Walled Gardens: Is your advertising budget at risk?
Here’s an industry secret. Marketers are gatekeepers. We are the holders of the data and stats to delight and mystify. We make the tools we use hard to understand if you aren’t a marketer. And we in turn rely on other gatekeepers to get our job done.
To get philosophical, marketing is an infinite regress and there are turtles all the way down. In other words, there is a series of gatekeepers between you and your audience and getting to know exactly what goes on at each level is almost impossible.
To make matters worse, two of the biggest gatekeepers of them all are currently raking in 80% of all UK digital advertising spend. I’m sure you can guess who they are - Google and Facebook.
But why should this matter to you? Well, if you have invested the majority of your digital advertising budget in Facebook and Google, things are about to get rocky.
In marketing jargon, we call the advertising platforms that google and facebook have created walled gardens. A walled garden is a closed ecosystem in which all operations are controlled by the ecosystem owner.
Imagine a world where all cars, roads, fuel, sat nav, vehicle tax, and so on, are owned and managed by Skoda. That would be a walled garden.
How it works on Google
Before the internet, if you wanted to advertise, it was fairly straight forward. A marketer would identify a newspaper or magazine publisher that reflected their audience, then book some advertising space. Sometimes lots of publishers would band together to offer their advertising space to an intermediary. The intermediary would then go out and sell this aggregated advertising space to the marketers. Then a data specialist would run the numbers and monitor how effective the advertising was.
When it comes to digital advertising, walled gardens like Google do all of these functions. Say you are running an advertising campaign, if may look like this:
You place a cookie from google on your website to track users.
Google tracks what a user does on your website and keeps this data.
You tell google that you want to show people who have visited your website an advert.
Google charges you to access the data that they collected from your website.
You create an ad.
Google charges you to serve this advert.
You monitor the ad performance.
Google only gives you aggregated performance data.
At every step of the way, there is a gatekeeper. And in this example, every gatekeeper is Google.
The case for walled gardens
Now, I’m not a fool. It would be reckless for me to ignore the huge amount of power that walled gardens can provide a marketer. They conveniently package up their whole advertising experience into one platform and allow fairly instantaneous access for anyone keen to advertise.
I would never recommend to a client that they ignore Facebook and Google. They are too big to ignore. They are a tap of clicks that you can turn on and off at will.
The case against
As these walled gardens get bigger and bigger, they also become less and less effective. They are hugely competitive places, with thousands of advertisers competing for a split second of a user's attention. With this increased demand, comes increased cost.
We are now in a situation where advertisers are spending more to get less.
And technology is changing all the time. As these walled gardens invest in their tech, they start building their walls higher and higher, becoming less transparent in the process.
Many marketers struggle to get accurate performance data out of Google and Facebook and instead have to rely on the data that Google and Facebook are willing to share. This data is often aggregated and incomplete.
Of course, it only takes one decision by a walled garden and your marketing could be completely decimated.
But hey, what are you going to do - not advertise on Google and Facebook?
If 80% of digital advertising spend is going on Facebook and Google, one might assume that this is where internet users are spending 80% of their time and therefore only spending 20% of their time on other websites. If you think about your own internet usage, you know that this just isn’t true.
According to Alexa, Facebook is only the 14th in the UK, behind sites such as Reddit (3rd), Live.com (8th), and even yahoo (13th). (Yes, google is 1st).
How many of these other sites are you currently advertising on?
Like any investment, the key to success is diversification. Marketing should be no different.
If you build a robust strategy around diversification, if one platform suddenly changes the rules, you won’t be left in ruins.
Yes, part of this should be using walled gardens. But if your entire marketing spend is going on Facebook and Google right now, you need to consider just how much risk you have exposed your business to.