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InContext / An inside look at the business of digital content

Compete or collaborate? Two approaches to dealing with walled gardens

November 20, 2019 | By Sarah Hartland, Marketing Manager – Lineup Systems @LineupSystems

Publishers are rightfully concerned with the fact that huge search and social companies dominate today’s digital advertising market. Typically, they have reacted to this state of play in one of two ways: by either trying to compete with these so-called walled gardens, or by joining forces with them.

But which approach leads to the best results for advertisers? Should publishers give in meekly to the “can’t beat ‘em, join ‘em” mentality that’s been lining the pockets of these companies for well over a decade? Or should they take stock, take a stand, and find profitable ways to compete against them?

We’re in a unique age of digital domination

The advent of digital has brought with it a dilemma for publishers and their advertisers. It is possible to reach a wider audience than ever before. In most cases, that means they need to pay for exposure with the globe’s biggest and most influential big tech firms, Google and Facebook.

However, many publishers are embracing the challenge of taking on these closed publishing ecosystems. They have confidence in their methods, and they want to prove to their customers that their brand is in fact in safer hands when it’s away from the monopolistic claws of the duopoly.

Others, however, believe that the walled gardens created by such companies make it nigh on impossible to compete for reach in the wider market. And some of them look to inter-provider collaboration as a way to guarantee results for their customers (and keep their business afloat).

The case for competition

A growing percentage of today’s publishers are hesitant to collaborate with big tech because they’ve been burned by them in the past. And many they don’t trust platforms to deliver the exposure and brand-safe contexts that their advertisers need.

The topic of trust has come to the fore in recent years. A series of antitrust investigations have been exposing the monopolistic practices of big tech, particularly in the US, where 50 state attorneys recently opened general investigations into Google’s advertising policies.

High fluctuations in traffic from these providers hasn’t improved their reputation for stable, consistent results, nor has the withdrawal of many features from these platforms that were intended to help publishers share, and profit from, their content. Facebook’s Instant Articles, for example, died a rather untimely death after just two years thanks to inconsistent reporting and a lack of opportunity for monetization.

The technical challenges involved with cooperating with these companies are also proving to be barriers to successful collaboration. Many big tech firms, not least Facebook, expect publishers to build their own separate content injection API, a process that is costly, time-consuming and inconvenient.

Data driven

In fact, walled gardens are notoriously cagey with their data as a whole, making it difficult to remove and activate key information from their own systems and thereby rendering it incompatible with other aggregation platforms that might have better (read: more relevant) features for publishing houses.

This has led to many publishers relying heavily on their own primary data as their main insights to the market. Doing so might be restrictive, but the upside is, at least the company in question has complete control over how much of this data is released, and who sees it.  

Experience matters

When considering the case for competition, we also need to look at the way in which the buying public respond to ads from various channels. Research has proven that people are sick of screens covered with paid search ads, but are receptive to advertising in the context of trustworthy content. A report from Nielsen goes so far as to say that local media receives three times higher consumer trust and 2.5 high positive sentiment compared to ads from high market-share platforms, suggesting that ads from magazines, TV and newspapers are less annoying to (and thus more successful with) consumers.  

The case for collaboration

Google and Facebook not only dominate the publishing space, they’re directing it. It could be argued that they are doing a lot of the hard work by blazing the trail. Thus, all collaborators need to do is keep up – and use the features and innovations delivered via their marketplaces to the advantage of their advertisers. A key argument for collaboration is that shared data equals better data. Having access to the insights shared by walled gardens benefits the whole of market. That is, if this data hasn’t been manipulated for these companies’ own gain, of course.

And here we are, back to the elephant in the room. The issue of trust. Those who are still keen to collaborate should be encouraged by the fact that some big tech CEOs, including Facebook’s Mark Zuckerberg, do appear to be addressing publishers’ concerns head on.

Yes, more needs to be done when it comes to levelling the playing field for publishers. (And proposed policies such as the Journalism Competition & Preservation Act are going to go some way to alleviating publishers’ concerns.) But the fact remains that these companies lead the market because they have nailed a model that, for the most part, works. According to a survey from Adform, some 13% of publishers even believe that walled gardens simplify revenue generation and the distribution process. Despite the bad press, there are publishers out there who are happy with what’s on offer and who will keenly collaborate.

Finding the best approach

Both approaches have their own merits. The only way that publishers can decide whether they want to compete or collaborate with Google and Facebook is to consider their long-term goals, then determine how the features on offer from each platform will help them achieve them. They also need to think about where they stand on content sharing and control, data ownership, and the availability and accuracy of their reporting metrics.

And there’s no reason why publishers can’t adopt a dual strategy that allow them to compete and collaborate in equal measure. After all, collaboration doesn’t mean giving in to big tech. It just means keeping their biggest adversaries onside – and using access to big tech’s products and policies to better inform their own strategy.

Can we really compare news publishers with big tech firms?

Regardless of the relationship they have with Google and Facebook, smaller publishers must remember that they offer something different to the tech giants of today. They’re unique from big tech in three important ways:

  1. Advertisers trust them, because they have control over where their ads appear.
  2. They can not only prove campaign ROI, but also deliver recommendations that add value to their offering. It’s an element of personalization that Big Tech struggles to emulate at scale.
  3. Crucially, they the capabilities to deliver omnichannel campaigns in a much more agile way than the bigger firms. This is key in a market that’s increasingly embracing the combined power of digital, print, OOH and events advertising channels. 

There is most definitely an argument for publishers to focus to their own strengths, not big tech’s well-documented weaknesses.

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