Giants like Google and Facebook have a monopoly on data, something that will only change if advertisers call them on it, the way Kellogg’s and Kraft Foods have.
Last year, Google claimed a full 30 percent of global net ad revenue, a figure equivalent to $51.81 billion. Even without search, Facebook brought in another 9.6 percent of global digital ad revenues. These staggering numbers make the scale and reach of these giants unbelievably vast – and very, very valuable to advertisers.
Up until now, Facebook, Google, Apple, Amazon and others have been self-reporting on what is performing best in their own environments, with little to no independent data backing up performance metrics. But due to the fact that virtually every decision in advertising today is born from or influenced in some way by data, marketers are starting to push back on closed ecosystems and demand their own copy of the keys.
The exponential growth and increase in revenue of walled gardens in recent years has resulted in limited impression-level sets, a lack of transparency and a restricted understanding of customer behaviors across channels, to the chagrin of many advertisers.
The fluidity of tech giants
This situation is compounded by the fact that the advertising industry is built on a foundation of interdependency: 75 percent of Google mobile search ad revenue happens to come from Apple devices. Google search users navigate to Facebook via their Android phones, and then seamlessly transition into shopping via their Amazon apps. Walled gardens are pushing siloes onto advertisers when in reality, consumer experiences have become more fluid and integrated than ever before.
The justification provided by walled gardens with regards to keeping user data trapped within each ecosystem is that they must preserve user privacy. Industry cynics argue that this is an invalid claim, given that other solutions manage to share data in a safe way.
What is apparent, however, is that walled gardens behave as they do because there is a strong financial incentive behind gating up a goldmine. Providing cross-channel-reach data would diminish the value of what they keep locked up.
It may seem to marketers that given all of the millennials who have stopped watching TV, the millions of Americans using ad blockers, and a proliferation of technology-addicted teens who spend goodness knows how many hours per day on Snapchat or Facebook, there are scant options left besides walled gardens. But big brands have the clout to fight back, and many are already throwing their gloves in the ring.
The conflict between brands and walled gardens came to a head last year when Kellogg’s very publicly challenged – and ultimately dropped – Google due to a lack of openness on its properties. Kraft Foods followed suit and pulled its budget from sites which did not allow third-party measurement.
GlaxoSmithKline and Nestlé were also vocal about how they perceived themselves as being backed into a corner by some of the biggest online media buyers. Both companies stated that they would not become programmatic-only digital media buyers until walled gardens were toppled.
When advertisers strike back
Take the case of the now-defunct iAd service, Apple’s mobile ad platform, which was shut down after just six short years of operation. By operating within an Apple-only walled garden, advertisers and publishers were only able to reach iOS users. Sure, iPhone adoption is high in the U.S., but iPhone, iPad or iPod Touch usage accounts for only 14 percent of the worldwide smartphone market.
The demise of iAd suggests that marketers do retain influence capable of driving significant industry change forward. If advertising behemoths such as Procter & Gamble and Unilever, both of whom own popular brand portfolios and advertise extensively on YouTube, were to follow in the footsteps of Kraft and Kellogg’s, Google might find itself reconsidering its data and reporting policies.
Some industry voices would argue that these changes are already happening, with new alternatives in the marketplace forcing us closer and closer to a final tipping point for walled gardens. Adobe’s new Device Co-Op promised to democratize the collective power of connected devices. AOL and Taboola have joined forces to take on Facebook’s walled garden.
Facebook itself has begun lowering some of its walls by embracing third-party tags and widening its support of third-party viewability trackers. Could combined pressure from the industry eventually force these walled gardens to break down their walls altogether?
Ultimately, such a dramatic ending is unlikely. Instead, walls will likely lower in stages over time, a shift instigated by major advertisers fighting back and raising a public outcry. But more than just advertisers, stakeholders will have to get involved.
Agencies have a role to play in championing greater awareness of transparency and accountability. Publishers also need to step up and voice their discontent. If not, they risk being displaced from the consumer’s value chain within walled gardens, where publisher content is being commoditized daily.
And advertiser-aligned, 100 percent independent programmatic marketing and analytics companies need to back their advertiser and agency customers and help them obtain the data they need to deliver success.
It’s time for true inter-industry collaboration between all parties to establish the critical links between platforms, channels and data sets that advertisers need in order to be able to accurately analyze campaign results and measure marketing ROI. It’s time to ask for a copy of the keys to the garden.
Merrily McGugan is director of corporate marketing at DataXu.
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