In this article…
Digital marketers face an ongoing challenge in the form of “walled gardens,” closed online ecosystems where it is difficult to access user data. As we get ready for 2024, it’s more important than ever for marketers to evaluate the current challenges and opportunities surrounding walled gardens and to take stock of the impact of walled gardens in marketing as an industry.
What is a walled garden?
A walled garden is a closed online ecosystem controlled entirely by one tech company. Advertising on these ecosystems is fairly locked down, as major tech companies with walled gardens tend to tightly control access to the user data, content, and advertising that appears within the ecosystems.
Some examples of walled garden ecosystems include Google, Facebook, Amazon, and Apple. These walled gardens have particular advantages, like access to massive user bases and precise targeting within the individual ecosystems. It can also be difficult to reach said audiences outside of the ecosystems, reducing the amount of control you have over your advertising strategies.
Learn more about walled gardens.
Learn the differences between walled gardens and hedged gardens.
Integrated marketing is more important than ever
Today, it’s become more crucial to connect with consumers over multiple touchpoints, which can be done from tech like connected TV (CTV) to websites, mobile devices, and even shopping in a physical store. However, as integrated marketing gains utility, many platforms with walled garden ecosystems have increased, making a truly integrated and personalized marketing strategy more difficult in many situations. As a result, many marketers have realized the value of a more streamlined marketing approach, emphasizing the importance of fully integrated advertising strategies.
Though there are surely marketing advantages to gain from walled garden ecosystems, especially in audience size, the challenges they pose will require you to innovate and find more creative ways to engage with your audience from platform to platform.
Perspectives on walled gardens from Cannes Lions 2023
Offering a poignant view of industry trends and ideas, the Cannes Lions International Festival of Creativity of 2023 had much to say about the significance of walled gardens in the marketing world. Let’s look at two key takeaways from this year’s festival.
Retail media
In recent years, many retail companies have started selling ad space within their own walled garden shopping platforms, dubbed “retail media.” Platforms like Amazon and Walmart have developed their own particular advertising ecosystems where they sell ads to marketers within the shopping environment itself.
Navigating the sell-side of retail media’s walled gardens
While retail media offers marketers unique opportunities, it’s not without its challenges. For one, ad space in these environments is limited, so the competition can be difficult on the sell-side, leading to higher ad costs. Additionally, this shift in dynamic also forces marketers to change how they prioritize their marketing channels, looking closer at the results of their efforts rather than focusing on particular channels within the platforms themselves.
Opportunities in the buy-side of retail media’s walled gardens
Brands on the buy-side see various benefits from advertising within retail media channels and walled gardens. By browsing in an online shopping environment, the users in these ecosystems are likely high-intent shoppers, people who are further down the sales funnel and who are ready to make a purchase soon. Shoppers can also be precisely targeted within these environments, as marketers are given the ability to access very specific audience segments based on details like shopping behavior, preferences, and even purchase history.
Omnichannel marketing
To more effectively engage audiences even among an abundance of walled garden ecosystems, speakers at the 2023 Cannes Lions Festival discussed the importance of omnichannel marketing. By emphasizing strategies that reach the consumer through multiple touchpoints, marketers can deliver a unified brand experience across channels. This allows marketers to focus more on results than specific advertising channels, including walled garden platforms.
Walled gardens aren’t going away in the near future
Though various challenges are associated with walled gardens in advertising, they aren’t going anywhere. So, what’s the current state of these environments throughout the industry?
Efforts are being made to break down walled gardens in tech
In a handful of countries, regulatory actions have been put forward to address how dominant many major tech companies are in their respective markets. One major example of this is Meta and Google’s entanglements in Canada. Currently, neither company can display news on their websites in the Canadian market. This decision was reached to give Canadian news agencies more control over their advertising revenue since, previously, the tech giants received more views and, therefore, gained the ad revenue. Though relatively small, this does indicate a certain shift in dynamic.
Why companies are resisting
Despite their challenges, walled gardens in 2023 persisted, mainly because they are particularly adept at generating revenue for the tech companies that control them. In 2022, 78 percent of global digital advertising revenue came from these closed ecosystems, and projections expect that figure to rise to 83 percent by 2027. From the viewpoint of a company that operates in a walled garden, the idea of releasing their control over their environment represents losing out on a stream of vast revenue, making letting go of a walled garden ecosystem an unattractive prospect.
The future of walled gardens
As time progresses, what can digital marketers like you expect from walled garden ecosystems in the near future?
A cookieless future
A huge element to consider is the transition to a cookieless future. Many major browsers have begun phasing out the use of third-party cookies. In the wake of this decision, many are looking for reasonable alternatives that allow for behavior tracking and more personalized advertising experiences. Solutions like Experian’s identity resolution can provide a strong alternative option, allowing marketing strategies to adapt to the current landscape.
An influx of mini gardens
You should also anticipate the proliferation of various smaller, specialized walled garden ecosystems in the future. These so-called “mini gardens” specialize in more niche audiences and industries, and they can present their own challenges and opportunities.
Alternative IDs
As you search for new identification methods outside cookies, various alternatives have presented themselves, requiring further exploration and experimentation. Among these are privacy-compliant solutions like Unified ID 2.0, which allow you to serve more personalized ads without compromising the consumer’s privacy.
Navigating the evolving landscape of walled gardens in 2024
As we begin 2024, you will continue facing opportunities and challenges regarding walled gardens. The 2023 Cannes Lions International Festival of Creativity re-emphasized how important it is for marketers to stress omnichannel marketing within walled garden environments and become well acquainted with identity resolution solutions as we move into a cookie-less future. All of this requires you to become comfortable with walled gardens being here to stay and innovate to navigate an evolving and developing landscape.
