the deeper and larger web apps have the ability to last over multiple campaigns, reinforcing a consistent set of brand values.
• Widgets — there’s no reason the larger scale web apps can’t have their own fleet of widgets that help the app get traction on the various social network sites and blogs. At least with these widgets, there’s a broader experience the user can dive into if the concept is something that grabs them.

None of this is to say that widgets are a bad thing. They’re great! We just predict that brand advertisers will soon see just how cost-effective they can be and want to start sponsor even more comprehensive experiences – web apps. We’re working towards that day, and we think it’s now.

P.S. For anyone wanting our end-to-end analysis of how brand advertisers can use software as an incredible vehicle for their messages check out our whitepaper on the topic. (Written all the way back in April 2007 — my weren’t we forward thinking ;) .)