Yesterday Katana hosted a joint webinar with Chuck Moxley, the Chief Marketing Officer of mobile ad-technology firm, 4INFO. Chuck discussed the challenges, functions and strategies around internet walled gardens in our 30-minute November webinar: “Beyond the Walled Garden.”
Walled garden is a term that refers to a major media publisher that controls the user’s access to web content and services, making it difficult to use data outside their walled environment with the goal of generating increased profits through limiting vendor collaboration. By virtue of their size and ubiquity, select walled gardens have become many advertiser’s one-stop-shop for advertising data, media buying and consumer data.
Walled gardens, such as Facebook or Google, require a user to supply demographical information upon signing up. Walled gardens know that they have aggregated data and information on a large number of people, so they don’t make that data available in the ad ecosystem in fear of devaluing what they have. In contrast, a publisher that provides their inventory to an independent exchange DOES pass along their own first party data.
In terms of digital advertising, Facebook and Google are the vanguard powerhouses that command 85% of every new dollar spent on digital media.
Publishers have been self-reporting metrics based on what is performing best in their environments with little to no independent data reinforcement. The growth of walled gardens has resulted in limited impression-level sets, lack of transparency and restricted understanding of customer behaviors across channels.
With digital ad spend expected to surpass spending on TV, these big players are unavoidable in the market, and smart marketers will need to adapt and make strategic choices to maximize ad spend. Find out how to strategically approach walled gardens and how to tactfully differentiate and choose between similar platforms in our SlideShare below, or contact Caitlin Byrne for the full audio and visual.
- In order to circumvent the challenges of walled gardens, adopt a strategic approach to take control of your digital media buying.
- Demand independent campaign measurement to get the full scale of reporting.
- As you evaluate which platform to use, look at how a platform links people to devices and then data.
Andreas Roell: Good afternoon everybody. Welcome to another addition of the Katana Webinars series. Today is a exciting addition. It is one of those joined webinars again and we are proud and excited to have Chuck Moxley as CMO of 4INFO with us today who will be presenting a very interesting topic for us around what’s considered ‘the walled garden of data’. With the arrival of certain types of super powers on the internet, I think this particular topic will tweak a lot of interest from all of the attendees, don’t you think? Just FYI before we get started, we are based on timing, what we’re doing today instead of doing live questions and answers, please submit as regular your questions. Then we’ll address those after the fact. With that, I’ll pass it over to Chuck. Welcome Chuck. Thanks for being part of this and have fun.
Chuck Moxley: Thanks Andreas, and thanks to everyone for joining us today for this discussion. Now you’ve no doubt read the headlines and stories of late. Walled gardens are in the news now more than ever. They’re talked, really in every industry event I go to. Which is why we’re here to tackle that subject had-on. Now the intent here isn’t to point fingers or to lay blame. Walled gardens have their place and function. Broad reach and compelling results for some advertisers especially in the social and search space.
There are downsides to using walled gardens too, and we’ll talk about those in a moment. Now for those of you not familiar with 4INFO, let me give you a 30 second intro. We’ve built a mobile-first ad tech platform that uses a unique patented and deterministic method of linking mobile devices to people. By using home address as our match key instead of email address or cookies, we can then hide you offline, in in-store purchase and other data to precisely target mobile ads to 95% of all mobile app users across all of their screens including smart phones, tablets, desktops, laptops, and adjustable TV.
What is a walled garden? Now on the screen is a good definition for you but I’ll break it down in a more personal way. Everyone remembers when they set up their Facebook or Twitter accounts. You supply an email address with your name. Then you add in some demographic information about yourself, maybe your age, your gender, maybe even your birthdate. We all know that not all of this information is accurate, but that’s the information that’s now used to identify you across devices and that advertising that targets you. These walled gardens know that they have this demographic and other information on a large number of people so they don’t make this data available in the ad ecosystem because it appears it would actual devalue what they have. In contrast a publisher that provides inventory to the independent exchange, make a game app or shows to like does pass along their own first party data.
