If you’re an old-timer like me, or a new-timer who knows something about digital media’s past, then you’ve probably noticed an old-timey phrase making comeback: “walled gardens.”
It’s not as if the term ever really went away, but walled gardens took a back seat during the open Internet’s expansionary period, and even the more recent mobile and app economies that have gotten us into the hyper-fragmented -- make that atomized -- media mess we are currently in. Which is most likely the reason why walled gardens are back again. Because in a sea of endless open marketplace possibilities, walled gardens represent a simple, organizing principle for constraining them. They also represent tremendous market power for those who can actually operate them. So, it’s not surprising that everyone wants to be one.
The two biggest walled gardeners, of course, are Google and Facebook, but their approach to cordoning off the marketplace is different than the walled gardens of old. Instead of doing by acquiring “subscribers” to media access and/or content, they are doing it by acquiring people’s data. Specifically, the most persistent IDs that brands and agencies can use to identify and target ads to a universe of users.
Google and Facebook obtained this precious market power via an ingenious method: by offering their users the ability to log into other sites, apps and media experiences by signing into their universal log-in. It worked, because faced with the growing complexity of media log-ins, a critical mass of users have essentially traded their ability to be tracked and targeted for the convenience of not having to log-in over and over and over again.
It’s hard to say how much of the marketplace of people’s IDs Google and Facebook now control, or how persistent or unduplicated they actually are. But they have clearly attained the status of organizing principles for brands, agencies, trading desks and others who want to make the world of targeting consumers somewhat manageable. It’s working, because faced with the growing complexity of tracking and identifying users, Google and Facebook represent a simple way of organizing it.
I’m not going to suggest how much either side -- consumers or brands -- have traded off for simplicity, but the impact on media marketplace dominance is clear. As one knowledgeable industry source said to me recently, “When it comes to persistent user IDs, there is Google, there is Facebook, and there is everyone else.”
It’s the “everyone else” part that interests me most, because in the past several weeks, I’ve heard a number of sources pitch me on how they are -- or are planning to be -- their own walled gardens, cordoning off consumer identities in a way that constrains the marketplace of targeting possibilities, makes it simpler and more manageable, and perhaps most importantly, more effective.
The most interesting pitches I’ve heard recently have come from entities representing the “demand-side,” and just yesterday I had lunch with one of them and hope to report on their news, and exactly how they are building this solution, soon. But the best case I heard for a demand-side walled garden approach to user data was from Brian Lesser, the global CEO of WPP’s Xaxis unit. During an in-depth Q&A with Lesser that I hope to publish in this week’s MediaPost Weekend edition, he explained that the real power of Xaxis isn’t in its bidding technology, but in its ability to identify the most valuable users via a massive user database it has amassed. Xaxis doesn’t use the same user-generated universal log-in that have given Google and Facebook such dominance, but it claims its science for segmenting users that are most relevant to brands is better, because it accrues and manages its user IDs in ways brands want to think about them.
You can read more about how Xaxis is developing its walled garden approach when we publish the complete interview with Lesser, but he says Xaxis is developing this approach explicitly to be an alternative to Google’s and Facebook’s walled gardens. It’s the same reason other green thumbs tell me they are developing walled garden approaches of their own -- because they want to be gatekeepers too.
So watch how walled gardens continue to gain prominence, supplanting the role of simple DMPs, DSPs, or even exchanges. The new battle for media market share isn’t going to be about data or impressions. It’s going to be over who owns the most representative and persistent ID for the users brands want to reach.
But there is another type of gardener I’d like to close this blog post with, because I hope you think long and hard -- and ideally comment on -- the role they beginning and are likely to continue to play: you know, consumers themselves.Of all the stories we’ve covered recently, I think the industry’s seeming shock and backlash to the rise of ad blockers -- triggered by Apple’s release of iOS9 -- surprised me. It surprised me because it was the first time I think some industry stakeholders realized just how much control consumers were beginning to take of their own media marketplaces. That they could, in effect, begin to wall off their own garden.