Walled Gardens vs. the Open Web: A 2022 Industry Overview & Outlook

The Big Picture

• Brand’s ad spends will continue to grow in size and increasingly shift to testing and investing in walled garden platforms, leaving the open web and an outdated targeting, data, and privacy landscape behind.
• At the same time, broader conversations around responsible marketing, brand safety, and suitable content alignments continue to guide marketing strategies, so questions around how walled garden technology options can support these goals are top of mind for marketers.
• There remains room for improvement around transparency and accountability for walled garden investment, including the need for more independent and accurate measurement solutions to audit media performance and ensure brand values are upheld.

How We Got Here

Advertising on the open web has been tied to the success of third-party cookies and tracking technology, programmatic ad buying, and a diverse landscape of publishers, technology, and measurement vendors competing that altogether keep the exchange transparent and, well, open. But now the open web and its traditional technology options are running into privacy concerns.

• Continued changes in data privacy laws (e.g. GDPR, CCPA), government regulations, and Google’s continued plans to replace traditional third-party cookies are disrupting existing advertising technology options commonly used across the open web. This is affecting companies that built their offerings around this tracking technology, as well as the advertisers that leveraged them.

While these changes are a welcome improvement for consumers with privacy concerns, they leave advertisers with less available technology options to navigate an even more complex landscape.

The Rise of the Walled Gardens

As a result, walled garden platforms such as Meta (previously Facebook), Google, Amazon and the like have become increasingly attractive destinations for brand’s ad dollars.

• Walled gardens offer exclusive and valuable first-party data options, advanced targeting technologies, and provide an ease and efficiency of all-in-one activation that lends itself to testing and optimizing more quickly, with dedicated in-house support teams.
• Not to mention, the walled gardens include major, name-brand social media giants like Snap, TikTok, Apple, Spotify and more that’ve each carved out unique — and largely video or audio format — content niches attracting more and more time and attention from key younger demographics.

The walled gardens’ ability to leverage safe and compliant, secure first-party data to reach qualified users gives brands the opportunity to connect and communicate directly with target audiences at scale and in ways now unmatched by open web options.

• And the money spent here speaks for itself. The Big Three — Google, Meta, and Amazon — combined took in nearly half (47%) all money spent on advertising during 2021, up from 39% the year prior, and there are signs that this is unlikely to slow down.
• Digital ad spending as a whole is set to continue its current growth trajectory by an anticipated 50% over the next four years to hit $300 billion by 2025, which would represent more than three-quarters of all media spending. It is reasonable to anticipate that a significant portion of this spend will continue to occur within the walled garden platforms.

Where Does This Leave the Open Web?

For many of the same privacy and data reasons mentioned above, legacy targeting options across the open web are increasingly outdated and problematic, especially as it pertains to targeting the nuances of video content.

• Keywords and semantics are commonly used tools, but miss a lot of context and are often inaccurate when it comes to dynamic video and audio. With brand safety approaches that aim to block certain content, again, keywords can miss the mark and over block a lot of innocuous content that limits scale and reach, results in unintentional biases, and drives up costs.

On the publisher side, internet and digital media properties across entertainment, news, and more have scrambled to keep pace via a wave of recent mergers and acquisitions in an effort to build up and compete on scale and in ad dollars that Google and Facebook command.

• Many of these same publishers are also looking for ways to create more walled garden-like structures and leverage their existing first-party data to position themselves as more secure, while preparing for any future regulatory changes.

What’s Next for Marketers and the Walled Gardens

Walled gardens offer significant upside for users and advertisers when it comes to privacy, safety, reliability, reach, and scale —but the downside is that brand’s give up some transparency and control in the process.

• The closed ecosystem structure requires advertisers are mostly dependent on the platform’s own technology and tools from within the walls, so things like measurement, interpretation, and insights around ad performance are also monopolized by the platform — effectively a ‘grading their own homework’ set-up.
• Advertisers have less third-party options than the open web to independently audit and compare across other media investments; the exchange is less transparent and walled gardens are less accountable.
• A 2021 research study found that 49% of surveyed advertisers reported “lack of data from Walled gardens” as the second biggest roadblock to achieving better transparency.
• Other research reveals marketers’ concerns around a lack of transparency and measurement attribution on walled garden platforms like Facebook, YouTube, and Instagram could affect their future media spending.

With ongoing conversations around brand safety and suitability, responsible media investment, and marketers’ priorities around diversity, equity, and inclusion — it is not just ad performance and attribution measurement that matter, but also ad adjacency and content alignment measurement that will be of growing importance to brand’s, agencies, and these platforms moving forward.

So the industry is at a turning point, poised for new and innovative, independent solutions to ensure that the walled gardens don’t go unchecked.

Enter Zefr

Zefr is the leading technology provider offering sophisticated and independent targeting and measurement solutions to help brands navigate and strategize across their walled garden investments.

Starting with the release of the first brand safety and suitability product for complex environments including TikTok — the first of its kind solution for content-level, post-campaign measurement on the platform — Zefr is leading the industry in this new era of measurement for walled gardens.

Zefr’s tech stack was built specifically for the video environments, backed by a machine learning engine that goes far beyond just text and creator analysis, combining audio, text, and video-level analysis with scaled human review and moderation, all specifically mapped to the GARM industry standards — compared to traditional open web approaches like semantics and keywords for video that come up short.

So as marketers learn to adapt, tackle changes in the industry, and continue to shift towards the walled gardens, Zefr’s solutions offer independent, precise measurement built to understand context critical for brands to feel confident about their media investments.

Reach out and learn more about Zefr’s targeting and measurement solutions for walled gardens today.