The term “walled gardens” comes up again and again, especially in programmatic advertising. They don’t exactly have the best reputation because they make free, data-based media buying more complex. Ultimately, however, the success of a programmatic campaign depends on the correct use of walled gardens. Doing without them would be a big mistake. But right from the start – what are walled gardens anyway?
Walled gardens – definition
In marketing, walled gardens are platforms that represent a closed advertising environment. They are characterized by the fact that they only sell their existing user data for targeting in combination with their own inventory. Advertising companies do not have direct access to the user information and must rely on the accuracy of the information provided by the platform. However, walled gardens also have some advantages: they usually gather a large number of users, which results in a lot of data about target groups. The information is also usually of very high quality due to the direct relationship between the platform and the user, making it extremely important for marketing.
Examples of well-known walled gardens include Facebook and Amazon. These are among the largest digital advertising providers, which shows that there is no way around closed platforms in marketing.
How is a walled garden created?
In principle, any service provider for data-driven marketing that generates user data on the one hand and provides the platform for advertising measures on the other can establish a walled garden. This includes social networks as well as publishers or magazines. One could even exaggerate: Almost every company is a kind of small walled garden, because every provider will initially try to keep as much data as possible to themselves. However, the impact on the advertising industry varies greatly. The more user data is available and can be analyzed, the more attractive a platform is for the advertising industry. It therefore often makes sense for smaller providers in particular to make their data and insights available to advertising partners in order to generate higher revenues themselves. The higher a company raises the walls around its own insights, the more likely advertisers are to consider how and whether they can circumvent the provider. As a rule, an overly protective approach is therefore worthwhile for the largest providers, such as large news portals or social networks, which are largely indispensable for marketing.
What are the disadvantages of Walled Gardens for advertisers?
Because user data is not accessible to advertisers in walled gardens, the precise targeting on the platform cannot be used in other channels. This creates silos that make online marketing more difficult. The more walled gardens are part of the marketing strategy, the more time-consuming it is for advertisers to keep track of the campaigns on the various channels. At the same time, this makes budget planning more difficult, as the available media funds have to be divided up between the various providers in a more complex and fragmented way.
Are walled gardens bad for online marketing?
One thing is clear: high-quality user data that can be directly assigned to individual users is worth its weight in gold in online marketing. Information such as this enables precise targeting and thus ensures greater cost efficiency in media buying. However, the data is only available within the platform’s ecosystem. It would of course be attractive for advertisers to collect all the information from different platforms and then use it for cross-channel media bookings (e.g. also via offline channels). Walled gardens have no interest in this practice. Rather, they are interested in binding advertisers to the platform, making it as attractive as possible and thus winning media budgets for themselves in the long term.
This shows that Walled gardens and advertisers have different interests, but are nevertheless dependent on each other. Closed platforms are therefore by no means bad for marketing, on the contrary. The key question is how companies can make the best possible use of the advantages that walled gardens offer in terms of precision targeting. The advantage that walled gardens have a new significance, especially in a cookie-free era, should not be overlooked. Even after the abolition of third-party cookies, they represent a way of precisely addressing and reaching target groups.
Achieving marketing goals in walled gardens
The main objective of online marketing has always been to reach and address target groups as precisely as possible based on their profile characteristics. Ads should therefore appear exactly where the target group is located, and the customer should always be the focus when addressing them. Whether a campaign is played out via a closed platform, i.e. a walled garden, or via “free” publishers is irrelevant to the aim of the marketing activities. For this reason, walled gardens are an option that very few companies can afford to forego.
Conclusion: Walled gardens are an integral part of the marketing mix
What we can say in conclusion: Walled gardens don’t always make work easier. Nevertheless, they are an integral part of a holistic customer approach. They should therefore not be neglected any more than traditional marketing channels. Doing without them means no longer reaching certain and potentially important target groups.
It is important to define a goal within the company (not to be confused with KPIs!) that all channels work towards in the best possible way. Although data exchange via walled gardens is much more difficult, the marketing objectives and target groups can be clearly defined. In this process, your own company becomes the instance where all available target group data flows together and is evaluated. Even if closed platforms such as Facebook do not pass on user data directly to advertisers: Insights about target groups and the success of individual campaigns can still be read out and evaluated with regard to the defined marketing objectives. Walled gardens should therefore not be seen as the sole basis for all measures, but as a supplement to other channels, both online and offline.
Our recommendation is therefore always not to leave walled gardens to one side, but to combine them sensibly with measures such as open programmatic.
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