You give, they take is the glib response. Elliott Clayton supplies a more nuanced view, but is clear on the need for a more equitable value exchange.

According to the Competition and Markets Authority, 80% of all UK digital ad spend goes to Google and Facebook. Extrapolating, that means advertisers assume consumers spend 80% of their time exclusively on those two platforms. Is the remaining 20% really supposed to represent the rest of the internet?

Spend more, get less

The walled gardens conversation is an ongoing issue of more and less. Marketers are spending more on these closed ecosystem “walled garden” platforms, whose prices keep rising as the non-walled garden share of real-time bidding decreases. At the same time, brands are getting less – compared to display advertising outside of walled gardens—on these platforms; a trend which is set to continue.

Furthermore, with Google’s announcement that it will phase out third-party cookies by 2022, it’s clear that those walls, which keep so much of the data inside, are about to get even higher.

Advertising spend on the web overall is increasing too. According to the Internet Advertising Bureau (IAB UK), internet advertising revenues in the UK surpassed £15 billion in 2019, a 15% year-on-year increase.

While the COVID-19 pandemic has had an unprecedented impact on ad revenues – the total extent of which remains to be seen – it doesn’t change the fact that walled gardens continue to take an inordinately large percentage of the spend. That fact, coupled with a lack of transparency on how the campaign performs, is hard to stomach.

As marketers spend more on these platforms, they understand less about their customers because walled garden campaigns and interactions can’t be tied back to the brand’s CRM database. Brands typically receive an aggregate view of how their campaign performed rather than an individualised view that provides clarity into the campaign’s performance. This leaves a brand with an incomplete view of its own customers and how they have interacted with them across platforms. Marketers identified extracting audience insights from walled gardens as their greatest challenge when it comes to identity, according to an August 2018 study by Winterberry Group. Yet marketers continue to spend more and get less, trusting walled gardens to do the right thing.

Trust is not enough. CMOs are under more pressure than ever to provide data-driven results. They are having to change not just how they market, but also how they talk about marketing impact. In turn, this requires marketers to understand and assess their spend on walled garden platforms – but is that even possible?

The incongruous nature of walled gardens

In some ways, a walled garden provides an alternative to the cookie-less future that so concerns advertisers and marketers. Walled gardens are built on a foundation of logged-in users, which allows them to track each person across devices. Third-party cookies aren’t needed when you’re on a first-party platform. While the walled gardens know a lot about the users in their logged-in environment, they – by necessity – can’t share their data with advertisers without running into privacy concerns. Facebook, for instance, lets advertisers run targeted campaigns, but doesn’t share information about where the ads appear, as evidenced by the organised boycott of Facebook by some of the world’s largest advertisers in July this year. And unless a user clicks on the ad campaign, the advertiser doesn’t know who actually viewed the ad.

In a world where marketers have the potential to make every consumer interaction hyper-relevant, brands – and their respective marketing partners – have to assess consumer mindset, motivation and need state in milliseconds, and then tailor each message individually to reflect that in real time.

The fact that walled gardens don’t allow this level of granular control and visibility results in a power imbalance where marketers can and should demand approaches that offer more performance, transparency and pinpointed data than they can get from walled gardens alone. These approaches should include an understanding of which parts of the programme are under- or over-performing – and what you’re really paying for.

Walled gardens vs. the open internet

In 2019, it was reported that the average global internet user spent 2 hours and 23 minutes online each day, with Facebook taking up 58 minutes – less than half – of this. However, non-walled garden sites only receive about 20% of digital ad budgets. There is certainly a place for spending with the walled gardens, but they can’t be a brand’s only solution.

The larger problem is putting all of your eggs in one basket. An over-reliance on one walled garden, or a few of them, is ultimately a disservice to your brand. People do spend time in walled gardens, so it makes sense to advertise there. But there’s never going to be a time when the only way someone is consuming media is within a walled garden.

So how do marketers balance their spend with walled gardens versus the open internet? In the wake of Google’s announcement on phasing out third-party cookies, any real answer to that question becomes more problematic the closer we get to 2022 – the intended deprecation date for Chrome. The key problem here is that the vast majority of open internet advertising is based on the third-party cookie.

With Google removing that mechanism, many brands will seemingly need to play more in Google’s sandbox as the only option. And many in the non-walled gardens sector of the digital media industry were already struggling.

The majority of the adtech industry is not equipped to handle a cookie-less world. If a more equitable advertising ecosystem – one that matches where consumers spend their time and attention – is the goal, the question becomes: how must the industry pivot to meet it?

Moving toward a mutual value exchange, for everyone

Effective marketing starts with knowing your customer. That means knowing each customer and each prospect across their various digital and in-store contexts, devices, and channels – and building relationships. This is no simple task, but it becomes even more complex when looking at advertising within and outside of walled gardens.

Today, advertisers are spending a significant portion of their advertising budgets within walled gardens, but data isn’t portable outside of each platform. A marketer cannot take what they learned with a Google Display Network campaign, for example, and apply it to Facebook ads, publisher media buys or outbound email campaigns. This forces brands to make cross-platform decisions blindly – never knowing the true customer journey.

A more equitable value exchange needs to be more about standardising taxonomy and identifiers across all of these platforms to see and understand the customer journey.

What a solid approach boils down to is a simple equation for modern marketing: identity plus context equals intention. If walled gardens understood that this equation is the best way forward for their customers, would they start to evolve organically?

Clearly, ad spending can and should flow towards where prospects and audiences gather – and that is often walled gardens. But when they don’t offer the ability to measure campaigns effectively, then they run the risk of being overpriced and not representing the best interests of those paying for them.

This runs against a key mantra of the advertising ecosystem: be efficient. When it’s not transparent, it can’t be efficient, because you can’t make informed decisions – which means that it can’t evolve – and that’s a great loss for everyone.