Now when we think in terms of digital advertising, Facebook and Google are clearly the powerhouse in commanding 85% of every new dollar spent on social media. Big brands, of course equate to big scale in the digital advertising space. Most times, casting a monster size shadow on the rest of the market. You’re over here, Google and Facebook have grown to nearly 80% with Facebook earning the lion’s share of that growth. Meanwhile, others in the digital space have been growing. Double digits are nothing on par with these larger competitors.
Now in this kind of growth and half the bubble ad spent in US going to Google and Facebook, it leaves marketers struggling to find a balance. They need to scale personal advertising to achieve the large campaign returns that they’re expecting. That’s fairly easy to do with working with just these two players alone but they also want more control of their data across additional marketing channels. Therein lies the road with walled gardens. The common complaint that we hear from agencies is that Facebook and Google self-report their own metrics, with little independent review. They don’t have a willingness to share that data back with advertisers. That in turn went on to your impression level data collection, it limits your transparency, it inhibits marketers from understanding what’s going on with their customers across the various channels, what their advertising.
With additional ad spend expected surpass spending on TV, the reality of these big players are unavoidable in the marketing. Smart marketers need to make strategic choices to maximize their ad spend. Now what we want to do over the next few minutes is take you in of sight into a little of the walled gardens, and ultimately give you a blueprint for a broader, more strategic approach for additional media buying. We’re not suggesting that you don’t buy Facebook or Google, most likely you’re already buying them and you’ll continue to do so. What we’ll do is we’ll lay out a strategy that we recommend for every marketer, regardless of the platforms you ultimately choose to work with. That will enable you to take control of your media buying, your data, your results, and ultimately your destiny in an otherwise confusing and cluttered market space.
Let’s start by looking at the details of some of the challenges that walled gardens present for marketers. Consider these challenges, none of which are really unique to walled gardens. These are challenges that you face across the board in the digital advertising space. They [aren’t 00:05:53] felt more acutely when you’re working with one of the walled gardens. You’ll probably recognize some of these from your own personal experience. First, you hand over your valuable customer data to a platform. Then you wonder. What exactly did they do with it? How they lost sight of it. Maybe it’s lost for keeps, dropped into the abyss through some secret walled garden trapdoor.
Second, consider the hassles of managing your ad campaign across multiple platforms. None of which of course are closed. Now, think about the measurement of your campaign by a walled garden player. Is it objective? Is it accurate? Do they control the results you ultimately see? Could you share it with your CEO, credibly and with a straight face? Fourth, reporting of these results from these is isolated, and the KPI’s are inconsistent, or you end up with a complete hodgepodge of these indiscernible data points that you have to interpret. Then fifth, consider this growing fear among brands of agencies in the digital advertising ecosystem is turning into a duopoly of two potent players with big brand names.
Both have the capacity to squeeze competition, and uneven the playing field for exchanges. Even set prices for inventory wherever they want. These are some of the challenges that we’re gonna explore in the next few minutes. Let’s dive in by tackling challenge one, in a little more detail. Your platform provider loses sight of your prized possession, your customer data, once you give it to them. Wait. How is that possible? You gave it to them neatly and discreetly. How could they possibly lose sight of it?
Let’s say you handed over your CRM data to a walled garden. What could possibly go wrong? Let’s start with five reasons for concern. You customer data first of all, represents your company’s crown jewels. You take handing it over to another company very seriously. Consider that your walled garden may have marketing goals that are out of sync with yours. Maybe their plans for the use of the CRM data tilted a little more towards their best interests, and not yours. Maybe their practices and protocols while you watch and seeing what data that went into your campaign. Then ultimately what comes out.
By handing over your data, you may accidentally pierce a wall of secrecy of sorts. Giving access of private customer data to your agency because they’re in the middle of a transaction. Remember, walled gardens do work with you, but they’re also going to work with your competitors. Your customer data could slip into the hands of chief rivals, without you even knowing. Running a campaign over multiple platforms takes a lot of effort, and requires you to pretty much run ragged, keeping track of data. Inputs and outputs, the different measurement formats, and wonky results that you may get from one platform may be a complete 180 from another.
