Traditionally, the idea of walled garden advertising has gotten a bad rap. The term “walled garden” dates back to the 1970s and was initially used to describe the ways in which certain industries controlled all aspects of their ecosystem. For example, at that time, Bell owned every facet of the telephone industry, right down to the telephones themselves, giving them total control.
The advertising industry co-opted the term: today, marketers use walled gardens to refer to giant publishers that control all activity within a few closed ecosystems, such as Google, Meta, Amazon, and Apple.
However, while it may, on the surface, seem as if the high “walls” around audiences on these platforms limit advertisers’ access to data, the truth is evolving into something more beneficial. In the era of data privacy — the walls of walled gardens actually create a safe area to offer targeted advertising without violating user privacy, according to Gartner’s recent report, “Brands Retreat Behind Walled Gardens as Data Privacy Efforts Take Root”:
“Ongoing data privacy disruptions and consumers’ accelerated adoption of digital channels are upending traditional ad placements. Digital marketing leaders should prepare by exploring how leading brands are adapting ad efforts within the walled gardens of YouTube, Amazon, and Facebook.”
Of course, the tradeoff for marketers is that these walls make it increasingly difficult to get data out of the walled gardens. But, given the choice between having hardly any data at all and having solid and reliable data, the decision is clear: walled garden publishers offer a unique opportunity in the era of privacy.
The walls of walled gardens benefit advertisers
Over the years, advertisers’ main argument in favor of open web advertising is the fact that the walls of walled gardens shut marketers out of the data collection process. Giant publishers, some argued, are more than willing to accept all the data marketers can provide but rarely send back even a fraction of their data to marketers.
Those high walls that they can’t see over have prompted marketers to worry about issues such as targeting transparency (who is really being targeted?), ad serving verification (how many impressions are really shown?), and biased measurement (how effective is my investment?).
But, the world has changed over the last few years, now making the walls of walled gardens advantageous to marketers. Consumer data privacy regulations limit marketers’ ability to run advanced tactics on the open web and impact many useful advertising tools, including ad targeting, personalization, retargeting, measurement, optimization, etc.
With their high walls protecting logged-in users, it’s possible that soon, these “enclosed ecosystems” will be the last haven for advertisers to continue running their advanced tactics. In fact, according to Skai’s recent survey of 117 U.S. marketing professionals on their current use and future plans for walled garden advertising, nearly 70% of marketers report that practitioners will move more budgets to walled gardens as a way to adapt to privacy challenges.
Walled garden advertising is essential in an opt-in world
As digital marketers brace for the post-cookie era, they will likely increase their reliance on walled gardens to reduce risk, especially in the short term. These publishers can target, personalize, and measure massive audiences of logged-in users based on the data those users provide voluntarily.
The advertising solutions that walled garden publishers offer can help marketers in myriad ways:
Better use of first-party data: In a cookieless world, first-party data, which users share voluntarily, is crucial for successful personalization. Walled garden publishers allow advertisers to take their own first-party data, such as email lists, and upload it to find both existing and lookalike customers.
Free, out-of-the-box native audiences: While third-party audience vendors offer segments for a price, walled garden publishers offer rich audience segments that marketers can use for free when targeting ads. Publishers like Facebook and Amazon have access to a wealth of data about user interests, behavior, and demographics, which advertisers can use to target while still respecting privacy.
Accurate, interchannel measurement: Cross-device measurement has long been a challenge for marketers hoping to create a holistic, omnichannel approach to advertising. However, publishers like Amazon and Google have unique insights into how advertising resonates with users across devices throughout their buyer journey.
Walled gardens are always adapting
The walls of walled gardens are certainly not designed to keep advertisers out. This year, the majority of digital ad spend, nearly 81%, will go to a handful of publishers. One of the benefits of so much ad spending going to the walled gardens is that those few publishers are more incentivized to adapt to the new needs of marketers to keep those investments coming their way.
A great example of this adaptability came a few years ago when Google and Facebook changed their policies to enable ads to be directed to retailers rather than forcing advertisers to point ad traffic to their owned properties. Shortly after, Amazon launched Amazon Attribution, which enables marketers to measure the impact of those search and social ads that drive to its store.
These two innovations are changing how advertisers approach online commerce marketing, and with so much of advertisers’ resources and attention focused on walled garden advertising, chances are, these innovations are just the beginning.
Skai’s omnichannel marketing platform ushers in a new era of walled garden advertising
Since 2006, Skai has earned the trust of notable brands such as Reckitt, DoorDash, Sony, Philips, and L’Oreal. We’re the only platform for omnichannel advertising across walled garden media — our unique solutions allow marketers to consolidate media planning and performance management, increase revenue and cost-efficiency, and win every shoppable moment.
We invite you to schedule a quick demo to see our innovative platform for yourself.
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