10 Reasons Why Walled Garden Ad Spending Represents 80% of Budgets

Nearly four out of five U.S. digital advertising dollars are spent with walled garden publishers such as Google, Meta, Amazon, and Apple.

To better understand how marketers consider and use walled garden advertising now and in the future, Skai surveyed 117 U.S. marketing professionals. Questions included current and future spending trends, perceived strengths and weaknesses, and considerations for strategic decision-making.

Learn what we found in our survey within this new report that helps you maximize your walled garden advertising investments.

Over the past few years, big changes to data privacy, including the declining use of cookies, have meant many advertisers are rethinking their digital strategy and changing focus from open web to walled garden ad spending. 

A “walled garden” refers to giant publishers that control all activity within a few closed ecosystems. Some of the biggest walled gardens in the advertising industry include Google and Meta (which contains both Facebook and Instagram). And while some advertisers used to be a bit wary of those walled gardens, especially the lack of access to the data within them, recent studies show a shift in attitude. 

According to data from eMarketer, in 2008, more than half (52%) of U.S. digital advertising was already being spent with walled garden publishers. However, the past few years have seen the number of players in the walled garden market narrow and the amount of ad spend within those gardens increase significantly. 

In fact, Skai’s recent survey of 117 U.S. marketing professionals on current/future spending trends found that a very small group of publishers will account for 81% of total walled garden ad spending. Furthermore, only 12% of marketers from our survey said they would be spending less next year on walled gardens.

Here are 10 reasons why so many marketers are moving their budgets to walled garden ad spending:

Massive Audiences: To reach just a small fraction of Facebook’s 1.69 billion daily users, advertisers would have to place ads across thousands of open web publishers. Other major players in the walled garden ad space also offer advertisers access to equally impressive audience sizes. 

Powerful First-Party Data: In addition to those massive audiences, walled garden ad spending also buys greater access to brands’ own customers. Over the last two decades, walled garden publishers have built native tools for marketers to upload first-party data and use it to better target and personalize advertising in order to reach existing customers and lookalike audiences. 

Engaged Users: As users browse social media or search Amazon, they’re constantly leaving clues about what types of ads might interest them, clues that advertisers can use in combination with their own first-party data to create personalized ad experiences. Walled garden publishers offer rich audience segments which marketers can use for free when targeting ads.  

Better Measurement: One of the major challenges of digital advertising has long been understanding the buyer journey across devices. The cross-device measurement offered by walled garden publishers offers a precious view of ways that advertisers can optimize paid and unpaid content across devices for a more holistic strategy. 

Seamless Ad Formats: Walled garden ads are inherently better suited to performance because of how well they work within each publisher’s unique environment. 

Ease of Use: Walled garden ad spending levels the playing field when it comes to ad content and design. Any marketer, from the largest corporations to the smallest mom-and-pop shops, can create an account and publish ads within minutes.

Robust Vendor Ecosystems: Not only do walled garden publishers invest heavily in their native ad platforms to help marketers spend efficiently, but they’ve also invested in rich partner programs to encourage vendor ecosystems to flourish. 

Cost Effectiveness: While Google didn’t invent the pay-per-click (PPC) model, the company certainly made the model the industry standard. With walled garden ad spending, advertisers know upfront that they will only pay for results, not just ad impressions, unlike the way that other online and offline advertising is sold. 

Simple Optimization: Walled garden publishers have invested heavily in algorithms that leverage rich datasets—which could never be shared with marketers due to privacy constraints—to detect unseen correlations between audience characteristics and clicks/conversions to help them find the needle in the haystack, e.g., the brand/ad with the highest forecasted response rate. These algorithms mean that advertisers can be sure that their audience gets the right ad at the right time since it’s not in publishers’ best interest to serve irrelevant, off-putting ads. 

Cookieless Advertising: As consumers grow increasingly resistant to traditional targeting methods, such as cookies, governments have stepped in to enforce privacy measures. Walled gardens provide built-in, cookieless solutions which are inherently future-proofed. 

As walled garden ad spending continues to increase, it is more important to optimize these platforms than ever before. To find out more about why so many marketers are investing in walled garden advertising, read our full report. 

Skai’s omnichannel marketing platform maximizes your budget on walled garden advertising

Skai is the only omnichannel marketing platform for performance advertising. We’re helping marketers connect the walled gardens across retail media, paid search, paid social, and app marketing, making true omnichannel performance marketing a reality. We’ll keep you at the forefront of the digital evolution with data and insights, marketing execution, and measurement tools that work together to drive powerful brand growth.

Please schedule a quick demo for more information on Skai’s or to see our platform in action.

Even if you’re not ready just yet, staying on top of what’s available is always a good idea. We look forward to working with you!

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