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Why the walled garden strategy needs to change

Bynewsmagzines

May 21, 2023
Why the walled garden strategy needs to change


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It’s universally understood that data plays a crucial role in the overall success of a business’s marketing initiatives and sales goals. This begs the question: Why are we still playing by the rules of giant media conglomerates that aren’t willing to give advertisers and publishers access and control of their own customer data?

The time has come to disrupt the status quo of walled gardens and truly lean into empowering consumer ownership of their identity, providing real tools for data controls and enabling partnerships that redefine advertiser-publisher engagement with tech giants.

The give-and-take of walled gardens

With 87% of consumers starting their buying journey online, establishing a digital presence remains mission-critical for modern marketers. When was the last time you trusted a consumer business without a website, Yelp! page or social media presence? (Authors note: Your favorite speakeasy or neighborhood watering hole gets a hall pass here.)

To this point, last year, Google, Facebook and Amazon accounted for approximately 64% of U.S. digital ad spending. This dominant market share is indicative of their tremendous inventory of first-party user data. It’s not hard to understand why these giants have successfully maintained authority over the past several years. Although utilizing these platforms has its perks, there are significant sacrifices from the consumer, advertiser and publisher standpoints.

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Since these closed platforms own their audiences and take control of any data uploaded into their system, advertisers and publishers don’t receive the benefits of valuable bi-directional information flow, and consumers suffer. Without feedback data and the ability to port data, it can be incredibly difficult to gauge the effectiveness of your campaign and understand if you’re reaching the right people at the right time for the right costs.

Demand for more personalized marketing

These restrictions can negatively disrupt the customer experience. When cross-platform data transfer is impeded, tracking customer journeys becomes nearly impossible. This means knowing exactly who your customer is, what to say to them and how to respect both their privacy and shopping preferences has become increasingly difficult, all while the consumer expects it more than ever before.

On top of consumers’ demand for more personalized marketing, we are now at the forefront of heightened expectations for privacy and transparency. In Cisco’s 2022 Consumer Privacy Survey, 81% of respondents agreed that the way that organizations treat customers’ personal data indicates how they view and respect consumer privacy.

As digital technologies and the Internet of Things (IoT) evolve, consumers are increasingly aware of the ways their personal data is being used and growing less comfortable with their data being monetized without their active participation. Consumers get that there is no free lunch, but this is not the same as assuming you own the rights to their identity data and preferences because you told them so in your fine print (that they likely didn’t read).

A walled garden by any other name: Apple Hide My Email

Apple’s “Hide My Email” feature is a great demonstration of the complicated relationship between advertisers, publishers and consumers. According to Apple, this feature allows users to “create unique, random email addresses to use with apps, websites and more, so your personal email can stay private” (meaning only shared with Apple).

Ultimately, the user is establishing an even deeper relationship with Apple and not with the brand they intend to engage with. A win for Apple (well played) and, initially, what may seem like a win for the consumer. However, the consumer is now unknowingly complicit in handing Apple control of the pipes and the data while believing the real value proposition here is protecting their inbox.

The implications for marketers are obvious. Sending segmented, relevant emails based on a user’s behavior is no longer an option with fake email addresses. Moreso, it blocks the ability to build a coherent profile on the user. This makes it difficult to take advantage of new leads and foster relationships with potential customers.

While consumers might believe a feature like “Hide My Email” is Apple taking the initiative to protect user privacy, it’s important to take a step back and think about who’s really benefiting from this idea. To be clear, it’s not that this feature is a con; it’s that this feature favors Apple more than the consumer and actually causes harm to the firm(s) the consumer wishes to engage with.

Trimming the hedges to save the gardens

While gatekeepers like Google, Apple and Facebook have convinced us to become accustomed to centralized and closed ecosystems, it’s not unreasonable to envision a future where this isn’t the case. The likes of CompuServe, AOL, MySpace and Friendster, for example, had first or second-mover advantages, massive adoption and successfully established sizeable closed systems. But where are they today? When someone tells you their email address is xxx@aol.com, what’s your first reaction?

Today’s incumbents should study their short-term history books (or Wikipedia), and perhaps instead of doubling down on bigger walls, look to partner-to-win for the next generation of technology and meet the expectations of today’s multi-generational user base.

Rather than tolerate the status quo, we can start by metaphorically trimming the hedges and empowering consumers (yes, that’s us) to vote with our personal data — and our wallets.

The following are some strategies strategic gardeners should consider to plan for seasonal trimming.

A better connector: Universal IDs

Universal ID solutions create a single identifier assigned to users that allows information to be passed onto approved partners within the advertising ecosystem. Countless pieces of data like lifestyle preferences, interests and even propensities to make a purchase come together to create a picture that defines a true, holistic consumer identity. Utilizing this information allows advertisers to deploy relevant ads to individual users while giving those users increased control and privacy.

This is a newer and still emerging sector with several disparate solutions. We’re in the early days both in determining which Universal ID solutions will gain wide and shared adoption for interoperability, as well as how the various walled gardens will or won’t play ball with their own rules.

Consumers in control

Taking this a step further, what if we lived in a world where consumers had more of a say in the type of marketing they see? What if users could actively opt in to personalized advertising preferences?

Imagine when entering a browser like Chrome or Safari, you’re prompted to accept or decline a disclosure about how your data is being used while actively telling marketers the type of advertisements you want to see, or even better, the types of products or services you’re currently in-market for.

We’re already seeing similar concepts demonstrated by organizations like Global Privacy Control (GPC), which is designed to allow internet users to notify businesses of their privacy preferences, such as whether or not they want their personal information to be sold or shared.

Bottom line

The first step towards this progressive future of the open internet starts with having difficult yet critical conversations surrounding the exchange of data, transparent consent and consumer controls. The most logical brands to start that conversation would be key players like Facebook, Google or Apple, but don’t hold your breath waiting for them.

These firms are actively fighting wars on many fronts with U.S. and foreign regulators, a decline in consumer loyalty, and an increase in class-action lawsuits. Meanwhile, publisher and advertiser revenue retention and value exchange are suffering due to unnecessary added costs, decreased transparency and ultimately confused and frustrated consumers.

Is it crazy to think just one of these firms could flip the script on the age-old walled garden narrative and actually outmaneuver the competition by repositioning themselves as the new gold standard for respecting consumers, our rights to our data, and doing better by their partners and clients, the publishers, and advertisers?

At the risk of dating myself and beating this analogy to death, I still remember when it was cool to have an @aol.com email handle. Maybe an all-new America Online 3.0 is the unwalled garden we seek to save us from this downward spiral.

Rob Rokoff is SVP of corporate development at Verisk Marketing Solutions.

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