We are increasingly talking about the split in the digital media landscape. With the development of Web 3.0, we are faced with both the open web and walled gardens. Due to the manner in which digital advertising activities are conducted, these media ecosystems, which are an important part of the web, are undergoing rapid transformation at present. In this post, I will explain the difference between the ecosystems and their unique characteristics from the perspective of digital advertising.
What are walled gardens and what is the open web?
Most discussions about digital marketing revolve around the top three players in the market – Google, Facebook, and Amazon. eMarketer (source: eMarketer, November 2021) estimates that these three tech giants account for 64% of the entire digital advertising spend, so it’s no surprise that they are at the center of attention. They are able to achieve such large market shares because they operate on a walled garden principle. A walled garden is a closed platform or ecosystem where the provider, who also owns and manages the platform, has complete control over the content and data and restricts access to them at their discretion in order to create a monopoly. As a result, the platform owner alone sets the rules of the game, which can also change unexpectedly.
The open web, on the other hand, is the web environment outside of walled gardens, which offers advertisers more flexibility in who they want to work with, when and how they want to share their data, and how they want to measure their success. These environments give advertisers greater control over their data and better awareness of each customer touchpoint. In contrast to data in walled gardens, which is accessible to competitors, the open web and data management platforms (like iPROM Private DMP) allow advertisers to identify target consumers and track and build their own secure private data warehouses for processing and targeting. As consumers consume different media and platforms and switch between them, only the open web can give advertisers the comprehensive view that is essential for more effective advertising.
Advertising on the open web vs. walled gardens
When conducting campaigns in walled gardens, advertisers are compelled to use a closed ecosystem and have no choice but to use the provider’s data and ad servers, and rely on performance data from the same platform owner. However, without independent and transparent data, comprehensive optimization and strategic long-term planning are not possible. The data in walled gardens is only available to the platform owner, who has a vast amount of personal user data on the one hand, and an enormous amount of advertising data on who is responding to advertisers’ messages and how on the other.
All of this data is then aggregated and put up for sale to advertisers for targeting through a bidding system. It is very likely that these results are accurate because enclosed garden systems exert such a high degree of control over their environments. In addition, due to cross-device functionality, data from walled gardens is very valuable as brands can reach users across multiple devices. While there are benefits to this, it also represents a great risk in terms of protecting users’ privacy, advertisers’ data, and the reputation of the brand.
The main advantage of the open web is its transparency
While the open web, represented by websites and web services that are accessible outside of walled gardens, is very adaptable, many brands operating within walled gardens do not want to leave because that is where their target audience is. However, this is also changing as a result of social media saturation and privacy concerns. Advertisers are aware that investments in the open web are strategically important if they want to create an agile marketing strategy. The main advantage of the open web is its transparency. Publishers, brands, and the end user all benefit from the global market and easy access to information. In addition, it provides greater advertising efficiency, as demonstrated by our Fraport case study, where an airport achieves an enviously high return on advertising investments by using display advertising delivered through a programmatic backbone and its own first party data warehouse.
Currently, the main drawback of the open web is that managing advertising on it requires the use of specific knowledge and skills in advertising technologies and data management. But don’t worry, iPROM has everything you need for successful use of the open web. Would you like to talk about something or do you have any questions? Contact me by email: miha.rejc@iprom.eu.
In this blog post, I focused on the advantages that the open web offers to advertisers. In the next post, I will explain why web users currently have higher confidence in the open web and why advertisers include it in their advertising strategies to maximize their returns on advertising investments.
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