Google Seeks to Monetize Widgets with Gadget Ads

A day after offering ads for mobile phones, Google continued the momentum with the introduction of Google Gadget Ads, an interactive ad format that includes rich media capabilities to allow users to engage with ad content in a way static ads can’t.

Currently in an expanded beta with select AdWords advertisers, including Paramount Vantage (check out this Gadget Ad for the movie “A Mighty Heart”), Intel, Honda and Six Flags, Gadget Ads uses real-time data feeds, images and video to update the ads and can be developed using Flash, HTML or both, according to a Google statement.

Google said the Gadget Ads will run on its content network, competing alongside text, image and video ads for placement, and will support cost-per-click and cost-per-impression pricing models.

Moreover, the company said users can build communities with Gadget Ads by sharing them with each other and placing them on nearly any Web page, including personalized iGoogle pages.

“Google Gadget Ads provided a unique and efficient means to further promote our Centrino Duo campaign,” said Stephanie Dillard, global marketing manager at Intel. “Our goal was to enhance visibility and engagement with the consumer while taking in key learnings of Google’s evolutionary advertising offerings. We look forward to utilizing the interactive gadget ad format with our new ‘Chips’ campaign that shifts focus back on the processor.”

In some ways, this is just as exciting as Google’s push into mobile ads. The idea that the company is using widgets, which are data files that can be embedded into a site’s HTML code and displayed in a viewing pane on the site, to drive ads could be extremely popular at a time when interactivity on the Web attracts multiple demographics.

Widgets have gotten big enough to where comScore has started tracking them this year. The research firm said that in April, 40.3 percent of North American Internet users visited a Web site with an embedded widget, followed by Western Europe with 24.3 percent and Latin America with 17.5 percent.

Gadget Ads makes Google a first mover in this arena. It will be interesting to see how Yahoo, Microsoft and AOL respond. All of them offer widgets in some capacity, but will they monetize them?