Behind the Walled Gardens: How Big Tech Is Building Ad Tech


Even as the digital dominance of the Big Five in technology continues to improve our lives and the systems in which we live them, the untold amounts of consumer data, insights and insights these companies derive from their use proves to be a treasure for companies, brands and those who advertise them.

And as their rewards continue to accumulate, the more protectively they are stored, in their proprietary closed systems (platforms) used by their consumers, euphemistically named “walled gardens”.

Indeed, Siddharth Devnani, co-founder and director of SoCheers, believes: “As the big tech giants develop and grow, not only do they remain ‘walled gardens’, but their walls keep going up. . And that’s by design. They benefit from this setup because it allows very little competition against them. They have already established a stronghold in several market segments and this is what they are monetizing. »

Dr Meenakshi Aggarwal, Chief Operating Officer, 4AM Worldwide, agrees, saying: “No more GAFA or GAMA or MAMAA (Microsoft, Google/Alphabet, Facebook/Meta, Amazon, Apple) or whatever the latest acronym , businesses grow, the greater the need to operate as walled gardens. Walled gardens help these tech giants create monopolistic structures where their clients are forced to use their marketing stacks for various advertising-related requirements.

On a more technical note, clients use their DMP (Data Management Platform which helps in targeting based on their user data), DSP (Demand Side Platform to buy ads) and DCO (Dynamic creative optimization to personalize and control the transmission of advertisements) but only receive aggregated results from their campaigns.

“They don’t have access to raw data and so are forced to rely on the output of these companies. Although a company like Apple can’t monetize its data to the extent that other tech giants can do, it still functions as a walled garden due to its data privacy concerns,” adds Aggarwal.

And it is this powerful mix from which all sorts of data, information and consumer preferences can be gleaned that brands and their advertisers draw inspiration from.

Manna for marketers

Mitesh Kothari, Co-Founder and CCO, White Rivers Media believes that marketers spend more time and resources on closed-ecosystem “walled garden” platforms than on non-closed ones. He points out that walled gardens create an exclusive environment for advertisers by making themselves an irreplaceable part of a consumer’s life.

“Their amount of data makes brands dependent on them to develop their marketing strategies. Now that Google is phasing out third-party cookies from Chrome, this dependency will increase even further. Meanwhile, retaining a user on social media rather than diverting elsewhere is Facebook’s most significant move toward expanding advertising reach,” he says.

Aggarwal says becoming a walled garden is a big investment in long-term play. “If you are a publisher such as a newspaper or magazine, you always have access to high quality data and can operate like a walled garden. However, they will still need MAMAA’s support to optimize their advertising space. Walled gardens need to be of a scale to appeal to advertisers,” she observes, pointing out that even a company like Twitter has struggled with its walled garden.

Ironically, this also makes the services of these massive multi-billion (if not trillion) dollar companies not only important but also vital for startups and the little guy.

As Umesh Shashidharan, director of media planning and operations at FoxyMoron (Zoo Media) puts it, “the authority and respect that Google or Meta demand because of their reach and scale have become as important as the government for start-up ecosystems. Startups should be on the safe side of these networks and ensure that their listing or page does not get suspended as this can be a major hurdle for them.

“The duration of their journey to the top can be shortened or lengthened depending on their performance on these closed networks. The reliance on the algorithms of these platforms is so huge and the cost of overhauling the core strategy of any changes they make is a constant threat, especially for start-ups,” he adds. -he.

And all agree that with the phasing out of cookies and the expansion of these market leaders into even more segments, those walls will only pile up higher. And that’s not the only problem.

Build this wall?

Devnani observes that with so many functions falling under the big industry giants, it is quite difficult not to find yourself dependent on them for your day-to-day needs.

“This over-dependency is one of the major drawbacks of these closed systems. This was seen when TikTok was banned in India. People who were creating content on the app full time, even as their main source of income, were shocked when the app was no longer available to them. Some found their way to other similar platforms, but many of them didn’t, due to their reliance on a single app,” he says.

Kothari adds that marketers expect a more comprehensive view of their ad performance. “Brands typically get an aggregated view of their campaign performance instead of an individualized view that provides insight into campaign performance, leaving brands with an incomplete picture of their consumers and how they interact with them on social media. platforms. Overall, this makes it difficult to come up with strategies for brands,” he notes.

Devnani thinks another downside would be censorship. “Walled gardens” have complete control over the content of the platforms they own, which applies to politics, sensitive cultural issues, etc. Content moderation policies, while helpful at times, could be the reason why not all segments of the world’s population have a fair opportunity to express themselves on these platforms,” he says.

And then, of course, is the biggest question of all.

Shashidharan points out that all major advertising revenue is pocketed by these walled garden ecosystems because they control this huge pool of data first. This does not allow for a level playing field, but on the advertiser and publisher side, as the data is controlled by the major platforms.

“So partnering with them almost becomes a necessity. Some walled gardens like Google and Facebook have the concept of quality that gives a sort of equal playing field to all participants, but platforms like Amazon have yet to implement them, so ad spend capacity then becomes the main factor,” concludes Shashidharan.

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