Let's Give Walled Gardens The Name They Deserve: Roach Motels

Jay Stocki

"The Sell Sider" is a column written by the sell side of the digital media community.

Today's column is written by Jay Stocki, the data practice lead at Prohaska Consulting.

When consumer data goes into a walled garden, it never comes out. Ad dollars go in, but the true measurement of the results never come out. These are not walled gardens. A better metaphor for this closed ecosystem is a roach motel. 

The same tagline originally used in Black Flag Roach Motel’s 1978 commercial holds true: These platforms let plenty of things in – they just never let anything check out! 

We must evade the trap before it gets too sticky

Data traps will get even stickier once cookies and device IDs go away. If every iPhone user opts out of Apple’s IDFA, the only true data set on user preferences would be controlled by Apple. With third-party cookies being deprecated in Chrome, the winners of the new world will be those with the largest first-party data sets. 

This issue goes beyond the competitive dynamics of the advertising industry. As a society, we need to decide if we’re ready to accept that just a few conglomerates control the lion’s share of the digital advertising economy. They are becoming the Roach Hotel California: “You can check out any time you like, but you can never leave.” 

On that ominous note, do we want to continue to allow a few digital media players to control the content consumed by the vast majority of users? Now is the time to spring the trap.

We must avoid the ‘easy button’ of the walled gardens

Having worked in the industry since the dawn of digital media (…walking barefoot in the snow, eight miles uphill), us old timers understand the challenges of delivering the right message to the right user at the right time. Working with the walled gardens makes this process easier, but not necessarily better.

The Google, Apple, Amazon, and Facebook (GAAF) behemoth offers incredible scale and reach. The GAAF also benefits from cross-device visibility, since their users are logged in across all their devices around the clock. The temptation to steer more marketing dollars into these platforms is enticing, but the trap must be resisted.

We must understand the right path is rarely easy

One of the axioms I preach to my kids is, “When faced with two choices, you should usually choose the one that requires more work”. Pouring more money into the GAAF ecosystem is easier. But it creates larger data gaps between the open web and the data roach motels. 

The inside of the roach motel is dark: The lack of transparency and the inability to measure across platforms should be enough to give advertisers to take pause about funneling more money towards the GAAF. 

The GAAF has been allowed to grade their own homework while continuing to amass a first-party data assets unlike anything we have ever seen in history. Continuing to fill their roach motels with data only weakens the competitive position of every other publisher on the planet.

We must correct the imbalance

The disparity between advertising spend and user time spent online is a frightening indicator of the severity of the imbalance between the GAAF and the open web. According to a 2020 Harris Poll, users spent 66% of their time online on the open web vs. 34% on the walled gardens. Unfortunately for shareholders outside the gardens, the open web only accounts for 40% of total ad spend whereas 60% is spent in the walled gardens. The ad spend rift is only getting larger. 

To put it in absolute terms, the imbalance in advertising spend is growing by more than $1 billion each year (Jounce study). The pandemic has exacerbated this asymmetry. Despite the frequent brand-unsafe content and “errors” committed grading their own homework on video measurement and KPIs, the walled gardens are capturing the advertising dollars scurrying away from the open web ecosystem.

Open web publishers and marketers: We need to come together

Publishers: It’s time to act. Develop strong relationships with your users. As part of this relationship building, publishers need to improve their first-party data assets with their consumers' permission. They then need to use insights from their data and relationships with their users to create better solutions for advertisers.

Marketers: Don’t just hit the easy button and pour more money into the walled gardens. The walled gardens have a place in your media plan – but they cannot be your only solution. 

Stop thinking of your potential customers as hapless roaches being lured to slaughter. Continually test new publisher channels, improve your own data gathering techniques and create broader relationships throughout the open web ecosystem.

Ad tech providers: Now is the time to rally around open standards and put pressure on the roach motels.

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