This week, we step into the walled garden that is digital advertising. It’s a jungle out there.

Adapting to walled gardens

What’s the new state of things in digital advertising? And how can we move forward?

Ian Bennett

New Business

Intelligent Systems Design

6 minute read

I want to start with a definition, in case you’re not familiar with the term ‘walled garden’ beyond Flower Power catalogues and mediaeval paintings. It occurs when a service provider controls all the applications and content on their platform, essentially limiting the set of technology or media information provided to users with the intention of creating a monopoly or secure information system.1

And they’re everywhere. Consider Apple’s seamless iOS ecosystem of iPhones, Airpods and watches. Or even as an extreme example, North Korea’s national intranet service ‘Kwangmyong’ which permits no information to enter the network without government approval.2
In short
  • Walled gardens help brands create integrated product or information ecosystems.
  • The crumbling of Chrome’s Cookie tracking has changed the way media is bought and sold across the industry.
  • Advertisers will have to start trusting walled garden algorithms to reach the right audiences and users.
In the olden days…
…Or actually, just last year, online publishers liked to take lots of advertising inventory through platforms like Chrome that were ‘programmatic’. It was fast, efficient and very lucrative for them. It also created huge internet advertising buying monopolies (platforms) as advertisers looked to reach huge audiences as quickly and cheaply as possible.
Then things got uprooted
This worked very well for a while. But tech companies decided they wanted more control and a bigger slice of the advertising revenue. Historically, their advertising revenues as a share of the market did not match the ‘value’ of their user base. So this closed ecosystem allows them to talk directly to advertisers and ensure that any ads are directly relevant to the platform’s user base.

What’s more, as tech companies’ reach and power grew, they were suddenly dealing with complex global and regional privacy concerns. Think Mark Zuckerberg having to defend Facebook in front of the US Senate. This was when Google decided to kill third-party cookies on Chrome, nailing the coffin shut for intrusive tracking technology, and radically impacting the way programmatic platforms could target and reach users.

Essentially, the entire online media and advertising landscape had just been uprooted.

“Campaign planning will now need much more discipline and foresight.”

How this affects business
Overall? You’ll no longer be able to simultaneously buy an audience across multiple digital platforms. Instead, you’ll need to talk to Apple, Google, Facebook and any number of other major online publishers directly. Take Reddit, for example. To reach their whopping audience of 52 million daily active users, you’d need to use the Reddit Ads Platform and create ‘native ads’ which are seen only on their site or app.

This has some interesting implications for marketers:
  • Big walled garden corporations will likely have sales teams that work directly with advertisers. This means media agencies might have to watch out as their market reach will be challenged.
  • Advertisers will have to start ‘trusting the algorithm’ of the specific walled garden they are using to place ads. Google, Facebook and Amazon don’t provide advertisers with a lot of control or insights required to make independent buying decisions.
  • There will be a lack of accurate measurement and attribution across each walled garden, meaning that brands will need to develop more holistic, advanced measurement frameworks to track their ROI.
  • Smaller publishers who stay on the open market and continue to rely on the programmatic platforms will have their prices challenged.
  • Businesses will need to rethink their entire approach to CRM. Optimisation will become one of the key measures of success for marketing departments.
How to handle it
A lot of thinking needs to go in to adapting to this new state of things. That’s where in-house and agency resources must be used to their respective strengths.

A digital campaign must now use assets tailored to every individual platform. No more ‘one size fits all’. To ramp up production, companies should bolster their in-house agile services.

But this should stay at an executional level, because campaign planning will now need much more discipline and foresight. That’s where an external agency comes in. Guidance from a strategy-focused agency, well experienced in navigating this more complex media environment, is going to be crucial going forward.

On walled garden spend
Walled gardens are on their way to becoming common internet scenery. 73% of advertising budgets are already fortifying the walls of Google and Facebook, while Reddit’s ad revenue rose by 192% after erecting their closed ecosystem. With those impressive figures, we can see why tech companies are grabbing the bricks and building.
The big shakeup
It looks like we’re not just saying goodbye to cookies. Apple’s announcement of iOS15 sees the inclusion of a world-first Mail Privacy Protection feature. The update allows users to block third parties from information such as email open rates and click-though metrics.

With such a big change pending for below-the-line metrics, it means a significant rethink to marketers’ approaches for measuring campaign success.
  1. Techopedia, Walled Garden, Techopedia.
  2. Wikipedia, Closed Platform, (April 2021) Wikipedia.

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