The Trials And Rewards Of Navigating Walled Gardens

Media investment teams have been grappling with Facebook, Google and other formidable walled-garden platforms in the digital arena for some years now. But while familiarity and experience have made this easier in some respects, challenges and frustrations continue. And now, increasingly, walled gardens are also a reality in the television environment.

Refusing to buy in these channels is hardly a realistic or wise option, given today’s overriding mandate for a consumer-led, audience-based strategic approach, agreed executives on a MediaPost television panel led by Evan Barocas, director of display advertising for PointIt.

What do agencies view as walled gardens’ biggest trials and rewards? How are they trying to work to best advantage with these types of platforms?

“We buy actively across all screens, and with walled gardens going up and creating verticals, it’s becoming very challenging,” said Michael Piner, SVP strategic investment Magna Global. “I think we have no choice but to try to work within those walled gardens as best we can, and connect them, as we simultaneously try to break them down through the business side.



“We’re focusing on [the latter] through partnerships,” he explained. “We view it as very important to bring the audience-based approach and programmatic into the television upfront conversations, and we’ve already started doing that. I think that introducing programmatic into those conversations will cause buying to evolve differently, because [programmatic] has to be purchased in a very different way [than traditional television]. You can’t just hand it over and say, ‘Here’s your inventory for the year.’ It has to be executed in a different way. And while we need flexibility, we’re going to have to find new ways to source inventory to buy in this new way.”

Data: A Lure And A Frustration

For media buyers, data is both the lure and the biggest frustration of walled gardens. “One of our opportunities is to use data to strategic advantage for our clients,” said Keith Johnson, EVP strategic data solutions at Wunderman. “We always want to have an asymmetrical advantage — meaning having more data and intelligence than our competitors. So do walled gardens create opportunity? Absolutely. But it’s very costly one.”

Lack of access to the data generated through campaigns, particularly in Facebook and other key social and online walled gardens is, of course, also a core challenge for agencies.

“We take an audience-first-based approach to how we buy media across all channels, and we do buy media within those walled gardens,” said Johnson. “The problem is getting data back out.”

“Facebook takes in a lot of data but they don’t let a lot out, in part because they’re not totally comfortable with how it’s used,” concurred Carly Costantino, media director at Razorfish.

Gardens Further Complicate Measurement

Then there’s the measurement challenge.

Planners striving to be consumer-centric are thwarted to some degree because walled gardens’ different measurement, tracking and reporting methods can’t necessarily be integrated into the holistic measurement scheme for the client or campaign.

“Walled gardens are sort of in their own worlds in these respects, so you do have to take them with a grain of salt, and view them directionally, to some extent,” observed Constantino.

All three agreed that sales impact is now the ultimate KPI, and that walled gardens are another contributor to the complexity and difficulty of holistic, cross-media and cross-device measurement.

“For our clients, the measurement of success is sales, so brand loyalty and brand lift have to translate to dollars and what was sold,” said Johnson. “No matter what we do, we try to measure it back to sales.”

Agencies and their clients “need better access [from the platforms or inventory providers] to the intelligence around who actually viewed the ad or show, whether that’s a physical address or something else that can tie back to actual results in the marketplace,” he stressed.

Bringing the sales-results-driven mentality to television is “incredibly powerful,” agreed Piner. At the same time, he said, it’s also critical that investment teams accustomed to working in linear television’s KPIs of reach, frequency and awareness are educated about audience-based buying and how they can adopt more targeted metrics. “Education is key in getting them to move those linear TV dollars over [to data-enhanced television buys],” Piner said.

In some ways, traditional television’s greatest strength lies in standardization, he noted: “Everything is standardized, from the GRP to the 30-second spot to timing to when you get post reports. So while we’ve all agreed that these dollars should come from linear TV dollars, these teams need to be educated and understand the different metrics that can be applied. This needs to be, in a sense, standardized so that it’s easy for them, and for clients that have purchased television for a long time, to understand. I think that will make the dollars shift more quickly. And once the dollars are moved, then we can explore different avenues and various metrics.”

