Do Walled Gardens Serve Us?
The digital world is run heavily by a few well-known brands including Amazon, Google, Apple and Facebook. Unfortunately, those who can’t compete in the growing market are left by the wayside. How do these mega companies control such a large share of the market? It’s impossible to point to one reason, but marketing certainly plays a role. Today, we’re going to discuss the walled garden approach.
What’s a Walled Garden?
Essentially, this term is used to describe any closed ecosystem operated by a single party. Inside the ecosystem, the operator controls all operations. Back in the 1970s, all phone hardware was owned by Bell System and there was no option to buy our own phone; this is a clear example of how walled gardens work. Today, a good example would be Apple and the iOS ecosystem.
Why the conversation surrounding walled gardens? Well, there comes a point where they start to undermine the ‘free and open’ web. Is it really still free and open? Or is it becoming a series of walled gardens where the environment is segmented and broken?
Snapchat Discover and Instant Articles from Facebook provide users with an opportunity to enjoy content while remaining on the platform; but suddenly, the digital publishers and content creators aren’t getting the exposure they need and deserve for creating the content in the first place.
In this guide, we’re going to uncover who is using walled gardens, the problems they cause for publishers, how they affect customers and more.
Who Benefits from Walled Gardens?
You won’t be surprised to hear that major companies and technology services benefit from walled gardens. Google, Facebook and Amazon get millions of customers on a daily basis, and they continue to create their own products, applications and services which keep people inside the ecosystem.
The Impact of Walled Gardens on Customers
Many experts in the industry believe that walled gardens are actually harmful to customers. There are a handful of reasons why this is the case:
Lack of Innovation and Customer Satisfaction
At first, walled gardens seem attractive to all parties involved. For the most part, they’re incredibly convenient for the customer and profitable for the company; yet there are many who believe that profitability would improve if everything opened.
Let’s look at Apple and Adobe Flash as an example, which are competitors. If the walls opened and Flash were allowed, we’d have more innovation and apps from developers and customer satisfaction.
Poor Choice
Another problem for customers is that comparison shopping is almost impossible within closed systems. Rather than seeing the whole picture, consumers only see what the walled garden operator wants them to see. Not only does this limit freedom of choice, but it also halts market growth.
Security Concerns
Security concerns have skyrocketed in recent years, and Facebook is the best example of this acceleration. Users benefit from connection with old friends and games/quizzes to pass the time, but with all this access to features, consumers are forced to forfeit a great deal of personal information.
How do ecosystems get around this? Well, they restrict certain features and content. Unless customers are happy to surrender personal information, some features are inaccessible. The platform wants all visitors to become members, and this means offering at least an email address.
Comparison Shopping Decreases
When a customer sits inside a walled garden for too long, they are less likely to do comparison shopping. Rather than searching for the best products and prices, they pay the asking price. Sometimes, this is because they’re accustomed to being inside the walled garden and don’t understand what’s available outside the walls.
The Frustration for Digital Publishers
Digital publishers have several frustrations when it comes to walled gardens. There are three, however, that stand out:
Breakdown in Communication
When companies like Facebook operate a walled garden, they hold all the power over personal data. We’ve seen the impact on customers, but this affects other parties too, as only select services can access the data. Google+ and Facebook wall off all the data they collect from everybody else on the Internet. Massive amounts of content get posted to social media everyday, but it remains invisible to the rest of the world — not even Google can crawl it.
The operators of walled gardens benefit the most, with the ability to improve targeting and marketing strategies as a result of the ecosystem. Most digital publishers aren’t getting anywhere near this data, and thus have no idea how the content has performed.
Tunnel Vision
To say that social media knows more about us than our best friends isn’t too far off the mark. For publishers, it’s easy to get tunnel vision and only focus on one group of users. As time goes on, publishers focus more and more on one user group. Speak to any digital publisher and they’ll tell you that walled gardens prevent cross-device targeting, message sequencing and opportunities to learn about frequency and reach.
Self-Cannibalization
While we’ve focused specifically on social media, all companies have the opportunity to build a walled garden. News outlets like the New York Times have used walled gardens to require a subscription account to bypass their paywall and access content.
Why is this a problem? As soon as a website like this hands content to a social media platform, it competes against itself. When the content is free on other platforms, why would any customer pay to read it from the original source? Unfortunately, it loses out twice; once because customers no longer pay the fee and again when it loses access to data insights. Now, the business can’t learn what content performs best and how to improve targeting.
The Future of Walled Gardens
Do walled gardens serve us? Well, we’ve seen that the companies behind walled gardens benefit, but customers and digital publishers don’t. What’s next for the industry? Will the mega-companies win? Will publishers gain access to data that helps them grow?
In an ideal world, we would stop building walls and start sharing so that consumers can access content and publishers can tap into data. For this to happen, platforms hosting the content need to make money through their own apps and sites instead. With the consumers as the focal point, companies should encourage them to stay, while also giving them the power to leave whenever they want.
If you want to grow your own walled garden, know that even the might of Twitter has struggled in the past… it’s not easy. Essentially, you need to build your own marketing stack so that advertisers see you as a competitor to other walled gardens.