We’re here to help you navigate the evolving landscape of walled gardens in 2024. Contact us today.
Latest posts
In a previous blog entry, Ordering sushi and a lesson in embracing the contextual marketing mindset, I showcased a fictitious scenario that required complex data point integration to pull off. These kinds of programs can seem overwhelming given the three barriers that many organizations face when embarking on their contextual marketing journey: Marketing sophistication A brand’s own conventional mindset and the programs that support it Actionable data Lack of clean and accurate data that prohibits real-time “on the fly” interactions Technology Disparate systems that are unable to link information across repositories, channels and interactions; inability to automate interactions in real-time Regardless of the barriers, there are ways you can show customers you’re listening and provide contextual messages without “boiling the ocean.” Take, for example, the recent viral blue/black vs white/gold dress debate. As the conversation spread throughout Facebook and Twitter, brands like Dunkin’ Donuts and Tide tweeted these contextual messages: The tweets did not go unnoticed as thousands of followers retweeted, commented and favorited these messages. The contextual elements used in these messages — channel preference and breaking/relevant news — are easily accessible to any brand. While the brands had to act swiftly, executing these messages circumvented the three barriers listed above. On the flip side, addressing the barriers can allow a brand to build more sophisticated, targeted contextual messages, as shown in the below example. Here, Experian Marketing Services and technology partner Movable Ink helped Finish Line deliver this sale announcement that adjusts based on the date and time the customer opens the email. The message remains relevant via a countdown clock during the run of the sale, a “warning” when it’s about to end and an alternative message after the sale ends — all of which ensures that the message is relevant regardless of when it’s opened by its intended recipient. And combining more contextual data points, such as location and stock, Finish Line includes the countdown, a local map to the customer’s nearest location and up-to-the-minute inventory of available sizes. Contextual marketing enables modern enterprises to engage in customer-centric conversations that — like any meaningful relationship — deepen across time and future points of engagement. This is particularly true in an era when consumers are overwhelmed by untargeted and disruptive marketing messages. By contrast, contextual marketing is designed to seamlessly and usefully merge into the customer’s daily activity. Want to know more and how to get started? Download the eBook From campaigns to context: Making the move to contextual marketing.
With online video viewing at an all-time high and television networks and system providers increasingly making video content available to those who don’t pay for television, many are wondering if we’re on the cusp of a massive spike in cord-cutting numbers. In our recent Cross-Device Video Analysis, Experian Marketing Services found that that 7.3 percent of all U.S. homes are cord-cutters, meaning they have high-speed Internet but don’t pay for TV. And the pace is increasing. In the last year alone, one million more homes joined the cord-cutter ranks bringing the total to 8.6 million households. It should come as little surprise that cord-cutting is on the rise. As we reported in our video viewing habits post, 57 percent of all American adults and 75 percent of Millennials now watch some sort of digital video during a typical week with the smartphone being the most commonly used device for watching video either streamed or downloaded from the Internet. Consumers thinking about cutting the cord will find an industry increasingly working to remove barriers that typically stand between cord-cutters and programming from their favorite networks — in exchange for a small fee. For instance, CBS recently announced the launch of CBS All Access, a digital subscription service that provides live and on demand viewing of CBS programming. And Dish Network launched Sling TV, an over-the-top pay service that allows cord-cutters to stream live and recorded programming from networks like ESPN, Univision, CNN, HGTV and more. With HBO announcing an April launch of their digital-only streaming service, HBO Now, March may be the last month that many pay for cable or satellite. If the cord-cutting ranks are, in fact, about to swell, a common question is: by how much? Experian Marketing Services estimates that there are currently 13.8 million Americans — representing 5.6 million homes — who are prime to cut the cord. Many of those individuals already have one foot out the door, if you will, given that they are more likely than average to say that they watch less television today because of the Internet. They are also more likely to watch HBO and be fans of at least one major professional sport making them good targets for Sling TV and HBO Now. Given that many cord-cutters already pay for Netflix and/or Hulu Plus, the net savings to those on the fence may be smaller than they think once they add up the costs they’ll assume from piecing together, à la carte, the various subscriptions and downloads required to keep watching their favorite programs. Whether or not we’re on the cusp of a major spike in cord-cutting, the fact is that consumers are increasingly getting their video content from digital sources and marketers need to understand where, how, when and what consumers are watching to ensure that their video campaigns are optimized for today’s digital consumer. For more information about cord-cutters and cross-device video consumption, including consumer receptivity to digital video advertising, download the Cross-Device Video Analysis.
Advertising Age recently released their annual Marketing Fact Pack, featuring data from Experian Marketing Services that looks at habits of digital consumers. This post highlights some of these findings. In the 2015 AdAge Marketing Fact Pack, we featured stats on key marketing and consumer trends impacting the advertising industry. Highlights include the lifestyle of the digitally connected consumer, including the habits of smartphone and television users, household and personal use of smart devices and the choice between becoming a cord-cutter and staying connected. An estimated 7.3 percent of U.S. households (8.6 million homes) today are considered “cord-cutters,” meaning they have high speed Internet but no cable or satellite television service. That number is up from 4.5 percent of households (5.1 million homes) in 2010, a comparative increase of 60 percent. Despite the growing number of consumers who use digital devices to watch video (as opposed to viewing on a television), it has not been enough to overwhelmingly convince all households to cut the cord. Instead, it seems as if the ability to stream or download video directly to the television is what ultimately seals the deal. As streaming devices like Roku, Apple TV, Amazon Fire TV and Google Chromecast become more common and as televisions themselves are increasingly connected to the Internet directly, we can only expect the number of cord-cutters to grow. To learn more about video viewing behaviors to improve your strategies for reaching digital consumers, register to join our upcoming webinar Online video: engaging consumers in a multi-screen world.