“It’s really important to know the role of the channel and its influence on your consumer,” added Constantino. “Ultimately everyone wants to drive sales, and you must have business objectives, but having distinct KPIs [for specific media] is also really important. Big-screen TV isn’t going away, because clients need to be able to reach their audiences in a massive way. But as you go through the consumer journey and different touchpoints, you need distinct KPIs relating to reaching and influencing them in specific ways — from driving awareness to driving consideration to getting them to engage with your brand and take an action, all the way down to making a sale.”

Optimizing exclusively from a CPA or revenue goal — planning and judging campaigns based only on cost per acquisition — tends to preclude potentially valuable elements and approaches, like expensive video executions, Constantino pointed out.

It’s important to understand that more brand-oriented efforts can yield crucial halo effects, like “softening the marketplace, and changing their mindset,” and that “you can pay a certain price for that,” she emphasized. “Obviously, as you move down the funnel, your acquisitions will become more efficient.”

In addition, companies need to understand that the data that enables greater targeting within the expanding universe of addressable is expensive, and they’ll pay more for that targeting. “You need to understand the value of that and what are you willing to risk in order to learn,” she said. “New spaces are evolving every day, and as we get more fragmented, we need to test and learn to create our new roadmaps.”

Overall, “the more granular you get, and the more screens, and the more apps and browsers in television and now mobile, the more complex the measurement needs and the more challenges there are to achieving a holistic solution,” she summed up.

Need For Combined Data Sources

Do inventory providers or media buyers know more about audiences?

Fragmentation and the differing profiles of consumers based on their media usage are exactly what’s driving the need to use a combination of first-party data from brands and from publishers, along with cross-media consumer data gathered by agencies, Constantino pointed out.  

“It’s not that one data source is better; it’s understanding what influences various consumer segments in order to achieve a holistic understanding of the audience,” she said. “Everything combined yields the richest profile.”

“It depends on the publisher and the media channel,” said Piner. “In linear TV right now, it seems that the agencies and trading desks have a bit of the upper hand in understanding the value of the inventory. But [inventory providers] are rapidly gaining ground and understanding, and we’re seeing that in the walled gardens and new data products being introduced.

“We already have it with Dish and DirectTV,” he continued. “They’re trying to move more of the inventory that they used to just bundle into different buckets and sell towards addressable, because they can monetize addressable better. Now we’re seeing the linear TV networks, including Viacom, Turner and NBCU, roll out these data products and put up these walled gardens, while they’re trying to understand their audiences. They’re all asking us to come to the party, and allow them to understand who we want to reach. That’s great, but there’s obviously some concern with privacy. And then you have opposing forces.”

The “opposing forces” come down to this, he said: Buyers and television inventory providers “are trying to use audience-based and programmatic buying for two different reasons, and they’re at odds with each other. On the agency side, we’re trying to use these to unlock undervalued inventory that we can purchase cheaply and be more targeted and effective for our clients. On the TV side, they’re trying to do the exact opposite. They’re trying to understand all these data sets and how valuable they are so that they can charge more. They feel they have to put up the walled gardens so that they can have control over the inventory and pricing.”

Still, Piner said, “I’m an optimist, and I think that collaboration is the only way that this gets resolved. Between these two spreadsheets going in the opposite directions — one that wants to see CPMs to go up and one that wants to see them go down — I think there’s a middle ground that we have to find that will deliver results for all parties.”

1 comment about "The Trials And Rewards Of Navigating Walled Gardens".
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  1. Robert Dahill from GaleForce Digital, January 7, 2017 at 11:48 a.m.

    This is a terrific article.  It touches on many of the elements that go into the decision process while giving the reader a better understanding of the challenges the agenies and the clients face in executing an integrated i.e. linear and digital campaign that drives sales -- which is the ultimate goal.      

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