Basically, your customer data changes every day. Fluid data requires constant uptake. Can you make those with your platform provider? Without round after round of hassles and confusion regarding who’s who on your CRM file. That’s challenge number one. Challenge number two. If you’re running campaigns across a lot of different platforms, you’re also going to encounter a lot of hassles managing those platforms across the platforms. Let’s talk about a few of those. First, is user identification. Let me explain it this way. Let’s say you spend a lot of time and resources developing a fantastic CRM database. Now you want to use it for targeting. Your database could be based on name, address, email address, or any combination thereof.
Then the publisher where you want to onboard your data, likely has an email address. You know, when you login to Facebook, they don’t really know your home address. What are the chances? Of the email address you gave as a customer, or that your customer gave is the same one they use on Facebook. There are third parties that work to connect those, but the challenge is the average person has six different email addresses. Trying to map those email addresses into a single household enables that matching as anything but 100% perfect. There’s a lot of falloffs for that. Second is the issue of frequency tallying. There’s actually an arch to the number of times that a prospect needs to see an ad during your campaign before they decide to make a purchase.
It’s been repeatedly shown in published literature that the top 5 to 10% of your audience chews up 80% of the ad impressions, and that leads to a lot of waste. Nobody who sees an ad, five times for example, is more likely to buy than someone who sees it twice. There’s also this point of over saturation. Seeing an ad too many times actually turns off consumers, and it reduces their likelihood to buy. You’ve seen that happen in the data. This is the average. You have to binge watch during your favorite shows, and often do you see that same ad, over and over. The goal is to find that sweet spot of frequency. The frequency cap. Capping matters if you want to drive in-store sales. Because you don’t want to overkill your audience with an ad to turn them off.
At the same time, you don’t want to under frequent and miss triggering a sale. Even if you’re working with platforms to understand how to optimize this frequency ad campaign. The problem is you’ve got multiple platforms all reaching the same customer, and there’s no way to manage that frequency cap across the various platforms. Then the third issue is that the issue of data being walled off from multiple platforms running a single campaign. It kind of messes with the assumption of a buyer’s journey. As with frequency capping, campaign pacing is a big driver on in-store sales. With pacing, it’s all about timing. You don’t want to deliver all of the impressions in the first week of like, an 8 week or 11 week campaign. Ideally, you want to pace those impressions across the full length of the campaign. That’s because some products, actually most products, simply aren’t bought every week.
With multiple platforms controlling their own pacing, though, you can consumers overexposed at some points, and underexposed at other purchase points. Finally, don’t forget the potential collision course that comes with inadvertent cross-bidding. With multiple platforms targeting that same person, they could unknowingly bid against each other. Driving down your buying efficiencies, at a cost for you. You’ll essentially be bidding against yourself, paying a higher cost for a new impression than you otherwise would.
Challenge three. Each publishing work is likely on their own reporting, and third party measuring partners. Typically, they’re set up to measure only the media on their system. Very difficult then, to aggregate all that data across publishers, because they don’t release raw performance data. Platform A might give you a campaign report using some stats on clicks. Platform B might give you a campaign success based on the store visits. Platform C uses actual sales leverage. Platform D does a brand awareness study. Platform E, it’s not clear from their report how they campaign there.
You’re left to compare all these different measurement reports. You get this sort of salad bowl, where there’s no way to consolidate the results and get a broad view of campaign success. The nearly universal complaint we hear from planners and buyers is the base look is not being enough to share that data. Leaving informational imbalance that, that combined with Facebook’s digital market share gives it this asymmetrical negotiating power. It’s especially frustrating if you’re using your own customer data for targeting. You hand over a set of your customers to a platform. Some of them are going to be reached, some of them are going to view the ads, some of them are gonna click through. Others may interact in some way with a rich media ad. You won’t know which customer did what.
