If you've spent any amount of time in the digital media trenches, you're likely familiar with the concept of "walled gardens."
But for a quick refresher: in a digital advertising context, a "walled garden" refers to a closed platform or ecosystem in which everything is under the control of the platform provider. Every bit of content, every application, and—most relevant to our purposes here—every advertisement exists at the platform provider's discretion. What they say goes, because inside their own cyber-kingdom, they make the rules.
The most important walled gardens, for digital advertisers, are Meta, Google, Amazon, TikTok, Snapchat, and Pinterest. But really, it's Meta and Google that matter most. Industry insiders tend to refer to them as "the duopoly." Their dominance may be fading somewhat, though. In 2022, they were projected to capture 48.8% of all US digital ad spend, a roughly 6% decrease from their peak five years earlier.
Walled Gardens: Advantages and disadvantages
Obviously, if nearly half of all US digital advertising dollars are going to the duopoly, there's a reason for it. Year after year, marketers of every stripe are continually drawn back to these walled gardens. This has something to do with the sheer size of their audiences: YouTube—to cite just one ultra-popular platform—has over 2.6 billion users worldwide. Meanwhile, Meta's Instagram and Facebook have 2 and 3 billion users respectively.
But it's worth discussing some of the other advantages that Meta, Google, Amazon, et. al. offer advertisers. For instance, users of services like Instagram and GMail are dedicated, as they often log in multiple times a day. Accordingly, the walled gardens are flooded with hyper-precise information on their users and their interests. In addition to information accuracy, advertisers can benefit from cross-device tracking and stronger security.
Of course, for advertisers, there are countless disadvantages as well. For example, lack of transparency and difficulties with conducting cross-platform campaigns. Information from walled gardens can sometimes be skimpy and unilluminating, lacking the detail advertisers need to know.
Over the last few years, many digital advertisers have grown tired of the restrictions imposed by walled gardens. They're beset by concerns on every side. On the one hand, the demise of the third-party cookie is growing closer and closer, which gives platforms like Google and Meta even more power. On the other hand, advertisers don't want to have to rely entirely on walled gardens to reach consumers.
Luckily, there are more options than ever when it comes to reaching consumers outside of the walled gardens. Accordingly, we're now seeing what some have described as "the great media migration towards independent ad tech."
Independent Advertising Technology
Independent ad tech is a broad category. It includes everything from supply-side platforms (SSPs), where impressions are put up for auction; demand-side platforms (DSPs), where advertisers bid for those impressions; and ad exchanges and ad servers, which help to facilitate all this activity. Notable players in this space include OpenX, Index Exchange, LiveRamp, Pubmatic, MediaMath, The Trade Desk—and, of course, EX.CO. Independent media agencies and independent advertising agencies have been around for a long time, but they've returned to prominence as advertisers grow more and more tired of the restrictions that walled gardens have put in place.
Ad spend transparency
As mentioned, the walled gardens make it difficult to figure out exactly where your ad spend is going. They don't have to tell you anything they don't want to: if advertisers want access to their vast stores of data, they need to fully comply with their rules. Outside of the walled gardens, there is much more transparency: advertisers get a much clearer sense of who they're reaching and whether they're spending their money effectively, and publishers can continue to build relationships with advertisers directly.
Effective customer support
Walled gardens like Google and Meta operate at a scale that makes individualized customer support almost impossible; they're simply too big to provide the one-on-one assistance that many advertisers want. The independent ad platforms, by contrast, are small enough to provide direct help to their clients—unlike the big walled gardens, they don't operate with a take-it-or-leave-it approach, and tend to work hard to improve the customer experience.
Personal data ownership
In the context of a walled garden, advertisers can almost guarantee that they will not see–and definitely not own–any of the data collected from their flighted campaigns. Independent ad tech companies, by contrast, are typically more than happy to let clients upload their own data for targeting purposes, work with third-party data management platforms (DMPs), and share data back.
Customization: Power to the publisher
The walled gardens tend to offer clients a one-size-fits-all approach; other programmatic advertising platforms, meanwhile, typically allow more room for customization and collaboration to meet a given advertiser's needs. Companies like EX.CO, for example, also work with publishers to ensure ads run smoothly, earn high viewability, and will not disrupt the user experience or content consumption.
Publishers: The Impact on Digital Advertising
When discussing walled gardens in a publishing context, the first example that inevitably comes to mind is The New York Times: their relentless growth tactics have led them to an astonishing 9.33 million paid subscribers.
In part, the Times' subscription efforts were a direct response to the dominance of the walled gardens: over time, the walled gardens proved themselves to be unreliable partners, shifting algorithms on a whim and in some cases, grossly inflating actual impressions. This was part of a broader industry trend, in which outlets like the Times and Business Insider consciously took control of their own destiny by decreasing their reliance on other walled gardens such as using Facebook to drive traffic to sites. Instead, they’ve successfully built subscription models that keep exclusive, more valuable content behind paywalls which continue to entice readers to subscribe. And many other publishers are following suit.
These moves have given publishers tighter control over their audience data and granted them more flexibility when it comes to different kinds of monetization—programmatic display and video advertising, content recommendations, etc.
EX.CO helps connect advertisers to publishers
Many publishers aim to replicate what has been working for the big players. EX.CO always keeps the needs and wants of publishers top-of-mind and strives to ensure our customers are benefiting from multiple sources of revenue growth, including preparing them for the looming post-cookie age.
We're a self-serve, one-stop-shop solution for every aspect of video: we help to maximize yield by empowering publishers to own their own video content and monetization strategies. We also provide OVP (online video platform) solutions including a proprietary video player, ad server, video library, playlist manager, and more. Most importantly, we empower publishers to retain full control of their websites.
Because of our close relationships with so many publishers, we leverage audience insights to help advertisers reach their targets at scale and with confidence using AI-driven and machine learning capabilities, our robust recommendation engine, cookieless signals, and deep contextual targeting.
Walled gardens have defined the last decade-plus in tech. With the looming depreciation of third-party cookies, innovations in independent ad tech provide the most sustainable way forward for advertisers looking to reach their target audiences. With the looming depreciation of third-party cookies, innovations in independent ad tech provide the most sustainable way for publishers to monetize, and for advertisers to reach their target audience.
Want to grow your own walled garden, or learn how you can reach target audiences at scale with video?