Walled Gardens Vs. Programmatic Advertising

26 May

What is Walled Garden?

The concept of the walled garden refers to to platforms that primarily use data from their own users to profile and sell advertising space within the same platform. Both data collection and ad display are performed within the same system (Facebook, TikTok, Twitter, Amazon, Google etc).

Google, Facebook, Amazon and even Apple (through their network of devices, operating systems, apps and marketplaces) function as giant walled gardens and dominate the digital advertising landscape today. In fact, in 2020 in the United States, Google, Facebook and Amazon alone accounted for more than half of digital media advertising spend by brands.
The relationship between Walled Garden and Cookies

The Walled Gardens are taking drastic measures not to share user data with third parties.

New regulations at European level and moves such as Apple’s move with its iOS 14 operating system are making it more difficult to collect and exploit
iOS 14 operating system are making it more difficult to collect and exploit third-party data for advertising purposes.

Against this backdrop, creating walled gardens that operate primarily with proprietary first party data has become a key strategy to prepare for change in the industry. But this is only possible in ecosystems with a large volume of users, and represents an impossibility for small content networks or applications.

¿Cow marketers balance programmatic advertising on the open Internet and spending in Walled Gardens?

In the wake of Google’s announcement of its disapproval of third-party cookies, coupled with the actions of Apple and Facebook, any real answer to that question becomes more problematic as we approach 2023 (when we should already be under a “full impact” of a cookie-free world as it is known).

The key issue here is that the vast majority of overt advertising on the Internet relies on third-party cookies, and walled gardens do not need third-party cookies for user tracking. Of Google’s announcement, Forrester analyst Joanna O’Connell said, “The third-party cookie is, for all its flaws, the underlying mechanism by which really the entire digital advertising ecosystem transacts and communicates.”

With Google removing that mechanism, many brands will apparently need to play more in the Google Sandbox as the only option.

In response to this, various advertising technologies are beginning to develop predictive models based on which to identify and profile users. The objective of this is to continue to show relevant ads to people and thus ensure the effectiveness of advertising investments.

So, does it make sense to keep developing advertising strategies outside of these Walled Gardens?

Yes. Fortunately, there are already major advances that largely solve the lack of cookies and data limitations in advertising ecosystems outside of these large walled gardens.

This factor added to the classic benefits of programmatic advertising, make it still profitable and effective to advertise in external media and programmatic technologies. Let us recall some of them:

• Flexibility in the technological ecosystem
• Transparency
• Greater freedom in communication
• Improved inventory and placements control
• Improved cost control and intermediation management

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