Myth #4: Widgets are social applications unto themselves
Ro Choy, vice president of business development at leading widget developer RockYou, says this is not so. Although widgets have grown increasingly sophisticated over the last several years, they are still fairly small components of larger pages -- not distinct microsites. Widgets must still compete with other widgets and other content on a page.

Choy says this distinction between widgets and social applications is key to advertisers because each tool -- an embeddable widget and a microsite -- offers its own value.

While a lot of advertisers may be uncomfortable with widgets because publishers can't promise control over what's happening in the next widget over, those same advertisers can comfortably monetize social applications (see Scrabulous on Facebook, for one popular example) that offer much more containable environments.

Choy points out that advertisers can use widgets to drive users to these social applications where they can employ all of the standard web business models, from advertising to subscriptions to the sale of virtual goods.

Myth #5: There's no room for ads on widgets
When web widgets made their debut, traditional advertisers still struggling to overcome their discomfort with newfangled web banner ads certainly weren't about to invest their web budgets on such uncharted territory. But, as Alterman points out, widgets are ads. At least, they can be. With the ability to insert dynamically changing feeds and run video within widgets, advertisers can take advantage of the medium to develop much more dynamic, richer campaigns. Alterman describes such tools as "widgeads." 

Myth #6: You can't make money on widgets
According to Choy, another key misconception of advertisers about widgets is that there's a dramatic difference between banner ad CPMs and widget CPMs. But Choy says CPMs on widgets are "the same, if not better," than those of banner ads.

That's because, unlike banner ads, which simply hover at fixed points on a page, widgets can be the source of interaction between millions of users. When consumers use widgets to exchange notes or send messages, the widget itself becomes a product or a conversation. And for the successful advertisers who can use widgets to build a user base and generate clickthroughs, "The value of that conversation is ridiculously high," Choy says.