You’ll likely get a report at the end that just summarizes the campaign results. You’ll lose those individual interactions on a customer level, that can help inform future campaigns. That’s valuable data that simply never gets connected back to your customer data. Finally, the fourth challenge is a reality check for us marketers. It seems like everyone uses Facebook and Google. The reality is there are people who don’t. There are many people who are only occasional users. Plus there are more than two walled gardens that workers are buying media from, to date. Yahoo, AOL, New York Times, ESPN. All of those are examples of walled gardens. You might be surprised how limited their reach really is.
For example, Yahoo only represents one out of every three smartphone users in the US. If you’re running a campaign on Yahoo, there’s a decent chance you won’t be able to reach 2/3 of your audience for that campaign. Which is why you need to think of a strategy that enables you, or ensures that you’re reaching as much of your target area as possible. Regardless of which walled garden you’re running on.
Finally, the fifth challenge is to Google and Facebook control more than 50% of their market. Making them in fact a duopoly. As a result, just two companies seizing that much of the market is creating fear and hesitation in a lot of marketers’ minds. “Do I have to use them?” For example. “Will I be left out if I don’t?” “Will my data end up in a walled garden black hole?” “With all that power and presence, will I be forced to comply with the pricing? Whether it’s competitive or not.” The potential to price where they want, and the potential to squeeze out smaller players by virtue of duopoly share size. You know, with all those challenges. Some of them especially true to walled gardens. You might be thinking, or at least thinking that an advertiser should buy from a walled garden. Of course not. But you should consider other options.
Yes, additional media advertising load is so challenging these days. The solution to circumvent this challenge is just for you the advertiser to take more control over your media planning and buying. Other than be controlled by the platforms you work with, and the meeting that your agency buys. You need to take a strategic approach to define how you want to utilize walled gardens, as well as other platforms. We’re gonna lay out four strategies you can use for taking control.
The first is to take control of your data strategy. When you take control of your data strategy, you own the data and manage how it gets. Who gets it, how it’s used, how it’s measured. In essence, you’re in charge so you get more out of your data. Demand that partners and platforms respect it. Don’t just turn it over to some walled garden who’s offering nothing usable in return. There’s many kinds of data that you want to own. That includes your prospects, that includes your customers, and include that message delivery. How do you reach those people?
I recommend that you work with a DMP partner, or you can build your own DMP internally to manage this data. Begin to set rules for how it will be used. This way you can also control data management tasks, like on boarding, and connecting to platforms you choose to work with. The second strategy is the use of an independent platform. Most likely you’re still gonna partner with walled gardens of digital marketing projects in the future. Don’t rely on them as your only go-to play. Partner with at least one additional independent platform. The key word here is “partner”.
When you partner with somebody who’s independent, you’re more likely to get what you can’t from walled gardens. For example, you’ll get customer data back after a campaign that informs your data strategy. Independent platforms can also customize campaigns. They can bring in third party measurement partners to assess your campaign results. Ultimately, adding independent platforms will give you increased flexibility and willingness to try things that walled gardens will not. Now, that third strategy is to demand independent campaign measurement. Thousands of companies today measure campaigns by performance independent of your interest. Based on strict criteria.
If your campaign tanks, they’re gonna know it. If it runs with consumers, you’ll also know it. Either way, they provide an accurate reading on their results. The fundamental problem is when platforms do their own measurement, you have the fox guarding the henhouse. They have a vested interest in the outcome. Independent measurement will lift that bias. It comes with self-measurement, and it helps you link the right campaign data to meaningful campaign results.
Finally, strategy four is to ensure that you’re getting what we call full frontal analytics. Full frontal analytics seeks to understand the entire customer journey in a mobile campaign. Not just rely on a single metric, like clicks. With full frontal analytics, you’re getting more a more complete picture of your campaign success. As well as a stage by stage view. It also gives you a tool to make better marketing decisions down the road. Based on better, and more, data. Finally it helps convince your CEO’s that the ads deliver value and clearly-defined return on investment.
