Katie Flores, Associate Director of Programmatic Media Investment
According to a report published by AI Digital, 83% of digital ad revenue is projected to be controlled by Walled Gardens by 20271. A walled garden refers to how platforms such as Google, Meta, Apple, and Amazon control their platform insights and information such as ad inventory, user data, and performance metrics, limiting outside access.
The report also states that 90% of consumers spend their online time within these walled garden environments. Wow, 90%! That means only 10% of users spend their online time engaging with media that we can gain insights from and create leverageable audience segments to optimize against. Walled Gardens can pose a risk to the media ecosystem but also have undeniable benefits.
What is a Walled Garden & Why Are They So Attractive?
Walled Gardens have dominated the media industry for years. But why? Well, the attraction of working with Meta or Netflix for example should be obvious. The latter reported that their daily average viewing duration was two hours and in 1H’24, consumers streamed over 94 billion hours of content2. Mass reach is an understatement. And Meta has mass reach locked down. Facebook has over 3 billion users. The rich, complex, and extensive user data stores gathered from those 3 billion users are just one of the many things that sets Meta apart.
With the further deprecation of cookies and tracking capabilities, these Walled Garden’s first-party data stores will become even more sought after by marketers looking to gain deeper insights into their consumers. Their precision targeting capabilities are vast, the platforms are widely recognized and engaged millions of times a day, and buying on a platform such as Meta allows for a complete campaign journey from launch, campaign optimizations, and campaign wrap-up measurement.
Along with the ease of working with a partner throughout the campaign cycle, Walled Gardens can also provide a full view into the consumer journey from discovery to purchase
The Dark Side: Transparency and Black Box Measurement
All of this sounds incredible, but what does it mean for a platform that isn’t a Google or Apple, or Meta? Well, sometimes the grass isn’t always greener inside of these Walled Gardens. Issues such as transparency, data collection and ownership, inflated inventory and fee costs, and trust are just the beginning.
Transparency has always been a hot topic when it comes to the Googles and Metas of our world. These companies have the right to withhold or provide a client with any information or data that they choose. And the transparency issue goes far beyond data but also applies to how the company’s ad tech algorithms work, how ads are served and where, and what audiences are seeing them. This is often referred to as Black Box Measurement and it’s something that the advertising industry is just starting to unpack and examine. How do you challenge and trust a platform that acts as judge, jury, and executioner without third party validation? This is a question that we as media buyers and planners should ask ourselves daily.
The Automation Illusion: When Simplicity Hides Complexity
Since third party measurement partners aren’t allowed to be utilized within these platforms, brands must rely on the honesty of the publisher, that they are providing them with the correct data, and that the data that brands can ingest into the platforms are actually being used for their intended purposes. The lack of transparency seems to be only increasing, under the guise of enhanced performance through automation.
For example, Google’s Performance Max and Meta’s Advantage+ are newer products that significantly reduce advertiser control of where ads are serving and how they are appearing. While these platforms promote simplicity and automation, allowing their algorithms to handle the work as ‘best practice,’ good advertisers must scrutinize these directives, recognizing the platforms’ inherent drive for monetization.
While we can’t directly track and validate these platforms with 3rd parties, we can conduct test & learns and other forms of measurement to make our own informed decisions.
Scrutiny around transparency has come from not only platform users but government officials as well. This pressure has led to some closed ecosystems experimenting with ‘clean rooms’ to provide partners with more insights than ever before. For example, in 1H’24, Amazon launched AWS Clean Rooms ML.
This product allows Amazon partners to use AWS’s proprietary machine learning technology to create audience modeling and predictive insights without Amazon having to disclose any of their raw data. It’s a step in the right direction but is it enough?
History Repeats: From Prime Time TV to Prime Video
I often compare Amazon Prime and Netflix, who just recently announced they will stop reporting paid subscribers come 1Q’25, to how media buyers viewed the Prime-Time daypart ‘back in the day.’ Before we had the granular and specific audience data reporting tools, us media buyers would pay ABC, CBS, and NBC exorbitant costs to air in those three to four hours of content a night solely because Nielsen’s Household reporting panel of 0.01% of the US population told us those shows had the highest ratings on tv.
We trusted this data because of Nielsen’s longtime standing as a consumer reporting titan, similar to how we in the media industry trust the statistical data that Meta and Amazon supply us with. Looking back, we now know that Nielsen’s murky in-home panel system fraudulently reported inaccurate age, sex, and content data resulting in millions of ad dollars lost to inaccurate targeting tactics3. Even when it comes to billion-dollar, household institutions, question, examine, and challenge everything.
Thus far we have covered issues with transparency, concerns over data ownership, and Black Box measurement processes. Which leaves us with one last thing to discuss, and that’s money. The premium content that a Netflix or an Amazon Prime provides to us consumers sure does come at a premium cost.
In addition to award-winning content, their large user bases/scale, time spent in-platform, white-glove service offerings, measurement capabilities, and high-quality ad experiences mean that our bargaining power goes out the door if we want to continue engaging with our clients’ in-platform target audiences.
All in all, Walled Garden pricing can be as inflated as these companies want since media buyers must purchase their content via Direct IO and not on the open market. Demand is high and supply is low. Econ 101!
Regulatory and Industry Pushback: Cracks in the Walls
We are at the whim of these Walled Garden companies, and they know they hold the chips, but some government officials, tech companies, smaller publishers, and media buyers are trying to reclaim some of this power. On a global scale, the EU’s Digital Markets Act of 2023 has put a spotlight on creating fairer and more competitive marketplaces by regulating Walled Garden platforms from abusing their position in the market.
In the United States, the California Consumer Privacy Act allowed California residents the right to share or exclude their data, and US antitrust laws aim to reduce monopolization of certain sectors where it has occurred.
On a smaller scale, publishers, agencies, and ad tech companies are coming together to collaborate on solutions such as clean rooms, contextual and AI predictive targeting methods, building identity alternatives like UID 2.0, and sharing transparent rate/fee cards to challenge the way these closed ecosystems operate.
For example, LiveRamp is continuing to grow its global data community to help solve inadequacies in available measurement and audience insights. While these Walled Gardens are closing in, innovations in data collection and collaboration from every corner of the industry are expanding.
Looking Ahead: Will 2026 Bring More Openness?
As we look at the rest of 2025 and 2026, will we see Walled Gardens continue to grow or will we see open access to their inventory across different platforms and increases in data and measurement transparency?
For example, smaller-scale DSPs plan to start selling Amazon Prime inventory beginning in 2H’25, which will remove the costly commitments and barriers of entry of buying directly with these partners. Hopefully, this trend continues in a forward direction and more and more Walled Garden platforms will follow suit as we move into 2026.
Balance the Power but Don’t Ignore the Value
In conclusion, Walled Garden companies are necessary for the industry and economy, have undeniably advanced targeting capabilities, captivating and alluring content, and billions of users who engage with their platforms for hours on end.
However, the lack of transparency, accountability, data ownership and measurement, and insights into where and when ads run is a problem that simply cannot be ignored. When planning for 2026, keep an eye out for publishers with ad tech partnerships that can provide complete clarity into their data control and usage capabilities, reporting and measurement potential, transparent cost and fee structures, and last but not least, partners you can trust.
