Find out what a ‘walled garden’ is, why it’s so unpopular, and why we believe it can be a good thing.
The Walled Garden is often loathed in digital advertising, and many people would love to see them gone. But here at Crimtan, we have a very different view; not only do we hope they’ll continue to grow, but we believe this is good for the industry.
Our Chief Strategy Officer Robert Webster explains why.
What is a Walled Garden?
Before I reveal why I’m a fan of Walled Gardens, I need to quickly explain what one is. A Walled Garden is any buying point that sits outside the normal open RTB ecosystem and allows for the use of media, data or buying opportunities outside of that ecosystem.
A good example of a Walled Garden is the Facebook Audience Network. The Google Display Network, Google Adwords and Amazon Advertising Platform are also classic Walled Gardens. And we’re seeing new Walled Gardens appear regularly from major publishers (or groups of publishers), data companies, demand platforms and even agencies.
What’s the history of Walled Gardens?
The term ‘Walled Garden’ was first used by John Malone, the founder of Tele-Communication Inc, in the mid-1990s. He used it to describe a closed technology platform or ecosystem in which the service provider has control over applications, content and media. They also restrict access to non-approved applications or content.
The term has gone on to be used by many different industries, but usually in the context of a closed platform.
The first example of a Walled Garden was recorded in the 1970s when Bell System, a USA telecoms organisation designed a hardware specifically for their own network users. This hardware (telephones) was leased from the company instead of being owned by the users. Today Walled Gardens have become commonplace in many different industries.
Why do Walled Gardens exist?
Walled Gardens exist to protect assets, such as data, inventory and even buying models – and to ensure that assets are bought in a controlled fashion.
Put another way, if you were to sell your data in an open RTB world to 1,000 players, you’d fear leakage and the data becoming a commodity (or seen to be). But if you were to sell it in a Walled Garden, you could protect its use and value.
Why are Walled Gardens unpopular?
Many publishers dislike Walled Gardens because they make it harder for advertisers to buy their asset (data or media), and they worry they’ll sell less of it.
And while this is certainly true for some, it holds no fear for companies such as Google, Facebook and Amazon. Why? Because they know their assets are so valuable that advertisers will build entire campaigns around them.
So Walled Gardens work for the biggest companies, but what about the next levels down?
Imagine that you own arguably the best data in a vertical, such as travel, property or automotive. Would you make more money and gain more value for your firm selling data in a Walled Garden or in an open fashion?
When you factor in fears over use of data and GDPR, concerns over leakage, and questionable attribution over the use of data, I believe we’ll soon start seeing dozens of Walled Gardens in the data space.
For media, the argument is less cut and dried. But if you have unique inventory and formats, and can lock advertisers into a Walled Garden it can be effective.
Why are more Walled Gardens a good thing?
In a nutshell this is why I believe Walled Gardens will flourish. But why is this a good thing?
Having a Walled Garden means that real care is being made in the setup and packaging of data – if you fail to do this then the Walled Garden fails. Each Walled Garden needs to very succinctly answer a value proposition in order to exist, something I think the open data layer has occasionally lost.
Walled Gardens are often also better serviced in terms of finding strategies of use, setup support and best practice guides. And finally, they are self-serve and fairly easy to use by design.
All of this is good for the industry; it’s also good for programmatic specialists as they can choose the right Walled Gardens for each client and ensure that they are executed properly.
A more complex world of Walled Gardens also needs more experts to navigate, and that’s a good thing for brands as it usually means more effort going into valuable data and media. Running one Walled Garden can be done very simply, but handling multiple Walled Gardens alongside an open RTB program requires technology and expertise.
Walled Gardens aren’t for everyone
That said, Walled Gardens aren’t for everyone. Adding barriers to your media and data will only be successful if it is sufficiently valuable, and data and media owners need to be honest when considering the Walled Garden route.
Building a good Walled Garden is also an important task in terms of technology and service. And even if the data quality is there, there will be some harm done by adding friction to the process and making it harder for some to execute.
However for those that have that value proposition and the ability to setup them up successfully, a future with Walled Gardens can only be bright.