Behind closed doors! How walled gardens control the digital marketing world? – Brand Wagon News

Behind closed doors! How walled gardens control the digital marketing world? – Brand Wagon News

You create a monster, you have to feed the monster. Probably, this is the reality of what we call walled gardens. A walled garden is a closed ecosystem where the platform has total control over the content available and also controls users’ access. From here the concept of ‘Big Five’ can be understood which includes giants such as Google, Meta, Amazon, Apple, and Microsoft because these control the majority of digital audiences. As per the market research platform Statista, in 2022, the share of the world’s largest walled gardens – Alphabet, Amazon, Apple, Baidu, Facebook,, LinkedIn, Microsoft, Pinterest, Snapchat, Spotify, Tencent, TikTok, and X (Twitter) – in global digital advertising revenue was estimated at 78%, leaving 22% for the so-called open internet. By 2027, the big players will account for 83% of the digital ad revenue. In this scenario, advertisers face a crucial choice of how to distribute their campaign budgets between the walled gardens of social media and search, and the vast domain of the open internet. “The open Internet has flourished with the rise of new media channels, such as over-the-top (OTT), Connected TV (CTV), and music streaming. Although walled gardens have gained large numbers of users over the past decade, the open Internet has gained prominence, reaching almost 600 million users in India, 11% higher than that of walled gardens,” Tejinder Gill, general manager, The Trade Desk, said. As per the report published by The Trade Desk, even though consumers spend less than half (48%) of their digital media time on walled gardens, marketers in India are investing 5.5 times more ad spend in these closed ecosystems. In contrast, the open Internet, which captures 52% of consumer time, receives only 15% of the nation’s ad budgets. The rise of wall gardens? As Google stepped on the paddle with the phase-out of third-party cookies from January 04, it has led the advertising and marketing world to shift its gear completely. What this also means, is that gradually publishers or advertisers will have a view of the cohort of users as opposed to user details. For instance, a user who has searched automotive details will be part of the cohorts of users who also look for auto-related topics. “Now as we enter the cookieless era, the open internet which operates largely in cookieless environments offers marketers the opportunity to future-proof their advertising strategies,” Gill highlighted. Many believe that while consent is one part of the game, more direct access through first-party data will allow both platforms and advertisers to optimise spending. “This can give brands a huge advantage in optimising their media spending on large media platforms. Brands can scale their first-party data activations by leveraging platforms like Shopalyst which also help address regulatory requirements such as digital personal data protection (DPDP), general data protection regulation (GDPR), and others,” Girish Ramachandran, co-founder and CEO, Shopalyst, said. Recognising the imminent departure of third-party cookies and its impact on Google’s closed advertising ecosystem, “We are maximising the use of first-party data for precise targeting while upholding user privacy. Exploring and adopting alternative tracking solutions such as cohort-based targeting and AI-driven models are part of our strategy. Additionally, we actively diversify our advertising portfolio beyond Google’s ecosystem, ensuring a well-balanced and robust advertising strategy for sustained success. AI is going to play a key role in the future of advertising,” Anshul Agrawal, director, Mysore Deep Perfumery House & Zed Black Agarbatti, said. A charming garden! To be sure, the common notion is that given the fact that marketers spend a major chunk of their advertising budget on walled gardens, there must be something valuable that these platforms are providing. Industry experts believe that it is a reality that large platforms provide access to large audiences for brands and hence get a dominant share of digital ad spending. “While these platforms operate as walled gardens, they also provide enough opportunities for brands to innovate and drive better communication, engagement, and sales with digital consumers,” Ramachandran added. Queries sent to Meta and Snapchat remained unanswered till the time of publishing this story. Besides being a one-stop destination platform for all advertising, and marketing needs along with a large audience base and possible wider reach, these few major tech players in this industry dominate and control what, when, and whom to show the content or advertisements. “We recognise the significance of walled gardens for marketers, including valuable user data and enhanced targeting capabilities. However, we also realise the challenges of limited visibility into performance metrics and possible transparency issues in pricing models within these platforms. To address these trade-offs, we rely on efficient data optimisation through advanced analytics, revealing meaningful insights,” Agrawal highlighted. What about small players? Given the substantial advertising budgets allocated by major brands to walled gardens, startups, and small-scale businesses lack the financial capacity to compete. Moreover, some brands say that they remain sceptical about the transparency of these platforms, despite investing for enhanced reach and visibility. “I believe that digital marketing is still a grey area for any brand owner, If we are advertising on Google, the website itself tells you all the relevant data, such as how many impressions are there, or how many clicks are there, and so forth. I don’t think there are any third-party tools to verify whether that data is correct or not. So, as a traditional brand, if MDPH advertises in newspapers, we will know that we have bought something tangible that 24 by 50 square centimetre print ad has come in select cities and then there are third-party agencies to verify the readership of those newspapers,” Agrawal stated. These platforms might play a major role in the advertising and marketing world but industry experts believe that it is not the only way to build a brand. “Focus on building strong first-party data strategies through loyalty programs, surveys, and website interactions. Partner with niche publishers and alternative ad networks to reach specific audiences. Experiment with contextual targeting based on website content and user behaviour. Leverage data aggregators responsibly for broader reach while maintaining privacy compliance. Prioritise creative excellence and strategic audience understanding to stand out in walled gardens,” Bhavik Mehta, founder and CEO, Thinkin Birds Communications, said. It is easier said than done. Creating first-party is necessary and mandatory now but there still is a need for a platform to engage with newer audiences. “The agile and nimble approach of smaller agencies and independent businesses will always be on the cutting edge as outliers. Yes, there are challenges to accessing crucial data, but then there are workarounds also being created at a quick pace. As long as the basics of the product and campaign are sound, and in place, it’s only a matter of time,” Prateek A Sethi, founder, TRIP Creative Agency, said. Is something fishy? As closed ecosystems, it is believed that walled gardens do not offer full transparency and objectivity. This is largely due to limited access to measurement, attribution, and reporting data for their campaigns across channels. Marketers are frustrated by the inability to measure performance and to understand what works, at a granular level. “Our current landscape requires an internet where relative ad value can be determined in a clear, transparent way. Greater transparency on the open internet allows marketers to evaluate campaign performance and iterate more accurately. This, in turn, enables more informed decision-making for channels and better return on investment (ROI). With these insights, marketers can power better-performing campaigns across all channels,” Gill emphasised. From the tech perspective and inorder to not surrender to these walled ecosystems leveraging AI-driven analytics tools can provide comprehensive insights that will compensate for the limited visibility within walled gardens. “Advertisers should consider partnerships with industry consortiums advocating for standardised practices to foster transparency. These approaches collectively empower advertisers to navigate the complexities of walled gardens, promoting efficiency and accountability in their campaigns,” Vineet Bajpai, founder and CEO, Magnon Group, advised. Furthermore, to mitigate risks associated with walled gardens, industry experts advise marketers to diversify their media investments beyond walled gardens. Some of the best content we enjoy comes from the open internet including OTT, CTV and music streaming platforms, and a large majority of this is funded by advertising. The disconnect between consumer time spent and ad spend on the open internet demonstrates a significant opportunity for today’s marketers. link

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