As walled gardens grow, the open web closes ranks

There’s an assumption in ad tech that while the walled gardens of Facebook, Google and Amazon have cashed in on as much as 61 percent of total US digital ad spend, the rest of the industry has been left squabbling over table scraps. It is a mischaracterization to categorize the roughly 38 percent of hundreds of billions of digital ad spend that remains as crumbs. In fact, these dollars have propelled continuous, significant growth across the landscape year over year.

That new competition drives innovation in the market as smaller ad tech players refine their data sets, technology and solutions. Admittedly, most will never amass similar proprietary identity truth sets as the duopoly, but that’s not to count out their data coverage, scale and technology, especially as they now move to close ranks.

That’s right – instead of duking it out, smaller ad tech players are uniting. Merger and acquisition activity, industry consortiums, collaborative product initiatives and other movement poises ad tech underdogs to take on the walled gardens with differentiated, valuable opportunities that advertisers are itching for.

According to Adobe’s 2019 Digital Trends report, more than 40 percent of advertising agency respondents named the walled duopoly as their clients’ biggest headache alongside a roughly tantamount challenge of integrating data across channels. It can’t be ignored that these two challenges are intensely contingent. As advertiser frustration mounts, cooperation in the open web that can improve omnichannel data activation grows more relevant. 

Mission: Control

Despite the scale and ease that walled gardens can offer, advertisers too often feel they have few alternatives but to sacrifice data control and transparency. One of the biggest impacts to this willing forfeiture will be state-led initiatives like the California Consumer Privacy Act which goes into effect on January 1, 2020, and the federal regulation that looms. As missteps like storing personal data without consent and security lapses are widely publicized, expect brands to be less likely to accept opaque practices as a natural price of doing business.

Brands are already making big moves to show they’re serious about increased data control; they’ve reduced spend, avoided big platforms altogether and even built out their own data and tech to bring to market. Regulation will simply be the most recent spark in a fire of meaningful change.

Winning on more than a tech-nicality

As smaller ad tech players improve and band together, their greatest asset is not how they compete directly with walled gardens, but their differentiated assets.

Working with many industry-leading platforms, I’ve seen firsthand the technology that’s increasingly capable of more data transparency. Finding other ways to secure their dominium, these platforms strive to establish, maintain and share consistent data governance practices.

Data providers and platforms are also sharing more details about the data and advanced modeling techniques behind their audience creation process. In addition, their nimble structures allow for increased solution customization and control compared to the standardized walled gardens.

Don’t change that omnichannel

Ultimately, over-reliance on walled gardens is a missed opportunity to integrate data in a way that can capture a persistent identity across channels, devices and content to create a unified experience for the consumer. By uniting, smaller ad tech players help to improve one of ad tech’s biggest challenges that walled gardens significantly contribute to, rather than help solve: fragmentation. As data and technology providers team up, there’s an omnichannel pathway to active data, gather insights and measure performance to drive smarter campaigns holistically, regardless of platform, channel or device.

Advertising success should not only be measured by clicks, engagements and CPAs on siloed channels. Performance should be evaluated comprehensively across the consumer journey on the requisite of data transparency, governance, control and accessibility. With the current power that walled gardens have, they have no reason to change their ways. But because smaller platforms have something to fight for, they have more motivation to develop integrated solutions that are built to champion, not sacrifice, advertisers’ objectives.