There are benefits of working within the walls, but you also have to understand the risks that come with it. Many of which we’ve already covered in these sessions. It’s also why it’s critical that you create and grow in your own digital media strategies. That includes walled gardens, but it keeps you firmly in control of your brand’s destiny. A key to that is working in that independent platform alongside the walled garden. How do you choose between many of the platforms available? Because frankly we all look like we do pretty much the same thing. At least that’s what we hear.
The key is to look at how they link people to devices, and then to data. This is going to affect accuracy and reach. Making mobile devices to people is critical for linking data, like past purchase data for targeting and measurement. That’s the first step in the evaluation process, and really a crucial one. Accuracy matters. Make sure you’re accurately connecting people to their data and their devices. It’s challenging, and it varies by screen type. It’s more challenging you might think.
Today, also consider that mobile really matters more than ever. Half of consumers’ digital time is now spent in apps in smart devices. You’ll need to understand how mobile devices tie to people, and how to check on mobile activity. They come with different technology, all these mobile devices. They deliver different rates of accuracy and reach. The methods that worked in desktop don’t translate to mobile. You have to figure out how platforms are tying to mobile devices to people, and is it at a scale that’s going to be meaningful. That’s the linchpin for all your devices that you want to connect to.
As you narrow your choices, focus on your platform’s method of tying mobile devices to people. There are two common types. Probabilistic and deterministic. Deterministic delivers high accuracy, but lower scale. Probabilistic gives you greater scale, but lower accuracy. The ideal choice out-lies in that top-right quadrant you see here on the screen. It’s one that borrows the best of both worlds to give the accuracy of deterministic matching, but give the larger scale that probabilistic models enable for broader campaign reach.
Finally, there’s a little known data fact, or a little known fact that data matching that can create huge issues with campaigns. It’s what we call the illusion of scale. The challenge wise is the fact that it again is currently for platforms at an email address that ties an individual to a device. Like when you sign in to the mobile app. However, the data that’s used for targeting and measurement is usually linked to a home address. Think liquid shopper data, parcel data, services, credit records. That means in order to link devices to people, and then to the data, you have to have that home address to match to the data. Unfortunately, that match rate can be super low. Because the average consumer as I mentioned, has 6 different email addresses.
That means an audience of 100 million people may only match to data for 10 to 40 million of those. Then, probabilistic modeling can introduce up to 30% inaccuracy in the ones that do match. Creating major issues for marketers. We talk to marketers all the time, to try to match your first party data to another platform. Where they’re disappointed when they can only match say 15% or 20% of their customers to mobile devices. That really limits them from reaching their target audience, and really what they want to do with their campaigns.
To wrap up, a few key takeaways. First, in order to circumvent the challenges of walled gardens, adopt the strategic approach to take control of your digital media buy. Second, demand that independent campaign measurer reporting, in order to get the full scale of reporting and insight from your campaigns. Finally, as you evaluate which platform you use, look at how a platform links people to devices, and then data. Insist on good accuracy and reach. Ultimately, you want to be data driven. All right. Andreas, I’ll hand it back over to you.
Andreas Roell: Chuck, this was fantastic. Thank you so much. I love you made this whole concept, that can be very confusing for people, quite understandable, and visual as well. Just like we here at Katana always try to push people to adopt advanced strategies, this whole discussion around data is becoming more and more prominent in peoples’ eyes. When they start realizing that, like you said earlier. The value of the data really resides with the brand and with the marketer themselves. Keeping control over that, keeping clear clarity and understanding from an analysis standpoint is so super important.
With that, as I mentioned earlier, we’ve got a few questions that came in. Feel free to feed us a bit more. You can also do this after the fact, once you’ve had a digested version of what Chuck was talking about. We will also do a submission or distribution update of the deck in the information to everybody that attended. We will either together, or Chuck will respond to any questions that arose. Thank you again for making the time during a busy workday. I hope you got some value out this, and some immediate action steps. Feel free to reach out to Chuck directly at 4INFO, or at ourselves at Katana. Thank you very much, and until next time.