Are Walled Gardens Harming Opportunities For Brands?

This past August, Google announced that it was limiting access to YouTube inventory only to DoubleClick Bid Manager--preventing third-party DSPs from bidding on YouTube video ads--on the heels of limiting how third-party DMPs can extract audience or performance data on Google properties. 

In Q3, Facebook began pitching its own DSP to agency partners in preparation for a 2016 launch – It has always tightly controlled how their data is used.  As a result of Verizon’s acquisition of AOL, Verizon’s new privacy policy was updated this October. It foretells a more controlled, protected environment for leveraging audience data outside of the company’s platform. 

China’s BAT (Baidu, Alibaba, and Tencent) all protect publisher-gleaned audience data to compel brands to spend directly on their platforms.  The writing is on the wall: Large industry players clearly believe in walled gardens around data and controlling how it can be activated within ad supported content.



There are good business reasons for these digital powerhouses to implement a protectionist strategy.  If they control access to audiences and the data to best target them, they can control the spend. 

The question is not whether this is good for these key media owners, it’s whether this is good for the ecosystem at large, particularly for the group affected most by this closed data system: brands.

Evolution of Brands’ Data Ownership

Over the last three years, brands have placed great efforts to get their data “house” in order.  This evolution in brand management led to an M&A feeding frenzy that saw BlueKai and X+1 sell for more than half a billion dollars between them. 

Brands have taken strides in integrating their first-party CRM data and performance data from their ad servers and DSPs, to create a match table designed to empower and boost their audience understanding and marketing impact. 

This development has driven many brands to take ownership of their ad technology procurement, including ad servers and DSPs. In some cases, it fueled the development of in-house capabilities to manage ad operations and media trading.

Impact on the Ecosystem

The adoption of greater data mining by brands and the agencies that support them has enhanced the momentum of programmatic--primarily in RTB--as media traders can leverage inside knowledge of audiences to buy more effectively across publishers and channels across the industry. 

However, the developments of greater limitations around what can be bought in the open market and who owns the audience data that’s created as a result of ad interaction, impacts how brands think about programmatic. 

The open framework of RTB has democratized digital advertising, enabling advanced brands and agencies to leverage their knowledge to create an advantage in the marketplace using data.

It’s easy to see why protectionist strategy interrupts the open flow of data that these brands and agencies depend on, and why it is potentially damaging to the health of the market. 

Mobile Adding Complexity 

Mobile user identification will create even more complexity and protectionism across the industry.  Verizon, AT&T and Sprint, the largest U.S. telcos, are making user data available in certain cases, but shrouding that data so they limit what brands can do with device IDs. 

Companies like TapAd, Screen6, Drawbridge, etc. have built fast growing businesses by building profiles of Device IDs to help brands and ad tech companies better target on mobile.  However, one thing that the walled gardens have in common — an abundance of deterministic log data.

While limiting in scale, it is highly accurate.  

Not being able to identify and target these users across all media channels is limiting for brands and for any media owner not among the digital leaders in the space.

Brands need to determine whether these walled-garden policies will continue or speak with their wallets and push back on a more open environment with enhanced data portability.

Meantime, these developments appear to have strengthened brands’ resolve to onboard impartial third parties to judge the effectiveness of their campaigns.

This would infer they are playing the ‘long game’ and expect things will ‘change.’ For that to happen, brands and media sellers need to reach a consensus on what is being bought and sold. Is it the media or the data?  

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