Breaking down ad-tech walled gardens and their impact on digital advertising

Let's explore the concept of ad-tech walled gardens and their impact on digital advertising. The term "walled garden" refers to a closed-system platform that retains customer data inside its digital ecosystem. These advertising ecosystems are usually controlled entirely by a single company. The goal is to keep user data within the company's ecosystem so that other companies cannot access it.

Meta, Google, Amazon, X, TikTok, Pinterest, and Snapchat all have walled-garden data systems. The purpose is to maintain a competitive advantage - of course, Google doesn't want Meta to have its data. But these walled gardens present a challenge for advertisers because all their data is siloed by platform. That's why many advertisers opt to use a data unification platform like Marin Connect to unify data across platforms. Marin pulls data via API from every major ad platform so that advertisers can analyze all their data in one place and implement cross-channel advertising strategies.

How did walled gardens start?

The phase-out of third-party cookies started in 2018 and blocked some of the access advertisers had to third-party data. While this change was great for data privacy, it forced each ad platform to call upon its first-party data for ad targeting-data the platforms most certainly did not want to share with one another.

Here's a little recap of the different data classifications:

• First-party data: This data is collected directly by the organization.
• Second-party data: This is data collected and shared by a trusted source.
• Third-party data: This type of data is aggregated from multiple second-party sources.

‍

The role of GDPR in ad-tech walled gardens

The General Data Protection Regulation (GDPR) is comprehensive data protection legislation implemented by the European Union in 2018. It aims to protect citizens' data by enforcing strict data collection, storage, and usage guidelines. Its main benefit is granting individuals greater control over their data, including the right to access, correct, and delete information held by companies.

GDPR negatively impacted the use of third-party cookies, and according to some studies, it even reduces revenue. Advertisers use third-party cookies to track users across different websites. Under the GDPR, companies must obtain explicit user consent before placing these cookies, leading to widespread changes in digital advertising operations. As a result, many organizations have shifted towards first-party data collection methods, relying on data gathered directly from their websites and apps. This shift contributed to the rise of "walled gardens," where large platforms like Google and Facebook create closed ecosystems that control access to user data and advertising.

Beyond the GDPR, other privacy acts, such as the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA), further strengthened user privacy rights. These laws provide similar protections, giving consumers more control over their data and imposing stricter regulations on businesses regarding data handling and transparency.

How do walled gardens affect attribution?

By preventing marketers from tracking and correlating data across platforms, walled gardens impede informed decision-making in several ways:

• Limited measurement: Walled gardens make it more difficult for advertisers to track the success of campaigns across multiple channels and understand the real impact of different advertising efforts, resulting in attribution problems. ‍
• Journey fragmentation: Because each walled garden operates within its own ecosystem, it's harder for marketers to track conversions throughout the user journey. ‍
• Data accessibility: Limited access to user data within walled gardens hinders the ability to analyze data at a granular level.

Here's a break down of the pros and cons of walled gardens for a few of the major ad platforms:

Marin has developed a powerful suite of solutions to make the most of digital advertising. The first tier of the suite, Marin Connect offers a new way to collect, unify, and analyze marketing data. The AI-powered solution offers cross-channel reporting, a unified data model, and powerful analytics.

Interested in optimizing your data collection and analysis? Discover what the power of Marin's AI can do for your marketing by requesting a demo.

Public link

Please use the above public link if you want to share this noodl on another website.